Saracen Minerals – Buy on Dip

Saracen Minerals has agreed to buy a 32% stake in the Super Pit gold mine in Kalgoorlie and is raising $796 million to fund the acquisition. New shares were being offered at $2.95 each.

The raising was split into a $369 million placement and $427 million rights issue.

Computershare – Algo Sell Signal 

Computershare is under Algo Engine sell conditions and has been forming a series of lower high patterns since topping at $20.50 in September last year.

We continue to view the market’s assessment of the future earnings growth picture, as misguided. The factors that have lead to the recovery in earnings are transitory and the 20X PE and 2.5% yield, makes CPU too rich for our liking.

Short CPU $17.00

Scentre Group – Algo Update

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

SCG is likely to generate low levels of earnings growth, however, the weak backdrop for global bond yields and the share buyback program that Scentre Group is running, are catalysts to support our “buy” rating.

 

BHP – Buy

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

BHP outlined earlier this week its outlook for the Petroleum business, which includes an increase in capital spending and plans to double production by 2025.

FY21 revenue remains flat, EBIT the same as FY20 at $19bn, which supports DPS of $1.55 per share placing the stock on a forward yield of 5%.

The market is negative on the outlook for Iron Ore prices, with extra supply hitting the market in 2021, however, if spot prices stay where they are analysts will have to upgrade the earnings outlook. 10 to 20% upgrade in earnings will support BHP trading back over $40 per share.