Star Entertainment – Growth Outlook

Posted on | by Leon Hinde | Leave a Comment on Star Entertainment – Growth Outlook

Star has entered into a private placement with its JV partners, Chow Tai Fook  and Far East Consortium to raise $490m at $5.35. The alliance agreement has been entered to build an additional 5 JV towers at the Gold Coast and one in Sydney.

The SGR board has revised the dividend pay-out ratio to a minimum of 70% of normalised EPS. The announcement was also accompanied by a trading update – Normalised group revenue for the March 18 quarter was up 19%.

FY19 revenue of $3 billon, EBIT $440m, EPS $0.33 and DPS $0.20 places SGR on a forward dividend yield of 3.7%.

Star

Star and Crown Casino – Back On The Radar

Posted on | by Leon Hinde | Leave a Comment on Star and Crown Casino – Back On The Radar

Star reported normalised NPAT of $120m, up 12% on the same time last year and revenue growth was strong, up 16%.

FY19 revenue is forecast to be $2.9b, EBIT $430m, DPS $0.16, placing the stock on a forward yield of 3%.

Investors should watch for the next Algo Engine buy signal in both Star and Crown as they approach a new higher low formation, which will provide a good entry level.

Star Casino

Crown Casino

 

 

 

 

Star Casino – Algo Buy Signal

Posted on | by Leon Hinde | Leave a Comment on Star Casino – Algo Buy Signal

SGR has delivered a solid start to FY18. Completion of the upgrade project at  Sydney and Gold Coast resorts will be finished in early 2018, helping to drive earnings momentum through 2020.

We forecast FY18 EPS growth of +12%+, underlying EPS $0.29 and DPS $0.16 placing the stock on a forward yield of 3%.

SGR is likely to provide a number of trading opportunities. We see the current rally exhausting within the $5.70 to $6.00 range. We recommend taking profit within this range and waiting for a pullback to $5.50.

Longer-term holders may prefer to sell covered call options at or near $6.00 and hold the stock through to June 2018.

Star Group

 

 

 

Sector Update: Gaming Stocks

Posted on | by Todd | Leave a Comment on Sector Update: Gaming Stocks

Australian Gaming stocks look set to move higher on increased seasonal interest and improved market conditions.

The three names we prefer in the gaming sector are: TAH, SGR and CWN.

Our ALGO engine triggered a buy signal in CWN on September 28th at $11.10. The company has gotten some bad press relating to machine tampering, but has rebounded as the accusations are being dismissed as “political fanfare.”

Our medium-term target on CWN is $12.75.

Shares of TAH have been firming off the $4.00 support area as the long-awaited merger with TTS enters the home stretch.

It’s widely believed that the government would like to consolidate corporate bookmaking and this merger would achieve that goal.

Our medium-term target for TAH is $5.25.

SGR is more of a technical play. After breaking out of a “triple top” pattern at $5.30 yesterday, the share price now has a upside measured target of $6.00.

Crown

TabCorp

Star Entertainment

 

ALGO Update: Stay long CWN

Posted on | by Todd | Leave a Comment on ALGO Update: Stay long CWN

Our ALGO engine triggered a buy signal on CWN at $11.43 on August 11th.

With the current price around $11.77, the trade has been slow to develop but we still prefer the long side.

CWN will go ex-dividend tomorrow and pay shareholders 30 cents, with 60% franking.

Looking across the gaming sector, we see improving conditions for CWN, SGR and Tabcorp. Seasonal growth in tourist numbers will benefit all three of these names.

We see scope to reach upside targets of $12.80 in CWN, $5.10 in TAH and $5.75 in SGR over the medium-term. 

Crown Resorts

Tabcorp

Star Entertainment

Star Casino, Crown & Tabcorp

Posted on | by Leon Hinde | Leave a Comment on Star Casino, Crown & Tabcorp

The Australian-listed Star yesterday informed its investors that Ellerston Capital (25% owned by James Packer) now has a 5.07% stake.

Institutional investor, Perpetual, which is already Star’s biggest  shareholder, also increased their holding when Malaysian casino giant Genting sold down its stake.

Star & Tabcorp have “lower high” formations, where as Crown is displaying a bullish, “higher low” formation.

Chart – SGR
Chart – TAH
Chart – CWN

 

Star Entertainment – (Time to add Call Options)

Posted on | by Leon Hinde | Leave a Comment on Star Entertainment – (Time to add Call Options)

On 30 June 2016, a buy signal was posted on SGR.ASX with an entry price of $5.40. The stock traded as high as $6.20 following a solid earnings result that delivered revenue growth of 6%, EBITDA growth of 14%.

Today we started selling the $6.25 November calls against client holdings for a credit of $0.14, this added premium complements the upcoming dividend of $0.07, (fully franked), on the 31st of August, (ex div date).

If exercised, the return on this trade will be approximately 15% for 5 months exposure.

For clients not yet set in SGR, our algorithm engine will continue tracking for new entry opportunities.

SGR