Afternoon Report / Market finally sees some selling (AHG, SFR)

By Market Matters 15 May 18

Market finally sees some selling (AHG, SFR)

Market Matters Afternoon Report 15th May 2018

WHAT MATTERED TODAY

Early strength was met by selling as the market pulled back from near 10-year highs today as profit taking and a sizeable dividend from NAB today took some momentum out of the index. Telstra was weak again, anchoring telcos to the bottom of the sector performance again, while oil also pulled back from highs to keep the energy names subdued. Automotive holdings reduced guidance following a weaker than expected first half – more on this later. We also discuss Sandfire after coming out of a trading halt with an exploration update.

Overall, the index fell 37points to 6097, off -0.61% today.

ASX 200 Chart

ASX 200 Chart

 

CATCHING OUR EYE

Broker calls;

·         AusNet (AST AU): Upgraded to Add at Morgans Financial; PT A$1.88

·         Beach Energy (BPT AU): Downgraded to Sell at Morningstar

·         Elders (ELD AU): Downgraded to Sell at Bell Potter; PT A$6.95

·         Macquarie Group (MQG AU): Upgraded to Buy at Bell Potter; PT A$125

Automotive Holdings (AHG) $3.10 / -8.82%; Weak today following a poor outlook statement, the automotive dealer and logistics manager reduced their second half performance significantly due to underperformance in the Western Australian market, compounded by weak trading in the refrigerated logistics arm, HNA. Many in the market were expecting big things from AHG this half following the rebound in commodities, more money to WA = more money to automotive dealers. Clearly this hasn’t funnelled down to the car industry to the same level as recent commodity booms have, reducing AHG’s expectations. One to keep an eye on if weakness continues.

Automotive Holdings (AHG) Chart

Sandfire (SFR) $8.62 / 4.48%;  Sandfire was on fire today after trading resumed following new discoveries within their DeGrussa project. The copper name was trading at a discount to market as expectations of the DeGrussa mine life was set to expire in just 4 years’ time. The new discoveries are set to extend the project and highlight the yet to be explored area within Sandfire’s exploration portfolio. A high risk play in the copper area for interested investors.

Sandfire (SFR) Chart

OUR CALLS

We sold BHP in both portfolio’s today – selling into strength in oil makes sense at these levels, locking in a nice profit, including a healthy fully franked dividend.

BHP Chart

 

Have a great night

Harry & the Market Matters Team

Disclosure

Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.

Disclaimer

All figures contained from sources believed to be accurate.  Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy.  Prices as at 15/05/2018. 4.24PM  

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