Shares to Sell on the ASX.
Share to sell – Graincorp (GNC)
GNC’s FY15 result was in line with the company’s guidance. We suspect that FY16 will be another below-average year for cropping and the winter harvest is likely to be downgraded over coming weeks. With the effects of the El Nino weather phenomenon also likely to weigh – through lower crop yields and less revenue from GNC’s grain handling business – as well as the stock being on the verge of breaking down technically, we feel shorts are an appropriate course of action. We wouldn’t be surprised to see the stock move towards the $6.50 region over the next 6-12 months.
Share to sell – Crown Resorts (CWN)
Since topping our around $16 in February, Crown has really struggled and is presently trading near $11. Macau continues to weigh on the stock, while pressure on VIP remains. The Melco JV has been the primary cause of volatility and caution prevails regarding Macau because of China's macroeconomic environment. Technically, we're seeing everything that we want; the EMAs are in a bearish configuration, momentum is to the downside, the stock is only approaching oversold levels and the recent massive reversal provides our price action signal.
Share to sell – Oz Minerals (OZL)
A recommendation to sell OZL is based primarily on the weakening gold price. Gold price forecasts have been slashed across the board, by between eight and 14%. This has been done to reflect expected US rate rises and lacklustre demand. Technically, OZL is in a downtrend, having sold off from $5.10 in May to presently be trading near support in the $3.70 region. The EMAs are bearish, momentum has turned bearish and the stock is not yet oversold.
Share to sell – WorleyParsons
Back in May WorleyParsons suggested second half FY15 earnings would be flat on the first half. At the March quarter update the company noted revenues were holding up but margins were under pressure. A lack of recent awards and project sanctions leaves the FY16 earnings picture as opaque. The company can generate cash in a downturn, and its strong balance sheet offers acquisition potential, but we do not believe the downgrade cycle is over yet in an uncertain oil & gas industry. In terms of some of the recent M&A deals, question marks remain. Recent acquisitions such as Evans & Peck, Rosenberg and TWP have not brought the necessary earnings to justify the price paid. On the technical front, WOR appears to be breaking down once more after forming a range over the past six months. Momentum is to the downside and the stock is not yet oversold.
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Nov 2014 - Nov 2016
Our short-term focused Trading Report returned 30.03%, outperforming the ASX/200 Accumulation Index by 23.58%*
DISCLAIMER: *Performance is derived from recommendations provided by Australian Stock Report’s Trading Report, opened on or after date of acquisition in Nov 2014 *Return figures are gross returns and do not take into account fees or brokerage costs. *Returns are calculated based on a $50,000 hypothetical portfolio, risking 2% of the overall portfolio balance ($1,000) as a starting point for each trade. *Due to slippage and gapping, losses can sometimes exceed $1,000 on an individual trade. *Opening and closing prices for trades (and therefore the prices used for determining aggregate profit/loss) will be those published on the Australian Stock Report website and will be determined by the price at which they could realistically be executed in the market at the time the recommendation is published. *ASX 200 Accumulation Index Return is calculated based upon the price of the index at the start of the session on the day the first ASX 200 trade was placed, i.e. 24.11.2015
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