Icarus Signal New Entries For Today

This story features WESTPAC BANKING CORPORATION, and other companies. For more info SHARE ANALYSIS: WBC

Daily update on share prices and consensus price targets.

By Rudi Filapek-Vandyck

May I have your attention, please? Something's happened which we haven't been able to witness in a long time now… shares in Commonwealth Bank ((CBA)) of Australia are approaching the consensus price target. Actually, this did happen already a few weeks ago, as shown on the chart below, and equities went back into a dive after that. So this is actually the second time it happens inside one month.

To complete the picture: Westpac ((WBC)) also brushed with the consensus price target as at the end of October, but National ((NAB)) and ANZ Bank ((ANZ)) still had a gap to close at the time. Now that dividends have been paid out (all except CBA), and share prices retreated on Italy-itis, most gaps between share prices and targets are somewhere in between 9-11%, so there's plenty of room to appreciate still.

For those readers who are as yet not familiar with my personal "Market Indicator That Never Fails", when banks' share prices move past consensus price targets this is a firm signal investor risk appetite has once again surged to elevated levels. My personal risk appetite indicator has helped me identifying all sell-offs in Aussie equities in the years past before they took place, so it's probably a good habit to pay attention to these observations.

So how should we interpret CBA's re-emergence on Icarus' radar? I think it is yet another sign that risk appetite is in an uptrend. Given three of the Big Four banks still have plenty of room to move, this would suggest risk appetite and share prices in general have a lot of space to appreciate still, before valuations and overall exuberance are getting "dangerous" again.

In the meantime, the October-November rally is pushing new names onto Icarus' radar every day now, without taking many away at the same time. The number of stocks trading within the vicinity of consensus target has now grown to 26, with newcomers (apart from CBA) including Coca-Cola Amatil ((CCL)), Cochlear ((COH)), REA Group ((REA)) and Myer ((MYR)).

There are now 34 stocks trading above target, including newcomers Wesfarmers ((WES)), QR National ((QRN)) and Platinum Asset Management ((PTM)). Meanwhile, Fortescue Metals ((FMG)), OneSteel ((OST)) and Tap Oil ((TAP)) all joined the Bottom 50.

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 MYR $ 2.55 $ 2.56 0.51% 3 COH $ 54.49 $ 54.84 0.64% 4 TSO $ 0.51 $ 0.52 0.98% 5 CCL $ 12.24 $ 12.46 1.79% 6 CQR $ 3.26 $ 3.32 1.87% 7 MSB $ 7.91 $ 8.08 2.09% 8 REA $ 12.85 $ 13.14 2.23% 9 VBA $ 0.39 $ 0.40 2.31% 10 CBA $ 49.61 $ 50.87 2.55% 11 SDG $ 0.90 $ 0.92 2.79%

Stocks Above Consensus

Order Symbol Current Price($) Consensus Target($) Difference(%) 1 WES $ 32.95 $ 32.94 – 0.03% 2 CTX $ 13.28 $ 13.26 – 0.13% 3 APA $ 4.45 $ 4.44 – 0.16% 4 QRN $ 3.43 $ 3.42 – 0.32% 5 PTM $ 3.87 $ 3.81 – 1.55% 6 MTS $ 4.28 $ 4.21 – 1.73%

Top 50 Stocks Furthest from Consensus

Order Symbol Current Price($) Consensus Target($) Difference(%) 1 OST $ 1.01 $ 1.62 61.09% 2 FMG $ 4.81 $ 7.70 60.00% 3 TAP $ 0.69 $ 1.09 59.56%

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