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Monday 20

November, 2017 5:04 AM



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18 Share Tips - 14 August 2017

18 Share Tips - 14 August 2017

By Anthony Black 14.08.2017



Simon Herrmann, wise-owl.com

 

BUY RECOMMENDATIONS

 

Regis Resources (RRL)

Chart: Share price over the year

Its Duketon gold mining project in Western Australia offers compelling economics in the current price environment. Management is targeting a gold production increase of between 2.5 per cent and 12.5 per cent in the next financial year, with cash costs at the lower end of the industry average. Regis is well funded, with more than $150 million in cash and gold, enabling the company to weather any short term price volatility. We believe it’s time to increase exposure to gold.

 

Platinum Asset Management (PTM)

Chart: Share price over the year

This funds manager had underperformed due to outflows. In our view, it was also underweight in the top performing US equity market. But strong and dynamic management has responded positively to structural industry changes. Historically, PTM has outperformed in challenging global market conditions, which is possible during the next 12 months. Given this scenario, PTM is a worthy addition to an investment portfolio.

 

HOLD RECOMMENDATIONS

 

Challenger (CGF)

Chart: Share price over the year

We’re attracted to Challenger’s value proposition and track record of creating shareholder value. This investment management firm’s strong performance continues, as sales, net flows and funds under management increase. Challenger is successfully taking advantage of a favourable macro trend in annuities. A stop loss at $11.50 makes sense. The shares were trading at $13.15 on August 10.

 

Beach Energy (BPT)

Chart: Share price over the year

Full year production forecasts can be achieved with existing projects. Given the company’s leveraged exposure to global oil markets, the stock has underperformed in the past six months as crude oil has traded in bear market territory for most of the year. However, BPT remains a well positioned production company, with a strong track record, balance sheet and cash flow generation capabilities.

 

 

SELL RECOMMENDATIONS

 

Astro Japan Property Group (AJA)

Chart: Share price over the year

 

Earlier this month, US private equity firm Blackstone launched a takeover bid for AJA at $7.18 a security. We believe it’s unlikely a competing bid will emerge before shareholders vote on the takeover on September 13. Shareholders can get their money now and invest elsewhere. AJA was trading at $7.15 on August 10.

 

Big Un Limited (BIG)

Chart: Share price over the year

This media and video producer exceeded our projections as investors drove up the share price. Our research suggests the balance of risk is now unfavourable. The stock has run too hard, too fast. On January 3 this year, the shares were priced at 25 cents. The shares were trading at $1.605 on August 10. We believe it’s time to take profit.

 


Les Szancer, AXL Capital Partners

 

BUY RECOMMENDATIONS

 

American Patriot Oil and Gas (AOW)

Chart: Share price over the year

The company recently acquired conventional oil and gas producing assets in Texas that will produce 285 barrels of oil and gas equivalent a day. It expects to grow production to 500 barrels a day by the end of the year. In my view, this paints a brighter future, as it transforms the company into a producer with cash flow. A speculative buy for investors with an appetite for risk. AOW was trading at 3.1 cents on August 10.

 

Equus Mining  (EQE) 

Chart: Share price over the year

An Australian exploration company focusing on resource projects in Chile. Investors responded positively to a maiden drilling result at its Los Domos Gold Silver Project. The shares have risen from 1.6 cents on June 5 to trade at 4.8 cents on August 10. The company has more drilling ahead. Another speculative buy for those with an appetite for risk.

 

HOLD RECOMMENDATIONS

 

Mount Ridley Mines (MRD) 

Chart: Share price over the year

This Australian explorer is targeting nickel copper sulphide deposits in a portion of the Fraser Zone Province in Western Australia. The Fraser Zone Province is where Independence Group (IGO) has its promising Nova-nickel copper mine. The MRD share price was trading below a cent on August 10, so this isn’t a stock for the risk averse. Perhaps more patience is needed.

 

BWX (BWX)

Chart: Share price over the year
 

Makes and distributes skin and hair products. In July, the company acquired the number one natural cosmetics brand in the US. The $US38.4 million purchase of Mineral Fusion National Brands LLC is funded by an extension of the company’s existing debt facilities, so there’s no stock dilution in this deal. I expect the acquisition to add to the bottom line going forward. 

 

SELL RECOMMENDATIONS

 

CSG Limited (CSV)  

Chart: Share price over the year
 

On August 7, the stock was priced at 68.5 cents. Shares in this information technology company were trading at 46.5 cents on August 10. The company expects to recognise a non cash impairment charge of about $55 million when it announces its full year results on August 18. Revenue of about $245 million is below expectations. Bad news tends to hang around.

 

Commonwealth Bank of Australia (CBA)

Chart: Share price over the year
 

Recently delivered a bumper full year profit of $9.88 billion and a higher than expected final dividend of $2.30 a share. But the result was somewhat overshadowed by allegations the CBA had breached money laundering laws. The company’s reputation is under scrutiny. 

 

 


Ryan Gale, PAC Partners

 

BUY RECOMMENDATIONS

 

New Century Resources (NCZ)

Chart: Share price over the year

The share price has been climbing. On August 1, the stock was priced at 50 cents. The shares were trading at 64.5 cents on August 11. This base metal development company is targeting the recommencement of operations at its Century Zinc mine in Queensland. With a strong management team and few ways to play zinc on the ASX, we believe NCZ has the potential to move higher, so consider adding to your portfolio.

 

Anatara Lifesciences (ANR)

Chart: Share price over the year

This biotech is developing non-antibiotic oral solutions for gastrointestinal diseases in animals and humans. It’s set for a significant commercial re-launch in calendar year 2018. It has a strong internal team, platform and globally significant partners. ANR is aiming for first commercial sales of its product next year. It has $12 million in cash, and strong technical support to guide it through to revenue.

 

HOLD RECOMMEMDATIONS

 

Bega Cheese (BGA)

Chart: Share price over the year

Offers a range of growth opportunities in food and beverages, but we have moved from a buy to a hold after a strong performance in the past two years. We expect bolt-on acquisitions and fresh internal activities to lift earnings per share from here. 

 

Select Harvests (SHV)

Chart: Share price over the year

The almond maker’s earnings downgrade cuts our fiscal year 2017 EBIT by 30 per cent to $18.8 million. We have forecast a 20 per cent fall in fiscal year 2018 EBIT to $37.4 million. SHV is pro-active enough to use challenging times to diversify into internal and external opportunities. The business is ticking along well, but we don’t see enough upside to support a buy recommendation.

 

SELL RECOMMENDATIONS

 

Aurora Labs (A3D)

Chart: Share price over the year

Specialises in 3D metal printing and has enjoyed a super run. Listing 12 months ago at 20 cents, the stock skyrocketed to a 12 month high of $5.39 on November 30, 2016. The price rise showed just how much interest there was in the sector. However, in our view, A3D has found itself competing with constantly advancing 3D printing technologies, which contributed to investors jumping ship to stay one step ahead in this fast paced sector. The shares were trading 70.5 cents on August 11.

 

Atlas Iron (AGO)

Chart: Share price over the year

We question whether the current strength in the iron ore price can be sustained given the fundamental increase in supply hasn’t been matched by demand. So, we can see an iron ore price correction, which could pressure margins of relatively higher cost producers, such as AGO. Atlas iron is also full leveraged to the iron ore price as a single commodity company.

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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