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18 Share Tips - 13 August 2011

18 Share Tips - 13 August 2011

By Anthony Black 13.08.2011


John Rawicki, State One Stockbroking

BUY RECOMMENDATIONS

South Boulder Mines (STB)

 CHART

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

Owns the Colluli Potash Project in Eritrea, Africa. Colluli is the world’s shallowest potash deposit, enabling low-cost mining via an open pit design. It offers an impressive potash resource of 548 million tonnes at 19 per cent potassium.  And as the project is conveniently located near the coast, I see plenty of upside here.

Westfield Group (WDC)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

As a leading global retail property group, Westfield holds an interest in 119 shopping centres around the world. Westfield is taking a lucrative opportunity to participate in New York’s World Trade Centre retail development. Strong management and conservative debt make Westfield an attractive proposition.

HOLD RECOMMENDATIONS

Myer Holdings (MYR)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

A victim of feeble consumer sentiment, falling equity and housing markets, higher interest rates and increasing cost-of–living charges, Myer has been heavily oversold. The company is well placed to recover when consumer confidence improves in line with the economy.

Wesfarmers (WES)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

Diverse operations make Australia’s biggest listed conglomerate a relatively safe haven. Coles and Bunnings provide defensive attributes. Expect this stock to recover from recent selling. The Coles turnaround is gaining traction and provides earnings stability, while the Bunnings hardware division is growing strongly. WES is showing all the right signs of an improving business model.

SELL RECOMMENDATIONS

Aquarius Platinum (AQP)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

Rising production costs and sovereign risk attached to doing business in South Africa and Zimbabwe adds to uncertainty. Heightening risk is single commodity production. AQP’s lack of hedging expose revenues to platinum price volatility. Companies mining several commodities are safer plays. 

PanAust (PNA)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

A copper and gold miner operating in South East Asia. Although copper production from its Phu Kham mine in Laos is a reasonable 65,000 tonnes a year, we expect rising cash costs of about a US$1 a pound to squeeze profit margins. Furthermore, this mine is the company’s core asset, exposing it to a volatile copper price.

 

James Georges, Patersons Securities

BUY RECOMMENDATIONS

Commonwealth Bank (CBA)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

The bank continues to deliver. On August 10, it posted yet another record full-year cash profit of $6.84 billion. It was better than expected, as was the final, fully franked dividend of $1.88 a share. The banking sector outlook is uncertain given volatility in global financial markets and cautious consumers potentially affecting lending growth. But CBA has an outstanding track record. Recent turmoil offers a good opportunity to buy this blue chip for long-term growth and income.

Troy Resources (TRY)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

Troy Resources is an unhedged, low cost gold and silver producer focusing on South America. The next key value driver is a likely upgrading of its Casposo mine reserves to facilitate a 10-year life. Additionally, we continue to watch the Sandstone Nickel joint venture with Western Areas, as Troy may sell its stake in a project that has recently shown positive results. TRY also stands to benefit from recent currency fluctuations, with costs incurred in Brazilian real and Argentine pesos.

HOLD RECOMMENDATIONS

Qantas Airways (QAN)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

The national carrier is aggressively reducing costs despite complex fleet and labor relations. Management is capable of handling difficult times. Qantas will remain profitable, but it’s subject to volatile cyclical demand.

Orica (ORI)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

Orica is a leading explosives provider to the global mining industry. More recently, it diversified into underground mining and tunnelling products via its Minova acquisition. ORI is also the largest chemicals supplier in Australia and New Zealand. Competitive advantages include its Australian explosives duopoly, its global explosives distribution network and capital investment discipline. Transparency is good. It’s more suitable for growth portfolios. We have recently upgraded our view on the stock from reduce.

SELL RECOMMENDATIONS

WDS Limited (WDS)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

WDS, an integrated provider of design, engineering and construction services among others, has a solid client base, mostly comprising blue chip resource companies. The mining division is performing well, driven by underground coal operations. But due to a series of earnings downgrades in full-year 2010, apparent operational issues and the departure of its managing director, we consider the stock speculative and only suitable for high-risk investors.

Aquarius Platinum (AQP)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

AQP’s four mines are located in South Africa and Zimbabwe.  We deem these countries to have high sovereign risk. A lack of hedging exposes earnings to commodity price fluctuations. Long mine lives are attractive. But single commodity exposure makes the shares only suitable for risk tolerant investors.

 

Michael Heffernan, Austock

BUY RECOMMENDATIONS

Service Stream (SSM)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

A contractor to the telecommunications and utility sectors. It stands to benefit from a continuing rollout of the National Broadband Network. NBN Co Limited is expected to announce the outcomes for its tender rollout process next month. Service Stream, together with its joint venture partner Lend Lease, are one of three tenderers. 

Monadelphous Group (MND)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

A mining services company with a stellar sharemarket history, but its share price, like other quality companies, has been punished to the point of a good buying opportunity. Its attractive fundamentals and the continuing strong resources outlook are positive for its future growth. The company’s 12-month high was $22.40, while it is currently trading at below $18.00.

HOLD RECOMMENDATIONS

Wesfarmers (WES)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

This is a definite hold at this point. I consider it a safe harbour in these turbulent times.  Its diverse businesses – retailing, coal, chemicals and insurance - offer defensive and growth characteristics. Coles’ recent trading report was better than expected. That will assist the company’s profitability and share price.

