Icarus Signal New Entries For Today

This story features COCHLEAR LIMITED, and other companies. For more info SHARE ANALYSIS: COH

Daily update on share prices and consensus price targets. Apologies for not publishing this daily update yesterday. An annoying technical glitch was to blame.

By Rudi Filapek-Vandyck

We welcome Cochlear ((COH)) back among the stocks that are trading below consensus price target. It had been a while, but this was something that simply had to happen, eventually. At least subscribers at FNArena cannot say they've never been warned!

Note that Cochlear shares (labelled "the next CSL" by myself) have now lost nearly $9 from their peak above $84 in April. Today's share price of $75.40 also implies that everyone who became a shareholder in 2011 is now sitting on a loss. Earlier this week Deutsche Bank became the latest expert expressing its conviction that more dire times lie ahead for Australia's most successful healthcare equipment exporter. Also note analysts at RBS had suggested a Trading Sell (effectively an invitation to go short on the stock) and this morning they decided to cease that call.

The fact that Cochlear shares are now back below price target is made even the more impressive given the consensus price target itself materially declined this week. In terms of Icarus Signal, this is one of my favourite stocks in the Australian share market. The ideal example of why investors should watch valuations and forecasts. The ideal example why paying attention to consensus price target can prevent severe losses down the track. The ideal example also as to why shares can remain above target longer than anyone can possibly anticipate, but ultimately "value" will prove its worth.

Last but not least, I think it's now opportune to cement my prediction from last year: Cochlear has become "the new CSL".

For those readers who missed my stories about CSL from the past two years, I have expressed on numerous occasions my reservations whether investors were making a wise decision by owning shares in CSL for exactly the same reason as to why I expressed my reservations about owning shares in Cochlear: too expensively priced when judged against likely growth ahead. Note that CSL shares again peaked at $38 earlier this year (at which the multiple really becomes "bubbly") and they've now stabilised around $33, well below target.

Because of the high multiples (even after these corrections) both stocks are lousy dividend yielders.

Investors should note Foster's ((FGL)) offshoot Treasury Wine Estates ((TWE)) is the only stock that joined the group trading near, but still below target after yesterday's sell-off. Take-over speculation anyone?

Similarly impressive is the fact that both Dulux ((DLX)) and Aurora Oil and Gas ((AUT)) surged above target yesterday. In response, Credit Suisse downgraded Aurora to Neutral today, together with a lift in target. Icarus Signal shows Aurora shares have been in strong demand recently. It was only one week ago the shares were still 14.6% off target.

Investors should consider the information and data are provided for research purposes only.

Stocks <3% Below Consensus

Order Symbol Current Price($) Consensus Price($) Difference(%) 1 APA $ 4.26 $ 4.31 1.24% 2 COH $ 75.41 $ 75.61 0.27% 3 GFF $ 1.04 $ 1.05 0.48% 4 ILU $ 15.40 $ 15.69 1.86% 5 MLB $ 1.74 $ 1.78 2.01% 6 TWE $ 3.40 $ 3.50 2.94%

Stocks Above Consensus

Order Symbol Current Price($) Consensus Price($) Difference(%) 1 AUT $ 3.66 $ 3.60 – 1.64% 2 DLX $ 2.94 $ 2.93 – 0.44%

Top 50 Stocks Furthest from Consensus

Order Symbol Current Price($) Consensus Price($) Difference(%) 1 BSL $ 1.39 $ 2.09 50.43% 2 GBG $ 0.93 $ 1.38 48.39%

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Technical limitations

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