Icarus Signal New Entries For Today

This story features ANZ GROUP HOLDINGS LIMITED, and other companies. For more info SHARE ANALYSIS: ANZ

Update on share prices and consensus price targets.

By Rudi Filapek-Vandyck

Major banks in Australia are back on Icarus' radar with ANZ Bank ((ANZ)) trading above consensus target, CommBank ((CBA)) dangerously close to following ANZ Bank's lead and Westpac ((WBC)) trading within 4% reach of its consensus target. Traditionally, this has always indicated the Australian share market is pushing into valuation limits while overall risk appetite is approaching red hot territory.

This time might be different though. Three of the major four banks in Australia will report their interim results over the coming weeks and this means they will soon after pay out half of their annual dividends. This means, all else being equal, there's about 3% in extra leeway that needs to be accounted for.

Correcting for this dividend payout, the true gap between ANZ Bank and the consensus target is thus still more than 2.5% and for Westpac the gap should be interpreted as more than 7% still. CommBank however, already paid out its interim dividend, but it is not unusual for the shares to trade at a premium, so an extra 3-6% on top of the consensus target wouldn't be uncommon in an historical context (seldom sustainably though).

What all this does mean, in my view, is that the Australian share market ex-resources is trying to push boundaries. What is needed is pressure relief, in the form of RBA interest rate cuts and international factors, to allow for earnings estimates to rise and for price targets to increase as FY12 draws to an end and the market's focus will shift towards FY13.

What this also means is that the Australian market needs the underperforming miners and energy stocks to start firing up, other than through major institutions moving their Portfolios to "Neutral" as happened this week, to sustainably revisit higher index levels.

CBA shares join the likes of WorleyParsons ((WOR)), Decmil ((DCG)), Qube Logistics ((QUB)) and Coca-Cola Amatil ((CCL)), plus 40 other companies that are at present trading within 3% of their consensus targets. A further 66, including ANZ Bank and Commonwealth Property Office Fund ((CPA)), Ramsay Healthcare ((RHC)) and Goodman Group ((GMG)) are already trading above target.

All this probably indicates this truly is a stock pickers market and investors better watch valuations against growth projections and dividend support.

All the while the Bottom 50 of the Icarus Signal groups together a colourful selection of metals explorers, biotechs and energy companies, including Alchemia ((ACL)), Ampella Mining ((AMX)), Saracen ((SAR)) and Texon Petroleum ((TXN)). Coal companies are abundantly represented too.

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

Stocks <3% Below Consensus

Stocks Above Consensus

Top 50 Stocks Furthest from Consensus

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

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