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18 Share Tips - 4 June 2012

18 Share Tips - 4 June 2012

18 Share Tips to BUY, SELL & HOLD from Australia's leading brokers

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By Anthony Black 04.06.2012

Hamza Habib, Patersons Securities

BUY RECOMMENDATIONS

Lynas Corporation (LYC)

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Chart: Share price over the year to versus ASX200 (XJO)

This company is fully funded for up to 22,000 tonnes of rare earths oxide a year, and most of phase 1 supply is already contracted. The temporary operating licence has been approved, but not yet issued. LYC expects a favourable decision to be announced shortly, which, in our view, should be the catalyst for a major re-rating to the upside. Amid a positive macro view for rare earths, LYC is one to watch during the next few months. 

Metminco (MNC)

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Chart: Share price over the year to versus ASX200 (XJO)

Offers an advanced portfolio of exploration projects in Chile and Peru. It mostly focuses on copper, with exposure to gold, molybdenum and zinc. The company owns 100 per cent of its projects and is well funded. It has an extremely large resource, with the potential to grow further. An open register could attract interest from large miners and corporates. The stock was priced at 13 cents on May 31.

HOLD RECOMMENDATIONS

Toll Holdings (TOL)

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Chart: Share price over the year to versus ASX200 (XJO)

This transport logistic company’s solid performance in the 2012 first half is offset by a downgrade in full year EBIT (earnings before interest and tax) guidance to between $400 million and $420 million. Toll’s global express business may be suffering in response to changes in retail purchasing behavior. Earnings volatility may continue given market conditions.   

Boral (BLD)

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Chart: Share price over the year to versus ASX200 (XJO)

The board recently decided to replace chief executive Mark Selway, who, in our view, implemented effective strategies for this building products company. Ross Batstone is acting chief, and investors should monitor his performance. As with most companies, abrupt changes can generate issues.

SELL RECOMMENDATIONS

Aristocrat Leisure (ALL)

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Chart: Share price over the year to versus ASX200 (XJO)

Makes and distributes gaming machines and systems in Australia and overseas. The company is looking for further growth in the North American market. But successfully implementing and executing strategies will be a challenge following the recent resignation of Nick Khin, president of its American division.

GrainCorp (GNC)

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Chart: Share price over the year to versus ASX200 (XJO)

The grain handler has outperformed the S&P/ASX 200 substantially in the past year, which has been reflected in its share price. But risks associated with foreign exchange rates remain amid potentially lower grain and commodity prices in 2012/13. Investors should consider locking in profits at current levels.

 

Michael Heffernan, Lonsec

BUY RECOMMENDATIONS

Coca-Cola Amatil (CCL)

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Chart: Share price over the year to versus ASX200 (XJO)

A recent trading update was quietly impressive in a difficult economic environment. Coca-Cola Amatil is now one of the few remaining beverage stocks on the ASX. Selling its beer interests (a 50 per cent share in the Pacific Beverages joint venture) to SAB Miller boosted the company’s cash position by about $170 million after costs. The company retains beer interests in Papua New Guinea and Fiji. Future growth prospects look bright.

Telstra Corporation (TLS)

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Chart: Share price over the year to versus ASX200 (XJO)

The telecommunications giant has been a standout performer in the past 12 months. With $11 billion flowing to it from the NBN, its growth position during the next few years seems secure, irrespective of whether Labor or the coalition are in government. Its fully franked dividend yield of about 7.5 per cent is particularly attractive.

HOLD RECOMMENDATIONS

CSL (CSL)

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Chart: Share price over the year to versus ASX200 (XJO)

This blood plasma and pharmaceutical company is benefiting from robust business fundamentals and a stronger US dollar. Its profit upgrade in February was reassuring in this uncertain market environment. Also its royalty revenue streams provide comfort for investors seeking reliable cash flow.

Cochlear (COH)

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Chart: Share price over the year to versus ASX200 (XJO)

This bionic ear implant maker appears to have overcome the setback following the recall of one of its key products last year. It also should benefit significantly from recent strength in the US dollar.

SELL RECOMMENDATIONS

Ten Network (TEN)

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Chart: Share price over the year to versus ASX200 (XJO)

This media company has undergone substantial organisational and management changes. It had to after first half net profit dived by 70 per cent to $14.8 million. Sell and wait for a recovery in underlying profitability.

Seven West Media (SWM)

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Chart: Share price over the year to versus ASX200 (XJO)

Another media stock impacted by a slowdown in the Australian economy. Generating advertising revenue growth is a challenge for media companies in this competitive market. Lighten holdings now, but be ready to buy at a potentially cheaper price. The prospect of a cut in interest rates of between 0.5 and 1 percentage point should boost confidence and encourage advertisers to spend.

 

Mark Lennox, Halifax Investment Services

BUY RECOMMENDATIONS

Ainsworth Game Technology (AGI)

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Chart: Share price over the year to versus ASX200 (XJO)

This gaming machine company continues to be a top performer. It’s an innovator and the business is growing in Australia and overseas. The company has been well supported post the capital raising and recent market fall. The share price looks likely to continue its upward trend to $2 and beyond. Offers a bright outlook. The shares were trading at $1.86 on May 31.

Perseus Mining (PRU)

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Chart: Share price over the year to versus ASX200 (XJO)

We believe this gold producer was oversold during bullion’s recent decline. The company is ramping up production from almost 38,000 ounces in the 2012 third quarter to guidance of between 50,000 to 55,000 ounces in the June quarter. Offers value in a sector that’s regarded as a safe haven and can move quickly.

HOLD RECOMMENDATIONS

National Australia Bank (NAB)

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Chart: Share price over the year to versus ASX200 (XJO)

The NAB is working through issues with its UK banks. The company’s Tier 1 capital ratio stood at 10.17 per cent for this year’s first half, up from 9.19 per cent on the previous corresponding period. Hold for potentially modest capital growth, but an attractive dividend yield going forward, as franking can provide tax advantages.

Origin Energy (ORG)

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Chart: Share price over the year to versus ASX200 (XJO)

Origin Energy’s production of 31 petajoules equivalent (PJe) in the March quarter was up 8 per cent on the December quarter. Revenue for its exploration and production business was up 3 per cent to $203 million. Expect better numbers going forward.

SELL RECOMMENDATIONS

CSL (CSL)

CHART

Chart: Share price over the year to versus ASX200 (XJO)

CSL reported a net profit after tax of $483 million for the half year to December 31, 2011. NPAT was down $17 million, or 3 per cent, on the previous corresponding period. An unfavourable foreign exchange impact of $95 million was included in the result. CSL is now reasonably priced and investors should consider taking some profits.

Paladin Energy (PDN)

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Chart: Share price over the year to versus ASX200 (XJO)

The uranium miner successfully raised $US274 million from a convertible bond issue to shore up its balance sheet. But the company is in a global sector still trying to recover from the nuclear disaster at Fukushima in Japan. Prefer other investments at this time.

 

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Please note that TheBull.com.au simply publishes broker recommendations on this page. The publication of these recommendations does not in any way constitute a recommendation on the part of TheBull.com.au. You should seek professional advice before making any investment decisions.

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