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18 Share Tips - 24 June 2013

18 Share Tips - 24 June 2013

By Anthony Black 24.06.2013


Peter Russell, Russell Research

BUY RECOMMENDATIONS

Amcom Telecommunications (AMM)

CHART

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

A rapidly growing Perth-based IT and telecommunications group in the S&P/ASX 300 Index. A wide fibre optic network supports national telecommunications, data, IT and cloud managed services to business and government. Expect earnings to continue at about a 20 per cent growth rate with a franked yield of 4 per cent in full year 2014 and negligible debt. I’m comfortable with the reaction to Wyllie Group selling 8 million shares. Its remaining 7.8 million creates a good buying price.

Carsales.com (CRZ)

CHART

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

Enjoying the strong car market, it dominates Australian online browsing with sound growth in display advertising, dealer and data services. More than 20 per cent earnings growth and a net cash position supports expansion in related areas and general classifieds. It’s acquiring a 30 per cent stake in Brazil’s leading auto website and 19.9 per cent in an Asian site. Expect benefits from both. Look to a 3.7 per cent franked yield and continuing share price upside.

HOLD RECOMMENDATIONS

Credit Corp Group (CCP)

CHART

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

CCP acquires debt ledgers from credit providers. Learning from severe GFC burnout after over-played expansion, it has been rebuilt in a controlled manner. Yet profit growth has still been rapid, with a 20 per cent return on equity and no net debt. An organically grown consumer loan book and a timely staged build-up of debt ledger operations in the US add opportunities to retain double-digit growth.

Domino’s Pizza Enterprises (DMP)

CHART

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

Domino’s displays innovation and high product standards. A leader in mobile and online delivery, it’s built a large base of outlets. Experience in Australia and New Zealand is deployed across Europe. Earnings growth at 20 per cent and net cash underpins the price/earnings ratio and a 3 per cent franked full year 2014 yield.

SELL RECOMMENDATIONS

Macquarie Atlas Roads Group (MQA)

CHART

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

Created in 2010, it holds stakes in six toll roads. The key one is a 19.44 per cent stake in APRR, with more than 2200 kilometres of road network in France. Three others in the US, one in the UK and one in Germany added only 6 per cent of full year 2012 asset earnings. A relic of pre-GFC leverage, partly tidied up and now paying unfranked dividends, its traffic performance is flat. Further improvement, restructuring or asset sales are a long-term aim. Near its 2011 peak, so sell.

Sigma Pharmaceuticals (SIP)

CHART

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

One of three pharmaceutical distributors, wholesalers and brand owners, Sigma has been on the back foot since its price rose above $6 in late 2006. Each player has fought for market share as margins declined and the Government contained its spending on health care. The share price is up from 23 cents in 2010, but upside looks negligible. The shares were trading at 77 cents on June 19. Prefer others.

 

Chris McGrath, Alto Capital

BUY RECOMMENDATIONS

Woodside Petroleum (WPL)

CHART

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

As Australia’s premier oil and gas play, WPL’s operations include LNG, natural gas, condensate, crude oil and LPG. Forays into the US and the Middle East add a minor international complexion. LNG interests in the North West Shelf Joint Venture (NWSJV) at offshore Western Australia are the mainstay. Production is forecast to grow strongly. With forecast earnings increasing 9 per cent this year, it’s still worth buying.

AWE (AWE)

CHART

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

AWE joined the ranks of serious mid-tier oil and gas companies in 2006, with production at Casino, Cliff Head and BassGas. Production from Tui in New Zealand began in July 2007. A key strategy is to develop discoveries near installed infrastructure. It offers strong management, low sovereign risk and exploration upside. A healthy balance sheet with $30 million net cash appeals.

HOLD RECOMMENDATIONS

Amcor (AMC)

CHART

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

AMC manages a global network of packaging plants across various product segments. Boosted by the acquisition of Alcan, operations are progressing well. With currency finally moving in the right direction for it, the outlook is improving.

Bendigo and Adelaide Bank (BEN)

CHART

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

BEN’s competitive advantage is public goodwill and trust after rolling out branches in locations deserted by larger banks. The Adelaide Bank merger diversified the balance sheet, while expanding the geographical footprint. BEN’s relatively conservative managed retail bank complements the mortgage broker and wholesale banking focus of Adelaide Bank.

SELL RECOMMENDATIONS

BlueScope Steel (BSL)

CHART

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

BlueScope Steel is an Australian steel maker producing hot rolled, coated steel and building products. The focus is on growing the midstream and downstream value added segments, particularly coated steel and building products. The business is capital intensive and margins are volatile.

JB Hi-Fi (JBH)

CHART

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

JB Hi-Fi operates more than 180 branded electrical stores across Australia and New Zealand and is rapidly growing via an aggressive store roll out program. Potentially threatened by the economic environment and online sales, we believe JBH will find it increasingly difficult to reach sales targets.

 

Mark Lennox, HC Securities

BUY RECOMMENDATIONS

National Australia Bank (NAB)

CHART

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

NAB is among the world’s top 20 biggest banks by market capitalisation. The recent retreat in the banking sector represents a fantastic entry point during the next three-to-six months. Downside pressure was exacerbated by offshore selling, as offshore fund managers liquidated positions in fear of losing between 10 and 20 per cent on their Australian assets with a falling currency.

