Icarus Signal New Entries For Today

This story features APA GROUP, and other companies. For more info SHARE ANALYSIS: APA

Daily update on share prices and consensus price targets.

By Rudi Filapek-Vandyck

Ah, but the vagaries of being (too) popular..!

It was only a few sessions ago the ever-so-popular Monadelphous ((MND)) shares dared to challenge Icarus once again, only to receive another firm rejection while trading above consensus target. Icarus didn't exactly keep count, but this must mark the fourth such rejection since March this year. Certainly a signal of underlying strength. Not that we didn't already know!

The latest talk surrounding Monadelphous around the Bridge Street traps is that funds managers specialised in small caps stocks have turned into sellers now that Monadelphous has been selected to join the ASX top 100. We can only imagine that the selling pressure will last for a while given that Monadelphous must have become a key stock in small caps portfolios over the years past. It'll be anyone's guess as to when exactly the upward pressure starts to emerge from the buying by large cap funds managers.

A cheaper stock might trigger more buyers' interest and on this account Monadelphous shares are following the standard script. Since peaking above $19.50 in October, the shares have been sliding, and sliding. On Tuesday morning the shares were down another (close to) 2.5% which takes the shares back to $17.79. We have seen lower levels this year, and not just during the hazy days of early August.

Note the Price-Earnings ratio has now fallen below 15 for a company anticipated to grow earnings per share by double digits for years to come, while the implied dividend yield sits at 5.7% and 6.7%  for this financial year and next.

All this suggests investors don't need to hold their fingers crossed for a Santa rally this year, this year's present might have already arrived in the form of a weakening share price for Monadelphous…

A "normalisation" in markets (post August-September sell-off) has pushed up the number of stocks trading close but still below consensus target to 28. This is about triple the numbers we were seeing in August. Stocks that joined the list after yesterday's session include Consolidated Media ((CMJ)), Challenger Infrastructure Fund ((CIF)), Australian Pipeline Trust ((APA)), Tatts Group ((TTS)) and Fleetwood Corp ((FWD)). It's probably a fair statement to make that the inclusion of each of these five is a sign that investors are still seeking safety and yield. Or should that be safety in safe yield?

There are now 30 stocks trading above target and it probably won't surprise anyone that the latest newcomer on this list is Virgin Blue ((VBA))? Also on this list are Mesoblast ((MSB)), following an initiation of coverage by Macquarie last week, Ramsay Healthcare ((RHC)), Webjet ((WEB)) and Reckon ((RKN)).

Even the Bottom 50 is not generating any surprises today with Paladin Energy ((PDN)) and BlueScope Steel ((BSL)) the latest newcomers.

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

Stocks <3% Below Consensus

Order Symbol Current Price($) Consensus Target($) Difference(%) 1 PBD $ 0.05 $ 0.05 0.00% 2 CMJ $ 2.67 $ 2.67 0.07% 3 BPT $ 1.18 $ 1.19 1.19% 4 DWS $ 1.34 $ 1.36 1.49% 5 CIF $ 1.17 $ 1.18 1.55% 6 APA $ 4.35 $ 4.43 1.84% 7 TTS $ 2.32 $ 2.36 1.85% 8 FWD $ 12.36 $ 12.60 1.94%

Stocks Above Consensus

Order Symbol Current Price($) Consensus Target($) Difference(%) 1 VBA $ 0.39 $ 0.38 – 0.26%

Top 50 Stocks Furthest from Consensus

Order Symbol Current Price($) Consensus Target($) Difference(%) 1 PDN $ 1.51 $ 2.46 63.19% 2 BSL $ 0.85 $ 1.36 61.30%

To see the full Icarus Signal, please go to this link

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Click to view our Glossary of Financial Terms