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Friday 28

April, 2017 6:20 PM



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18 Share Tips - 18 April 2017

18 Share Tips - 18 April 2017

By Anthony Black 18.04.2017



Michael Gable, Fairmont Equities

 

BUY RECOMMENDATIONS

 

Whitehaven Coal (WHC)

Chart: Share price over the year

During the past few months, WHC has formed a symmetrical triangle on the chart as the stock consolidated a big move from 2016. With the stock recently closing above $3 on higher volumes, it’s broken out from this triangular consolidation. This means WHC should rally to at least mid $3 levels. Traders should place a stop just under the breakout zone. The shares were trading at $3.07 on April 13.

 

AUB Group (AUB)

Chart: Share price over the year

From late 2013 to early 2016, AUB corrected against the long term uptrend by falling from almost $13 to about $8. It then broke that short term downtrend in May last year and started trending higher again. During late 2016 and early 2017, it formed a symmetrical triangle. In the past few weeks, it has broken out on good volume. We expect this risk management and solutions provider to head to a new high. The shares were trading at $11.70 on April 13.

 

HOLD RECOMMENDATIONS

 

Gateway Lifestyle Group (GTY)

Chart: Share price over the year

After reporting in February, GTY, which offers designer homes in a community environment, formed a bullish engulfing candle on a weekly candlestick chart, signifying a possible reversal of a downtrend. Since then, the stock has traded in the top half of this candle, which is also a bullish sign. With the stock breaking above resistance at $2.15, we expect a quick move to at least $2.30. If it can clear $2.30, then it should be able to climb towards strong resistance near $2.70. The shares were trading at $2.165 on April 13.

 

Flight Centre (FLT)

Chart: Share price over the year

While FLT may have several structural problems, the market seems happy to push it higher. It appears to have broken above a falling wedge on good volume. It should now at least head to the base of the wedge, which is near $34 in the short term. At this point, we would consider moving FLT to a sell recommendation. The shares were trading at $31.08 on April 13.

 

 

SELL RECOMMENDATIONS

 

DWS Limited (DWS)

Chart: Share price over the year

We recently saw this IT solutions provider break below support near $1.55 on increased volumes. We expect it to trade lower, with support coming in near $1.45. If that level can’t hold, then we expect it to fall towards $1.35. The shares were trading at $1.485 on April 13.

 

Harvey Norman (HVN)

Chart: Share price over the year

HVN recently broke trend line support. Investors may avoid buying HVN until the outcome of a routine ASIC review into HVN’s financial report for the financial year ending in June 30, 2016 is known. We can see the stock falling to support near $3.75. If that level can’t hold, we can see levels potentially as low as $3.20. The shares were trading at $4.37 on April 13.

 


Michael Heffernan, PhillipCapital

 

 

BUY RECOMMENDATIONS

 

Challenger (CGF)

Chart: Share price over the year

Develops and sells annuity income stream products. A strong sharemarket performer, it offers solid growth potential and was recently trading on a fully franked dividend yield of 2.6 per cent. Given the prospect of a reasonably buoyant economic outlook, this stock appeals.

 

Corporate Travel Management (CTD)

Chart: Share price over the year

This corporate travel information provider in Australia and overseas delivered an impressive recent result and double digit earnings growth is expected going forward. It’s also expanding in the US and its sharemarket fundamentals are solid.

 

 

HOLD RECOMMENDATIONS

 

Steadfast Group (SDF)

Chart: Share price over the year

Provides services and owns equity interests in a network of insurance broking firms operating throughout Australia. It also has equity interests in insurance underwriting agencies. This impressive performer has little debt and pays a moderate fully franked dividend.

 

 

Pact Group (PGH)

Chart: Share price over the year

Makes packaging for customers in the food, beverage, personal care and industrial sectors. It’s been a resolute performer during the past year. It was recently trading on a fully franked dividend yield of 3.5 per cent and it offers a solid profit outlook. 

 

 

SELL RECOMMENDATIONS

 

Harvey Norman (HVN)

Chart: Share price over the year

Its recent report was satisfactory. While it’s a fundamentally solid stock, investors are concerned that Amazon’s likely expansion in Australia will negatively impact HVN’s performance. Other online retailers also heighten competition in HVN’s space.

 

JB HI-FI (JBH)

Chart: Share price over the year

After digesting The Good Guys, its share price has retreated. Like Harvey Norman, JBH is a sound company, but future growth is now less certain. Appointing former JB Hi-Fi CEO Terry Smart to lead The Good Guys seems a good move, but the retail sector isn’t sharemarket flavour of the month.

 


Darren Jackson, Sanlam Private Wealth

 

BUY RECOMMENDATIONS

 

Todd River Resources (TRT)

Chart: Share price over the year

Todd River Resources was a recent 20c IPO after it was spun out of TNG Limited. Sanlam Private Wealth acted as lead manager. At April 13, 2017, the market cap was almost $12 million, with $5.5 million in the bank. Its valuation is underpinned by the Manbarrum zinc deposit, which is one of the largest undeveloped zinc deposits in Australia. Drilling at the Mount Hardy copper-zinc project is underway. We believe TRT offers value. The shares were trading at 21.5 cents on April 13.

 

 

Metals Australia (MLS)

Chart: Share price over the year

Metals Australia is a diverse junior explorer for zinc, lithium and graphite over three different projects. Its balance sheet was recently strengthened via a placement managed by Sanlam Private Wealth. Director Gino D’Anna has strong track record of creating shareholder value in Canadian resources projects, with previous successes at MetalsTech (MTC) and Atrum Coal (ATU). Trading at less than a cent on April 13, MLS is a most speculative buy that suits only those with an appetite for risk. 

 

 

HOLD RECOMMENDATIONS

 

BHP Billiton (BHP)

Chart: Share price over the year

The share price recently jumped about 4 per cent on news that US hedge fund Elliott Management proposed scrapping BHP’s dual listed company structure, spinning off the US petroleum business and optimising its capital return policy. BHP rejected the proposal, but Elliott Management, which holds about a 4 per cent stake in BHP’s London listing, is keen to unlock value and is a staunch activist.     

 

WorleyParsons (WOR)

Chart: Share price over the year

In February 2017, global engineering firm Dar Group took a 13.35 per cent stake in WorleyParsons. The Dubai-based Dar Group had made an indicative proposal to acquire 100 per cent of Worley in November 2016. Now, Dar Group has taken its stake in Worley up to 15.15 per cent as at April 12.

 

 

SELL RECOMMENDATIONS

 

Costa Group (CGC)

Chart: Share price over the year

We liked this fruit and vegetable grower when it was trading at a discount to its IPO price after listing in July 2015. We recommended it as a buy at $1.94 on September 7, 2015. The stock closed at $4.60 on April 12, 2017. We view Costa Group as fully valued and now is a good time to take some profits.

 

Fortescue Metals Group (FMG)

Chart: Share price over the year

We don’t believe the big increase in spot iron ore prices can be sustained over the medium term. Chinese iron ore stockpiles were recently at 10 year highs. Fortescue Metals has done a great job in strengthening its balance sheet and reducing cash costs. But it still remains leveraged to the iron ore price, which we believe will weaken going forward.

 

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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