Tag: ASX:TCL

Transurban switched to Algo Engine buy conditions on 30 October at $13.10. The stock has since rallied to $15.60 and has now retraced back 50% to find support at the current price of $14.30.

Investors should watch the short-term momentum indicators as we’re likely to see a pick up in buying interest, supported by an attractive defensive dividend yield.

This could be a short-term trade for the nimble, or a solid entry-level for long-term buy and hold investors. Investors may also consider adding the covered call option to enhance the yield.

For more detail on the option strategy , please call our office on 1300 614 002.

Transurban is under Algo Engine sell conditions. We see value in the $12.50 to $13.50 price range.

If we assume the dividend is cut from $0.55 to $0.40 in FY21 it implies a 2.8% forward yield. Further normalization is likely from FY22 and we’re therefore happy to buy TCL on the “dip.

Transurban is under Algo Engine sell conditions and we’ve remained cautious on valuation grounds and the likely reduced dividend payout.

TCL’s earnings were below consensus and risks exist on breached covenants in the US, along with ongoing COVID-19 volume impacts.

Target $12.50

Transurban is under Algo Engine buy conditions and is a current holding in our ASX 100 model.

As TCL trades closer to $15 we see a compelling buying opportunity.

Transurban is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We see upside in TCL to $16, at which time investors should consider selling out-of-the-money call options to enhance the income return.

For more information on the derivative strategy, please call our office on 1300 614 002.

2020

Shares of TCL have dropped about 10% over the last month since announcing a $4.8 billion capital raising related to the WestConnex project.

The share price suggested has been $10.80, which is just 10 cents below last Thursday’s intra-day low.

From a broader perspective, we believe the 25.5% ownership of the WestConnex project will underscore TCL’s status as Australia’s dominate toll road operator, support future cash flow and secure their dividend growth.

We don’t currently have an ALGO buy signal for TCL, but would not be surprised to see one soon.

Our medium-term target for TCL is in the $13.00 area.

Transurban

Shares of Transurban have been holding above the $12.00 mark since the ACCC approved the company’s bid on Sydney’s WestConnex tollway. Shares are currently in a trading halt.

The green light from the regulator clears the way for TCL to acquire other domestic assets to build on its future growth in earnings.

TCL currently own 15 of the 19 toll roads in Australia. This gives TCL an advantage over other bidders since many tollways feed into other strategic motorways.

The company plans to do a capital raising for $4.8 billion to fund the acquisition. $4.2 billion of this will be in the form of offering  shares at $10.80.

We don’t have a current ALGO buy signal on TCL and would look for lower levels to enter long.

Transurban Group