Boe Campion, Ord Minnett
BUY RECOMMENDATIONS
Bellamy’s Australia (BAL)


Chart: Share price over the year

Potential exists for strong earnings growth momentum to continue, particularly via a bigger supply agreement and greater penetration of offshore markets, most notably China. We believe forward earnings multiples more than capture the risk to growth as a result of further proposed regulatory changes in China. The regulatory changes are set to be implemented in 2018. Shares in the infant formula company closed at $13.45 on August 11.  Shaver Shop Group (SSG)

Chart: Share price over the year

We believe Shaver Shop’s solid organic earnings momentum can be maintained, with its recent IPO enabling it to continue its store rollout and franchise buyback programs without stretching the balance sheet. Furthermore, on face value, its fiscal year 2017 prospectus forecasts appear conservative, creating the potential for it to upgrade guidance at its first half  result. HOLD RECOMMENDATIONS
Mirvac Group (MGR)

Chart: Share price over the year
 Higher equity may be required to settle residential purchases if cooling measures slow residential supply. This, combined with uncertainty around Chinese capital controls, could lead to increased settlement risk for inner city apartments. We have cut our price target from $2.10 to $2.07, but retain a hold recommendation. The shares finished at $2.10 on August 11.
Blackmores (BKL) 
Chart: Share price over the year

The vitamins and supplements maker suffered from heightened uncertainty arising from stricter regulations in China. We believe this fear has been over played. We look forward to the full year result on August 24 confirming the story remains intact. SELL RECOMMENDATIONS
Woolworths (WOW)

Chart: Share price over the year

Fierce competition from Aldi and Coles remains a significant challenge. Restructuring the business is going to take time. Given the lack of valuation support, the risk/reward equation isn’t compelling, so we lighten our recommendation. Smartgroup Corporation (SIQ) 

Chart: Share price over the year
 The share price of this salary packaging and fleet management company has risen from $3.98 on February 12 to finish at $7.20 on August 11. Since then, we have seen two acquisitions, a Federal Budget that left novation leasing alone and a federal election. In our opinion, the stock is now supporting multiples ahead of its risk profile and we would look to lighten on recent price strength.

Michael Wayne, KOSEC
BUY RECOMMENDATIONS
Healthscope (HSO)

Chart: Share price over the year

This private healthcare provider and its competitor Ramsay Health Care (RHC) enjoy a dominant market share with high barriers to entry. HSO has been successfully closing the gap on RHC by making operational efficiencies and improving margins. Expansion has helped propel growth, with HSO adding 318 beds and 18 operating theatres in four years. HSO has three additional projects in the pipeline set to deliver another 163 beds and 9 theatres within 12 months.
iSentia Group (ISD)


Chart: Share price over the year

ISD services 92 of the top 100 global brands and has 5000 clients. Average tenure for the top 50 clients is 11 years. No single client accounts for more than 2 per cent of this media monitoring company’s revenue base. Diversity is a strength, as ISD doesn’t rely on a single source of income. ISD operates within a $US400 million industry in the Asia Pacific region, which is projected to continue growing at mid double digit levels for the next few years. 
HOLD RECOMMENDATIONS
REA Group (REA)


Chart: Share price over the year

Website realestate.com.au is one of the preeminent e-commerce businesses on the ASX. Nine out of 10 real estate agents use its services. The site enjoys enormous pricing power because browsers spend much more time on it compared to competitors. REA generates revenue from charging real estate agents a subscription fee, from charging agents a fee per listing and from advertising space on its web page. The business has been increasing revenue and margins despite the number of listing going sideways.
ResMed (RMD)


Chart: Share price over the year

The medical device maker recently reported fourth quarter revenue of $518.6 million, a 14 per cent increase on the prior corresponding period.  RMD has been generating high free cash flows for many years and, as a result, is debt free. Capacity exists to conduct share buybacks, which will support earnings per share. Earnings and return on equity have been consistently growing for 10 years.
SELL RECOMMENDATIONS
Flight Centre (FLT)


Chart: Share price over the year

Fierce online competitors are posing challenges for FLT. By August 11, 2016, earnings growth had stagnated, leading the company to downgrade guidance three times in 18 months. FLT faces tougher competitive times as it looks to improve its blended online and physical models that offer the convenience of the internet and high level service.
Wesfarmers (WES)


Chart: Share price over the year

WES is a mature business and future growth drivers remain unclear. As a conglomerate, several businesses are performing well, such as Bunnings, Officeworks and Coles. But coal and agribusinesses are struggling. Therefore, it tends to be a zero sum game. Earnings stagnate and the share price basically trends sideways.

Michael Gable, Fairmont Equities
BUY RECOMMENDATIONS
Bellamy’s Australia (BAL)

Chart: Share price over the year

The infant formula company has previously found strong support near $10. After a struggle, it pushed through resistance at $12 on strong volume. We expect BAL to resume the longer term uptrend and head to new highs later this year. The shares were trading at $13.43 on August 11.
Capilano Honey (CZZ)

Chart: Share price over the year

Premium honey sales to China are increasing and we believe the stock is cheap at current levels. It’s trading within an ascending triangle formation, and we’re expecting an imminent breakout to the upside. If this happens, we expect a swift move to mid $20 levels. The shares were trading at $19.92 on August 11. 
HOLD RECOMMENDATIONS
Blackmores (BKL)

Chart: Share price over the year

Price action has turned bullish in the past few weeks as it bounced off its previous low near $130. We have also seen a buy signal triggered on the weekly MACD (moving average convergence divergence). We anticipate the vitamins and supplements maker to move higher, with resistance kicking in around $190. The shares were trading at $157.47 on August 11.
Mantra Group (MTR)

Chart: Share price over the year

The accommodation services provider looks undervalued. The share price is finding good support at low $3 levels. If the stock can break through $3.80, then it should move towards the next level of resistance near $4.20. The shares were trading at $3.505 on August 11.
SELL RECOMMENDATIONS
Adelaide Brighton (ABC)

Chart: Share price over the year

The building materials company is looking expensive and several sell signals are emerging on the charts. The company reports at the end of August. We’re concerned the market’s lofty expectations may not be met. This leaves ABC vulnerable to some significant downside. 
Insurance Australia Group (IAG)

Chart: Share price over the year

Another stock that looks expensive. The shares have enjoyed a steady climb since June 29 when priced at $5.34. We can see major resistance around $6. The shares were trading at $6.045 on August 11. If it fails to go higher, then we expect the price to fall back towards $5.

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