QBE Insurance (QBE)

CHART

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

QBE provides insurance services to the Asia Pacific region, the US, Canada and Europe. QBE has experienced a triple whammy in the past few years with natural disasters, a rising Australian dollar and falling US bond yields impacting earnings. But the stock has rallied on a falling Australian dollar and expectations of an unwinding in quantitative easing strengthening US bonds and rates. We expect QBE to strengthen in this year’s second half.

HOLD RECOMMENDATIONS

Westpac Bank (WBC)

CHART

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

The share price has fallen significantly since the start of May and was recently trading on a 2013 price-to-earnings multiple of about 12 times. Provided unemployment doesn't rise above 10 per cent, we consider WBC as a fantastic medium-to-long term hold.

ANZ Bank (ANZ)

CHART

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

ANZ is well positioned to grow into the Asian market while retaining its large deposit base across Australia and New Zealand. Like Westpac, it offers reliable dividends and the prospect for capital growth.

SELL RECOMMENDATIONS

Newcrest Mining (NCM)

CHART

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

Newcrest Mining is facing scrutiny from regulators about its disclosure of a possible $6 billion writedown after gold slid into a bear market. Newcrest, which flagged the charge on June 7, halted some of its higher cost gold mines. Newcrest's market value has fallen more than $2 billion this month. With production expected to be relatively flat next year, we don't see much upside in NCM.

Regis Resources (RRL)

CHART

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

A gold company focusing on its tenement package in Western Australia. Its main projects include Moolart Well, Garden Well and Rosemont. RRL also conducts exploration activities in several deposits in the eastern goldfields. The gold price has been trending down and we expect the share price to follow.

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 5 September 2014
    • 01
    • RP Data RP Data Rismark Home Value Index for August | 1:01 AM
    • TD Securities TD Securities-Melbourne Institute inflation gauge for August | 6:08 AM
    • PMI Australian Industry Group performance of manufacturing (PMI) index for August | 6:10 AM
    • ABS Australian Bureau of Statistics (ABS) business indicators for June quarter | 6:11 AM
    • RBA Reserve Bank of Australia (RBA) index of commodity prices for August | 6:11 AM
    • 02
    • ABS ABS Building approvals for July | 2:17 AM
    • Dun and Bradstreet Dun and Bradstreet business expectations survey | 4:59 AM
    • ANZ ANZ-Roy Morgan weekly consumer confidence survey | 5:41 AM
    • ABS ABS Balance of Payments and International Investment Position for the June quarter | 6:08 AM
    • RBA Reserve Bank of Australia monthly board meeting and interest rate decision | 6:08 AM
    • ANZ ANZ chairman David Gonski to address an Australian British Chamber of Commerce lunch | 6:09 AM
    • ABS ABS government finance statistics for June quarter | 6:09 AM
    • 03
    • Employee Fraud and Theft seminar Employee Fraud and Theft seminar: Jeff Smith and Stuart Snaith from Regents Risk Advisory talking about how companies can prevent, investigate and recover losses from fraud | 2:18 AM
    • RBA RBA governor Glenn Stevens delivers keynote address at CEDA event | 2:18 AM
    • Paydirt Africa Down Under conference Paydirt Africa Down Under conference, day one of three | 2:19 AM
    • AOFM AOFM to issue $600 million of April 21, 2026 Treasury bonds | 2:23 AM
    • ABS ABS national accounts, including gross domestic product for June quarter | 4:58 AM
    • PSI Australian Industry Group Australian Performance of Services Index (PSI) for August | 5:41 AM
    • Kim Williams Book launch by former New Corp Australia CEO Kim Williams | 6:46 AM
    • 04
    • ABS ABS overseas arrivals and departures for July | 5:35 AM
    • ABS ABS retail trade for July | 5:40 AM
    • AOFM AOFM to issue $500 million of Treasury notes, maturing on January 23, 2015 | 5:42 AM
    • ABS ABS international trade in goods and services for July | 5:42 AM
    • Paydirt Africa Down Under conference Paydirt Africa Down Under conference, day two of three | 6:05 AM
    • CEDA CEDA Economic Prosperity event, speakers include Flinders University vice chancellor Michael Barber and UK Parliamentary Office of Science and Technology director Chris Tyler | 6:05 AM
    • 05
    • PCI Australian Industry Group/Housing Industry Association performance of construction index (PCI) for August | 6:06 AM
    • Paydirt Africa Down Under conference Paydirt Africa Down Under conference, day three of three | 6:07 AM
    • AOFM AOFM to issue $1.5 billion of October 21, 2019 Treasury bonds | 6:10 AM

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Featured Comment

The housing sector has cooled slightly this year from a strong base. But the outlook remains positive, with interest rates expected to remain on hold this year and probably well into 2015. The risks are on the upside, with housing potentially doing better

Time to take profits in this bank?

Broker buys

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Broker sells

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Central Banks Rates

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  • FED0.25%
  • BOE0.50%
  • BOC1.00%
  • RBNZ3.25%
  • ECB0.15%
  • SNB0.00%
  • BOJ0.10%

Upcoming dividends

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  • MHIMerchant House Intl Ltd, 0.5c, 0%20/08/14
  • WICWestoz Inv Co Ltd, 4.5c, 100%07/08/14
  • OZGOzgrowth Limited , 0.75c, 100%07/08/14
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Upcoming Floats

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  • Float Date
  • GVFGlobal Value Fund Ltd14/07/14
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