Telstra (TLS)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

Amid steep sharemarket volatility, Telstra has held up reasonably well.  On August 11, it delivered a net profit of $3.23 billion for the full year to June 30, which marginally beat expectations. It retained its final dividend of 14 cents a share, taking the full year to 28 cents fully franked. Revenue was up 0.7 per cent to $25.09 billion, which is encouraging. The company is winning market share and the future now appears much brighter.

SELL RECOMMENDATIONS

Billabong International (BBG)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

As expected, this leisure and surf wear stock has encountered difficulties due to a strong Australian dollar and subdued consumer spending in the United States, where Billabong generates much of its revenue. Accordingly, an improvement in its profitability depends very much on how quickly the US economy recovers.

Suncorp Group (SUN)

CHART 

Chart: Share price over the year to 12/08/2011 versus ASX200 (XJO) 

A Queensland based bank and insurer, which was buffeted by the state’s floods and cyclone earlier this year. Until the Queensland economy regains its previous strong growth trajectory, other banks are preferred.

>>Back to the newsletter to view other articles - August 13th 2011

 

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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WHAT’S ON THIS WEEK

week 31 October 2014
    • 27
    • ARG Argo Investments annual general meeting | 4:26 AM
    • BEN Bendigo and Adelaide Bank annual general meeting | 4:27 AM
    • SPO Spotless annual general meeting | 4:28 AM
    • RBA Panel participation by Reserve Bank of Australia (RBA) head of financial stability, Luci Ellis at the Australian Housing and Urban Research Institute panel roundtable | 6:07 AM
    • 28
    • AOFM AOFM to issue $200 million of February 21, 2022 indexed Treasury bonds | 4:05 AM
    • SGP Stockland annual general meeting | 4:26 AM
    • Financial Review's Future Forum Financial Review's Future Forum: The Asian Century, featuring Telstra chief financial officer Andrew Penn, Fortescue Metals chief executive Nev Power and former Australian Ambassador to China Geoff Raby | 4:27 AM
    • WPL WorleyParsons annual general meeting | 4:27 AM
    • WHC Whitehaven Coal annual general meeting | 4:28 AM
    • SGF Challenger annual general meeting | 4:29 AM
    • TAH Tabcorp annual general meeting | 4:29 AM
    • BGA Bega Cheese annual general meeting | 5:13 AM
    • ANZ ANZ-Roy Morgan weekly consumer confidence survey | 5:16 AM
    • DMP Domino's Pizza annual general meeting | 6:08 AM
    • 29
    • MMS McMillan Shakespeare Group annual general meeting | 2:18 AM
    • QRX QRxPharma annual general meeting | 2:18 AM
    • TTS Tatts annual general meeting | 4:06 AM
    • AOFM AOFM to issue $600 million of April 21, 2029 Treasury bonds | 4:59 AM
    • DXS Dexus Property Group annual general meeting | 5:40 AM
    • AGO Atlas Iron annual general meeting | 5:41 AM
    • JBH JB Hi-Fi annual general meeting | 5:42 AM
    • MOC Mortgage Choice annual general meeting | 6:05 AM
    • NIB nib Holdings annual general meeting | 6:08 AM
    • TPI Transpacific Industries annual general meeting | 6:09 AM
    • SUN Suncorp chief executive Patrick Snowball speaking at American Chamber of Commerce in Australia lunch | 6:09 AM
    • GXL Greencross annual general meeting | 6:46 AM
    • 30
    • IAG IAG annual general meeting | 2:19 AM
    • NAB NAB full year results | 4:23 AM
    • AAD Ardent Leisure annual general meeting | 4:24 AM
    • PAS PAS Group annual general meeting | 4:25 AM
    • FDC Federation Centres annual general meeting | 4:25 AM
    • FLT Flight Centre annual general meeting | 4:26 AM
    • PPT Perpetual annual general meeting | 5:13 AM
    • NCK Nick Scali annual general meeting | 5:18 AM
    • HIA HIA New home sales for September | 5:19 AM
    • AOFM AOFM to issue $500 million of Treasury notes, maturing on February 27, 2015 | 5:19 AM
    • FNP Freedom Foods annual general meeting | 5:19 AM
    • TOL Toll Group investor day | 5:35 AM
    • UGL UGL annual general meeting | 5:42 AM
    • ABS Australian Bureau of Statistics (ABS) international trade price indexes for September quarter | 6:05 AM
    • BTT BT Investment Management full year results | 6:06 AM
    • WES Wesfarmers first quarter sales results | 6:10 AM
    • 31
    • ANZ ANZ full year results | 5:20 AM
    • EGP Echo Entertainment annual general meeting | 5:21 AM
    • ABS ABS producer price indexes for September quarter | 5:22 AM
    • RBA RBA to release financial aggregates for September | 5:22 AM
    • NCM Newcrest Mining annual general meeting | 5:22 AM
    • HIL Hills annual general meeting | 5:23 AM
    • AOFM AOFM to issue $600 million of October 21, 2019 Treasury bonds | 5:23 AM
    • MQG Macquarie Group half year results | 6:09 AM
    • ORG Origin Energy quarterly production report | 6:09 AM

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