Australian Reporting Season & 3 Option Ideas

by Raymond Chan 23 August 2012

 
A huge day today with 66 companies reporting yesterday, please call for our research analysis during the Aussie reporting season.
 
With around 30% of S&P/ASX 200 companies having reported full-year results, numbers have been split down the middle, with 51% above consensus and 41% below. For those companies exceeding market expectation, the average beat has been 4.1%. For those that disappointed the market, the average miss has been 6.9%. Despite that, stock price reactions have been generally positive on the day, with 55% of stocks up by 5% on average, and the remaining 45% down by 4%. 
 
In June and early July, it’s the defensive stocks leading the recovery. In August, cyclical stocks have been taking the leads. The average daily volume has improved from just $3 billion to almost $3 – 4 billion over past week.
 
From our Option Trading Desk, here are the three option ideas:
 
Position One:                Sell AMC September $7.50 puts at 23 cents
Current Share Price:        $7.40
Research Target Price:        $8.45
 
Amcor's result was in-line with NPAT $635m, the company offers a defensive earnings stream, double digit earnings growth, a ~5% dividend yield and trades on a PE of 13x.
 
 
Position Two:                Sell SUN September $8.75 puts at 22 cents
Current Share Price:        $8.85
Research Target Price:        $9.52
 
Suncorp reported yesterday with the NPAT of $724m missing consensus due to an increase in the run-off of impaired assets.  They announced a final dividend of 20 cents per share and a special dividend of 15 cents per share - both fully franked.
The company produced top-line growth of 8-10% across all business lines.
 
 
Position Three:        Sell BHP September $32 puts at 61 cents
 
Current Share Price:        $33.15
Research Target Price:        $42.62
 
BHP reported yesterday afternoon - slightly higher than consensus forecasts.
 
This email is made without consideration of any specific client’s investment objectives, financial situation or needs. Those acting upon such information without first consulting one of RBS Morgans investment advisers do so entirely at their own risk. It is recommended that any persons who wish to act upon this report consult with an RBS Morgans investment adviser before doing so. This email does not constitute an offer or invitation to purchase/sell any securities and should not be relied upon in connection with any contract or commitment whatsoever.  
 

Disclaimer

Information/strategies/trading ideas in this blog is provided for general information purposes only and is not intended as an offer to enter into any transaction. Information contained in this blog is not necessarily complete and its accuracy cannot be guaranteed. Information/strategies/trading ideas here have been prepared without consideration of the investment objectives, financial situation or particular needs of any individual investor. Before a client/investor/reader makes an investment decision, a client/investor/reader should, with or without RBS Morgans' or the author’s assistance, consider whether any advice contained in this blog is appropriate in light of their particular investment needs, objectives and financial circumstances. It is unreasonable to rely on any recommendation without first having spoken to your adviser for a personal recommendation. The use of options may not be suitable for all investors. Potential investors are recommended to seek professional advice before embarking on any strategies mentioned in this blog. The information/strategies/trading ideas contained in this blog have been taken from sources believed to be reliable. Neither the author nor RBS Morgans Limited represent that the information is accurate or complete nor should it be relied upon as such. Any opinions expressed reflect the author’s judgment at this date and are subject to change and is not necessarily that of RBS Morgans'. RBS Morgans and/or its affiliated companies may make markets in the securities discussed. Further, RBS Morgans and/or its affiliated companies and/or their employees from time to time may hold shares, options, rights and/or warrants on any issue included in this blog and may, as principal or agent, sell such securities. The Directors of RBS Morgans Limited and Grosvenor Sydney office advise that they and persons associated with them may have an interest in the above securities and that they may earn brokerage, commissions, fees and other benefits and advantages, whether pecuniary or not and whether direct or indirect, in connection with the making of a recommendation or a dealing by a client/investor/reader in these securities, and which may reasonably be expected to be capable of having an influence in the making of any recommendation, and that some or all of our representatives may be remunerated wholly or partly by way of commission. Information in this blog is proprietary to its author and may not be copied as your own or used for any other purpose without the prior written consent of the author. RBS Morgans Limited (ABN 49 010 669 726 AFSL 235410) A Participant of ASX Group Principal Office: Level 29, Riverside Centre, 123 Eagle Street, Brisbane QLD 4000
 

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