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18 Share Tips - 31 July 2017

18 Share Tips - 31 July 2017

By Anthony Black 31.07.2017



Michael Gable, Fairmont Equities

 

BUY RECOMMENDATIONS

 

Beach Energy (BPT)

Chart: Share price over the year

The BPT chart is a textbook example of a stock finding a low and preparing to rally. In the past few weeks, BPT has made a higher high and higher low, with recent moves looking particularly bullish. BPT is likely to continue pushing higher.  

 

Capitol Health (CAJ)

Chart: Share price over the year

The stock was once a market darling, but after trading around $1.10 in 2015, it fell below 20 cents less than a year later. It appears to have completed its base building, with the stock rounding out a low of 10 cents on November 16, 2016. It’s jumped out of that base and should keep rallying higher. The shares were trading at 28 cents on July 27.

 

HOLD RECOMMENDATIONS

 

JB Hi-Fi (JBH)

Chart: Share price over the year

We turned positive on this consumer electronics giant in June and the share price continues to deliver. Price action still looks very positive and we can see further upside towards $27. The shares were trading at $25.64 on July 27. We will reassess whether it’s time to take profits closer to our target. 

 

BHP Billiton (BHP)

Chart: Share price over the year

The share price of this global miner recently jumped from $24.40 on July 24 to trade at $25.79 on July 27. It has recently broken a downtrend, but the chart shows it may re-test levels below the July 27 trading price in the future. Hold for now, but happy to buy more on dips. 

 

SELL RECOMMENDATIONS

 

Qantas Airways (QAN)

Chart: Share price over the year

We’ve seen the warning signs on the QAN chart. There was a lot of price rejection around $5.80, and it has struggled ever since. In our view, we’ve probably seen a top for now and it could be a shorting opportunity for traders. The most obvious support level will be back in the $4 to $4.50 range. The shares were trading at $5.32 on July 27. 

 

Suncorp (SUN)

Chart: Share price over the year

In the past few weeks, this financial services company tried to go to a new high, but failed on heavy selling, confirming our previous sell recommendation. Also, volume is starting to pick up on the way down, which is a negative sign. In our opinion, any dead cat bounce towards mid $14 levels is another selling opportunity.

 


Michael Heffernan, PhillipCapital

 

 

BUY RECOMMENDATIONS

 

 

Kogan.com (KGN)

Chart: Share price over the year

This online retail giant has announced three profit upgrades since listing only a year ago. Its future growth prospects look strong and it could pleasantly surprise even more. It’s a good small stock for investors prepared to take measured risk. Consider adding to balanced portfolios.

 

 

Link Administration Holdings (LNK)

Chart: Share price over the year

This major share registry business has an enviable track record of consistently delivering sound results in challenging circumstances. It’s been a solid sharemarket performer in recent years. Its fundamentals are attractive and the outlook is positive. Its recent UK acquisition of Capita Asset Services looks promising.

 

HOLD RECOMMENDATIONS

 

 

Breville Group (BRG) 

Chart: Share price over the year

A strong sharemarket performer in the past year. Its first half 2017 report posted a 9.4 per cent increase in net profit after tax to $33.7 million. Revenue rose to 2.4 per cent to $339.2 million. It has a significant presence in premium electrical appliances in Australia and the US. 

 

Costa Group (CGC)

Chart: Share price over the year

Profit growth potential appears attractive for this specialist horticultural company. CGC has signed an agreement to acquire the Lankester Avocado orchards and packing operations. We expect the acquisition to be a good fit.

 

 

SELL RECOMMENDATIONS

 

 

Coca-Cola Amatil (CCL)

Chart: Share price over the year

Investors recently punished the stock on reports Woolworths will trim CCL’s Mount Franklin water product lines in supermarkets. Also, Woolworths recently confirmed it wouldn’t stock CCL’s new no sugar Coca-Cola product. CCL is under pressure. Best to wait for a turnaround in its fortunes.

 

Medibank Private (MPL)

Chart: Share price over the year

The health insurer is operating in an increasingly competitive market. The shares have fallen from $3.01 on May 11 to trade at $2.715 on July 27. Its recent fully franked dividend yield of 4.4 per cent remains the attraction. Better capital growth options exist elsewhere. 

 


Tony Paterno, Ord Minnett

 

BUY RECOMMENDATIONS

 

The Star Entertainment Group (SGR)

Chart: Share price over the year

We expect continuing earnings growth, particularly from its Brisbane and Gold Coast casinos. We believe the Australian domestic gaming market is growing, which should be positive for Star given its 40 per cent market share. Star’s electronic gaming machine business offers a high margin, predictable and recurring portion of earnings.  

 

Oil Search (OSH)

Chart: Share price over the year

Our positive view is primarily driven by the company’s low cost assets. The Papua New Guinea LNG project is a key example, as it’s well placed to weather lower commodity prices. Growth options also appeal via planned ownership consolidation and development of the Papua New Guinea LNG project. We believe Oil Search offers longer term corporate appeal for larger industry players. 

 

HOLD RECOMMENDATIONS

 

Amcor (AMC)

Chart: Share price over the year

Potential for incremental earnings growth exists via re-allocating free cash flow into value creating acquisitions and/or buybacks. However, we believe the share price reflects a balanced to optimistic view on Amcor’s ability to execute on its re-investment. In the near term, potential for capital management initiatives improves the investment case, offsetting a stretched valuation.

 

Nufarm (NUF)

Chart: Share price over the year

This crop protection products company is focusing on improving business processes, particularly reducing average net working capital. There’s early signs management is delivering targeted benefits from its performance improvement program. Continuing program benefits should drive earnings growth, although we have taken a more conservative estimate than the company.  

 

 

SELL RECOMMENDATIONS

 

QBE Insurance Group (QBE)

Chart: Share price over the year

As a global commercial insurer, QBE is subject to the vagaries of the insurance cycle. In our view, trends in the cycle are currently unfavourable and potentially tighter insurance margins may hamper QBE earnings growth. 

 

Aurizon Holdings (AZJ)

Chart: Share price over the year

The rail freight giant operates in an increasingly competitive environment. We continue to see significant downside risk associated with iron ore volumes and above rail coal margins. 

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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