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Friday 20

April, 2018 2:41 PM



TheBull PREMIUM

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18 Share Tips - 8 February 2016

18 Share Tips - 8 February 2016

By Anthony Black 08.02.2016



Mathan Somasundaram, Baillieu Holst

BUY RECOMMENDATIONS

Credit Corp Group (CCP)


Chart: Share price over the year

The increased appetite for purchased debt leger (PDL) acquisitions in Australia and the US in the 2016 first half should ensure strong fiscal years in 2017 and 2018. Stronger consumer lending will also contribute. We continue to view CCP as a quality play. Our analyst Nick Caley has lifted CCP’s price target from $11.95 to $12.05. The shares closed at $10.76 on February 3.

Emerchants (EML)


Chart: Share price over the year

A solid performer that’s signed an agreement with sports betting company William Hill. We believe UK expansion and a growing online betting sector will propel growth in operating metrics and earnings. Nick Caley’s price target is $1.45. The stock closed at $1.08 on February 4.  

HOLD RECOMMENDATIONS

Aristocrat Leisure (ALL)


Chart: Share price over the year

We rate management highly as its delivered on transforming the gaming operator into a better rounded industry participant in terms of product and distribution. The acquisition of US Group, Video Gaming Technologies, has increased the company’s recurring revenue to about 50 per cent, which has served to materially lift the stock’s rating.

Nick Caley’s price target is $10.80. The shares finished at $10.27 on February 4. 

Event Hospitality & Entertainment (EVT)


Chart: Share price over the year

This entertainment, hospitality and leisure company is a quality defensive stock offering an attractive yield. Investors should look for any possible weakness as a cheaper entry point. It has a strong balance sheet and option value exists through underlying property developments.

SELL RECOMMENDATIONS

The Reject Shop (TRS)


Chart: Share price over the year

We retain a negative view on discretionary retail given rising cost of living pressures and declining real wages. TRS is up against an expanding online retail sector and increasing competition from Big W and Kmart. Better options elsewhere.

Santos (STO)


Chart: Share price over the year

We are negative about the energy sector. The oil price outlook remains weak as the oversupply hangs over declining demand in the next few years. The stretched balance sheet keeps pressure on management to sell assets or consolidate at the low end of the cycle.



Matthew Felsman, APP Securities

BUY RECOMMENDATIONS

Oil Search (OSH)


Chart: Share price over the year

I am bullish about oil in the short term, with oil shorts at record levels. Less supply is imminent from either an OPEC discussion, or more companies closing their doors. If there’s the smallest inkling of a reducing oil supply, the potential exists for a huge short covering rally by leveraged funds. OSH has a good mix of balance sheet strength and future growth. 

Senetas Corporation (SEN) 


Chart: Share price over the year

The global data encryption market is set to be worth more than $165 billion by 2018. Melbourne based SEN controls a significant part of that market, producing world leading, high speed, defence grade encryption technologies. Clients include Microsoft in the US, Missile Command, the National Security Agency, NATO, the Australian Taxation Office and the Australian Federal Police. The shares closed at 12.5 cents on February 4.

HOLD RECOMMENDATIONS

Carsales.com (CAR)


Chart: Share price over the year

CAR is on the verge of a technical breakout that often leads to very strong and consistent trends. CAR offers strong growth potential in the longer term and competition is minimal. New car registrations are hovering at record highs. Talk of an increase in the GST would surely drive up new car registrations prior to the introduction of the tax. 

Bank of Queensland (BOQ)


Chart: Share price over the year

The stock offers impressive earnings per share growth, yield and a defensive solution to investing in, or holding the big four banks. The market is conscious the big four may need another capital injection in 2016. In my view, BOQ is the stand out financial from a growth perspective.  

SELL RECOMMENDATIONS

Magellan Financial Group (MFG) 


Chart: Share price over the year

I believe 2016 is going to be a volatile for equity markets and fund managers tend to get sold off as markets slide. By default, corrections wipe value off portfolio holdings and MFG revenues are driven by the amount of funds under management. The stock entered correction territory and was recently down by more than 20 per cent for the month.

Ten Network Holdings (TEN)


Chart: Share price over the year

I see TEN as a mature business in the declining phase of its life cycle. It recently hit new lows as investors noted changing media consumption habits. Advertising spending favours businesses like Google and Facebook, not newspapers, TV, radio and billboards. The stock is in a clear downtrend.



Michael Heffernan, PhillipCapital

BUY RECOMMENDATIONS 

Magellan Financial Group (MFG)


Chart: Share price over the year

This specialist fund manager offers investors exposure to international stocks, and has been an excellent sharemarket performer during the market turbulence of the past three years. MFG offers solid sharemarket fundamentals, pays an attractive fully franked dividend and should be able to satisfactorily handle adverse currency movements.

Sydney Airport (SYD) 


Chart: Share price over the year

Holds a monopoly position in Sydney as an international airport and benefits from increasing air travel due to lower airfares. The bustling retail and car parking businesses generate strong cash flow and are most appealing. The lower Australian dollar is an added inducement for international travellers.

HOLD RECOMMENDATIONS 

Brambles (BXB)


Chart: Share price over the year

BXB is a supply chain logistics company operating in more than 60 countries, primarily through the CHEP and IFCO brands. It should benefit from a stronger US dollar as it generates significant revenue in America. Expected future earnings growth is also most impressive.

Carsales.com (CAR)


Chart: Share price over the year

Australia’s first and most successful internet car trading business. It has a sound profit growth profile and delivers attractive dividends. Last year’s Federal Budget delivered small business incentives and they no doubt increased vehicle sales, with Carsales.com as the first internet click.

SELL RECOMMENDATIONS

Mineral Resources (MIN) 


Chart: Share price over the year

As a small iron ore producer and mining services company, MIN has been adversely affected by the downturn in the resources sector. In particular, sustained price falls in iron ore and major mining companies reducing capital expenditure have made it most difficult. No relief is on the horizon.

Incitec Pivot (IPL)


Chart: Share price over the year

Slowing explosives demand in the resources sector and an easing in agricultural commodity prices put pressure on future profit growth. Other sectors are preferred until there’s a decisive turnaround in commodity prices.

Please note that Magellan Financial Group is recommended as a buy and a sell this week as market experts hold different views about the company.

 

>> BACK TO THE NEWSLETTER: Click here to read other articles from this week's newsletter


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 20 April 2018
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    • ANZ Roy Morgan Consumer Confidence weekly survey | 9:30 AM
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    • RIO Quarterly operations review | 9:30 AM
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