Value-Momentum Watchlist

Key News

Market developments

  • ACX fell to $3.66, into momentum buy range. We’re waiting for price to turn around before jumping in but will be watching this closely.
  • API is right on the edge of our value buy range ($1.62-$1.73). Watching for momentum to start today.

Stocks

ACX.AX: a leading provider of cloud based collaboration software for the construction industry. Profit margins are below expectations while the company is trying to expand outside of ANZ region. Current revenue of 250m in a potential future market size of 7b. Buying for value @ 3.40, buying momentum below 3.70.

API.AX: largest Pharmaceutical wholesaler in Aus/NZ with prominent retail brands such as Priceline. Revenues, earnings and return metrics have been improving while the company focuses on growing its higher-margin retail businesses to compete against Sephora, which make up 30% of total revenue. Buying for value @ 1.73, buying momentum below 1.94.

BIDU: leading internet search engine in China. Revenue growth guided by company to resume from a 1-year halt following increased online advertising regulation. Own a subsidiary (iQiyi) which has sole distribution rights of Netflix in China (3% of current revenue). Partnered with Microsoft to work on autonomous driving project which a potential free option for the stock. Buying @ 130 for value, buying momentum below 220.

DBK.DE: German investment bank. Returned to profitability however CEO Cryan has recently guided future revenues lower. Buying for value at potential arbitrage boundary of €15 per share based on 25% of tangible book value (€6.75) + intrinsic value of cash flows (€5.20) + litigation premium (€3).

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