Investment advice, trading strategies and share recommendations from Matt Felsman - Shaw Stockbroking Ltd.
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Shaw Stockbroking Limited
Level 15, 60 Castlereagh Street
Sydney NSW 2000
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WEDNESDAY 27/8:

TODAY: Futures pointing to a +8 point open (7:40am)

Earnings from Boral, Charter Hall, Flight Centre, Lend Lease, Sandfire, Senex Energy, Veda Group, Whitehaven Coal, WorleyParsons
 
Australian Bureau of Statistics construction work done June quarter: Change in the total inflation-adjusted value of construction projects completed.
 
The following stocks will trade ex-dividend today: Aurora Dividend Income Trust, BigAir Group, Federation Centres, Henderson Group, Oakton, Primary Health Care, QBE Insurance, Santos, Telstra, Transpacific Industries, Watpac, Woodside.
 
New Listing: 8Common Limited (ASX: 8CO). Sydney- and Singapore-based software developer with established software products that help companies, their employees and professionals control costs, boost productivity and generate leads, like a CRM. Issued to investors at 0.25, listing at 11:00am.

There will be no morning note from the end of this week to early September, I will be working in Perth.

WHATS CATCHING MY EYE BEFORE THE OPEN:

Electro Optic Systems Holdings Limited (ASX:EOS)
Signing a strategic cooperation agreement with Lockheed Martin
 
It is estimated there is a trillion dollar’s worth of satellites orbiting the earth and if you have seen the movie “Gravity” with Sandra Bullock and George Clooney this company’s potential will make sense. EOS has just signed a deal with Lockheed Martin to build what they hope will be the world's best space debris tracking facility in Western Australia, with the aim to prevent space debris hitting satellites and valuable hardware in orbit. Google “Kessler Syndrome” and see what comes up, at any given time there are hundreds of thousands of pieces of debris orbiting at speeds of up to 25,000 kilometres per hour. Lockheed Martin is an aerospace giant the deal will enable EOS to grow, market their technology to satellite owners and enhance their capabilities. The global fixed satellite services industry generated revenues of US$12.2 last year, representing modest growth of 2%.

Street Talk: Calliden Group Limited (ASX:CIX)
Insurance broker Calliden viewed as potential target, Steadfast full year profit announcement today
 

Calliden, which has a market value of $80 million, focuses on the Australian intermediary insurance market, and analysts reckon Steadfast Group could be a strong suitor for the group. Steadfast, which posted a healthy ASX debut last year, has made no pretence about its aggressive growth strategy through acquisitions. Steadfast is due to unveil its maiden full-year profit today opening the door to announce a possible capital raising to fund the deal.

Exposure to European markets:  iShares Europe ETF (IEU)
Bad news is good EUR markets looking forward to money printing

The Eurozone's been shaken by the double shock of a French Government revolt and disappointing figures on the German powerhouse. Again bad news is good for financial markets looking forward to the remedy which means stimulus/money printing. Recently speculation grew that the European Central Bank is preparing a program of large-scale asset purchases to weaken the euro and try to jump-start growth in the struggling euro zone. Those expectations have bolstered European bond and stock markets since Friday, when ECB president Mario Draghi hinted at a policy shift in a speech in Jackson Hole, Wyoming. An exchange-traded fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold. The iShares Europe ETF seeks to track the investment results of an index composed of European equities.

AT A GLANCE:
Overnight U.S. stocks rose, sending the Standard & Poor’s 500 Index to close above 2,000 for the first time (ever), as reports showed an unexpected increase in consumer confidence.
 
Israel and Hamas said they accepted an Egyptian-brokered cease-fire plan to end a seven-week conflict in the Gaza Strip that has killed more than 2,100 Palestinians and about 70 Israelis.
 
Data showed orders for U.S. durable goods jumped 23 percent in July as bookings surged for commercial aircraft. An air show in the U.K. helped drive a 318 percent jump in plane orders, the most since January 2011.
 
Australian shares edged slightly higher on Tuesday, as overnight momentum from US and European rallies offset mixed company results and concerns about soft commodity prices. At the close, the benchmark S&P/ASX 200 Index was up 2.7 points, or 0.05 per cent, at 5637.6. The broader All Ordinaries Index, meanwhile, closed up 1.7 points, or 0.03 per cent, at 5634.5.
 
Consumer confidence has edged back above its long-run average, rising 0.9 per cent to 113.5 in the week ending August 24, according to the ANZ-Roy Morgan weekly survey.
 
Any experienced trader will always tell you, “The market is always right”, meaning – the price for an asset is always right because it represents what a willing buyer and willing seller agree upon. I think there is a good trading opportunity in BlueScope Steel Limited (ASX: BSL) after the market reacted to the companies reporting season announcement. Yesterday we saw Non-Executive Director at BlueScope John Bevan announce on market he picked up $50,000 worth of stock, Credit Suisse has an Outperform rating with a $6.40 price target and Goldman Sachs Global Investment Research released a note yesterday quoting 42% of their global Investment Banking Relationships rate BSL as a BUY. From to current levels to around $6.00 is a smooth 10% return, last trading at 5.40.
 
Pacific Brands Limited (A$0.58, +1.8%) reported with underlying net profit result slightly ahead of consensus forecasts at around $52 million. However after one-off costs of $312 million, PacBrands reported a bottom line loss of $224.5 million!!! They also announced that they would sell Hard Yakka to Wesfarmers Limited (A$44.60, -0.2%) for $180m. Also rumours that Bonds could be on the chopping block too.
 
Ainsworth Game Technology Limited (A$3.33, -9.8%) missed analysts expected net profit of $69million forecasts as full-year net profit after tax rose 18 per cent to $61.6 million, boosted by the fifth consecutive year of double-digit revenue growth.
 
Boart Longyear Limited (A$0.17, -12.8%) has warned of “material uncertainty” to its financial survival, without finalising a planned recapitalisation. Love investor relations jargon.
 
Clive palmer has apologised to the Chinese ambassador for his outburst on Q&A.
 
Amazon bought a web business that produces and hosts footage of people playing video games – I saw a news article with people in Korea packed in a stadium watching two big gamers face off, like a game of footy!
 
Manchester United have agreed a British record transfer fee of £59.7m to sign Real Madrid winger Angel Di Maria.
 
Apple Inc.’s suppliers are preparing to manufacture the company’s largest-ever iPad, with production scheduled to commence by the first quarter of next year, according to people with knowledge of the matter.
 
Good Watch: “How One U.S. Watchmaker Is Building a $95K Rolex Killer” - http://www.bloomberg.com/video/how-rgm-watch-company-is-building-a-95k-rolex-killer-V8uqZn0bTzufb8~vThduow.html
 
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