Crown – Packer Sell Down

Melco has agreed to purchase 19.99% of Crown Resorts at A$13.00 in two equal tranches on 6 June 2019 and on or prior to 30 September 2019.

The stock is being purchased from the Packer holding.

Melco’s price implies 10x EBITDA for the Perth & Melbourne casinos. It implies about $1.7bn for the Sydney casino which has a net build cost of $1.5bn.

Buy Crown at $12.30

 

 

US Market – Warning Signs

Almost half of the stocks in the major US indices are already in bear territory and we’re now beginning to see the late stage selling in the remaining “high quality” group.

The graphs below of the US indices are under algo engine sell conditions and more recently, (past 10 days), the short-term momentum indicators are now pointing down and supporting the big picture back drop.

Interestingly, the Australian market has held up well, and the explanation lies in the surprise post election rally. Our concern is the sell-off in the ASX may soon catch up to the US.

Dow Jones

S&P500

NASDAQ

 

 

ANZ – Algo Buy Signal

Australia and New Zealand Banking Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We see support at $26 and a push higher towards $28.50, will provide an opportunity to sell covered call options to enhance the income return.

ANZ goes ex-div, $0.80 on the 14th of May. An August $29.50 call option will add a further $0.50 per share of income.

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

OZ Minerals – Add to Watch List

OZ Minerals is under Algo Engine buy conditions and we add this name to our watch list. Early buying support is building just above the $9.00 price level.

OZL goes ex-div $0.08 on the 31st August and the stock trades on a forward yield of 2.7%.