Australian equities increased by 4% in October

Posted on | by Leon Hinde | Leave a Comment on Australian equities increased by 4% in October

Australian equities increased by 4% in October with IT up 9.3%, Energy 5.8% and Healthcare 5.5%.

We’ve been allocating towards ORG, WPL, RHC & RMD to help capture these returns. There are incremental further gains in resources and energy, we’re cautious on banks and financials and forecast sideways to lower price consolidation.

High PE companies with US dollar earnings should now run into resistance. Examples being JHX, BLD, RMD, and CPU.

 

 

 

AMC 1Q18 Update

Posted on | by Leon Hinde | Leave a Comment on AMC 1Q18 Update

AMC has identified challenging conditions going into 1H18 at its 1Q trading
update and AGM.

Profit headwinds relate largely to Asia and Latin America, along with rising raw material costs.  AMC has guided to flat 1H EBIT, yet maintained FY18 guidance of around 5% EPS growth.

AMC trades on a forward yield of 3.6%, based on FY18 EBITDA of $1.6b.

We see the current sell-off as a buying opportunity and recommend investors cover with a $15.50 call option into June 2017, whilst keeping exposure to the February dividend.

 

 

CSR Reverses Lower After H1 Results

Posted on | by Todd | Leave a Comment on CSR Reverses Lower After H1 Results

CSR lifted their H1 profit by 3.7% as the building products supplier benefited from the firm residential housing market.

However, the market was expecting a better result as CSR shares are down over 5% at $4.48 in early trade.

Our ALGO engine has triggered three sell signals in CSR in the $4.80 to $4.95 range over the last two weeks.

With the internal momentum indicators in “overbought” territory on the daily charts, we now see scope for a move back to the low $4.00 handle.

CSR

 

ALGO Udate: Bendigo Battered After AGM

Posted on | by Todd | Leave a Comment on ALGO Udate: Bendigo Battered After AGM

Shares in BEN dropped close to 5% yesterday after CEO Mike Hirst told investors at the AGM that APRA’s lending limits had dampened growth momentum and made it harder to compete.

He also said that APRA’s caps on interest-only lending had forced the bank to “slam on the brakes” on these types of loans. Further, he expects total balance sheet growth to be relatively flat during 2018.

Our ALGO engine triggered a sell signal on BEN on August 16th at $12.50. This level has never been challenged during the recent correction higher and we now look at the June 23rd low of $10.50 as the next key support level.

It’s worth noting that yesterday’s sharp drop in the share price was on very heavy volume of 4.2 million shares. The average daily volume over the last three months in BEN has been in the 1.4 million share range.

Bendigo

 

Australian Banks in Review

Posted on | by Leon Hinde | Leave a Comment on Australian Banks in Review

Domestic banking system lending growth was 2.9%, with positive growth
seen in housing (2.6%) and corporate (2.8%) but negative growth in cards
(-2.9%) and other personal (-2.2%).

ANZ’s lending growth (2.3%)

NAB’s lending growth (2.7%)

WBC’s lending growth (3.5%)

BEN’s subdued lending growth (0.1%)

We forecast that headwinds to Banks’ margins will re-emerge in 2018.