The Bull

Tuesday 19

September, 2017 9:42 PM



TheBull PREMIUM

  • 18
  • Share
  • Tips

18 Share Tips - 21 August 2017

18 Share Tips - 21 August 2017

By Anthony Black 21.08.2017



Ben Faulkner, Sanlam Private Wealth

 

BUYS RECOMMENDATIONS

 

CSL (CSL)

Chart: Share price over the year

Profit takers moved when this blood products group recently hit an all time high of $145. A stronger Australian dollar has also weighed on the stock. While it may be argued the shares were fully priced or overvalued at $145, we see the recent pull back as a good entry point for a defensive stock that continues to deliver strong reliable earnings. The shares were trading at $127.61 on August 17.

 

Aristocrat Leisure (ALL)

Chart: Share price over the year

This gaming machine company offers a solid and reliable business that consistently grows earnings. In our view, a stronger Australian dollar was behind investors taking profits after recent price highs. We believe the share price retreat provides a buying opportunity, as we expect it to start climbing to recent highs of $23.66 on June 26. On August 17, the shares were trading at $21.40.

 

HOLD RECOMMENDATIONS

 

ALS Limited (ALQ)

Chart: Share price over the year


This analytical laboratory services company is in a nice uptrend since its recent AGM. While it’s at the upper end of its price range, we’re not a buyer and retain our holding position. But we would see any pull back to $7.50 as a buying opportunity as earnings gather momentum with a recovery in commodity exploration. Speaking with junior resource exploration companies, we hear ALQ laboratories have a backlog and are experiencing delays with their assays. So, the next commentary should show increasing volumes and we may see the stock re-rate to higher prices. The shares were trading at $8.035 on August 17.

 

BHP Billiton (BHP)

Chart: Share price over the year

We believe a new bull market commodity cycle is still in the early stages of a multi year cycle. Recently, commodity prices had been moving higher, particularly copper and coal. BHP provides good exposure to a diversified commodity mix and reliable low cost mines. Further increases in commodity prices should be positive for company earnings. We view any pull back below $25 as a good buying opportunity. The shares were trading at $26.025 on August 17. 

 

SELL RECOMMENDATIONS

 

Commonwealth Bank of Australia (CBA)

Chart: Share price over the year

The company is under pressure following allegations it had breached money laundering laws. We believe poor sentiment will continue to weigh on the stock. Also, regulatory attention is likely to remain on the banking sector, adding further pressure. 

 

JB Hi-Fi (JBH)

Chart: Share price over the year

While recent results looked good, we concluded that the commentary was cautious. Integrating The Good Guys acquisition isn’t without risk and the company is up against more competition from online sources, such as Amazon. We view JBH as in a downtrend that may see the stock fall towards $20. The shares were priced at $31.20 on September 7, 2016. On August 17, the shares were trading $25.72. 

 


Tony Locantro, Alto Capital

 

BUY RECOMMENDATIONS

 

Red Metal (RDM)

Chart: Share price over the year

Remains my preferred junior resource company. Stronger lead and zinc prices can lead to an increase in the value of its Maronan resource, which may generate corporate appeal for RDM. In search of major mineral deposits, RDM has an enviable suite of high risk/high reward projects where any one of them could deliver a good result for shareholders.

 

Metal Bank (MBK)

Chart: Share price over the year
 

Recent high grade gold results at the Triumph Project in North Queensland highlight the potential to host a multi million ounce gold deposit. Further drilling to be undertaken in the near term could lead to more exploration at depth in search of a bulk tonnage resource. One of my preferred emerging gold juniors.

 

HOLD RECOMMENDATIONS

 

HRL Holdings (HRL)

Chart: Share price over the year
 

Following the recent acquisitions of Morrison Geotechnic and OCTFOLIO, this environmental management company’s recent quarterly cash flow report showed revenues of $5.5 million and net cash of $199,000 from operating activities. Integrating the two businesses appears to be going well and there’s potential for operational improvements. HRL is one of my key small industrial suggestions, albeit with a higher risk profile.

 

AdAlta (1AD)

Chart: Share price over the year

A small biotech working in fibrosis, which is a niche sector. Antibody AD-114 is being developed and promising pre-clinical toxicology results have been released. A third study is progressing and we expect results to be released soon. Due to a manufacturing delay, we expect the phase one trial of AD-114 to be completed in the second half of 2018. The delay will provide further opportunities to accumulate stock.

 

SELL RECOMMENDATIONS

 

Commonwealth Bank of Australia (CBA)

Chart: Share price over the year
 

In my view, the east coast property bubble is in its final stages. The bank stands accused of breaching money laundering laws, which has put its reputation under intense scrutiny. The money laundering allegations somewhat overshadow its recent record full year profit of $9.88 billion. 

 

Westpac Bank (WBC)

Chart: Share price over the year
 

WBC’s share price has been more stable than CBA’s. However, over stretched property prices, particularly in Sydney and Melbourne, is behind my recommendation. Also, calls for a Royal Commission into banking are getting louder and this is likely to have a major impact on sentiment. 

 


Robert Makdissi, Baillieu Holst

 

 

BUY RECOMMENDATIONS

 

Janus Henderson Group PLC (JHG)

Chart: Share price over the year

The recently released 2017 second quarter result was ahead of our expectations. It was partly due to a strong fund performance, better fund in-flows and margins exhibiting a stronger underlying business. Synergies post the recent merger are ahead of schedule. Higher funds under management and improving performance create upside risk. The company offers good relative value in the funds management sector.

 

Praemium (PPS)

Chart: Share price over the year

The recent annual result for this financial services technology provider shows strong revenue growth combined with margin expansion. The company is actively seeking growth in higher margin international products and new capabilities, both organically and via acquisition. We continue to believe in the structural growth of separately managed account (SMA) platforms. This should result in the company continuing its strong growth trajectory. It’s currently trading at attractive market multiples, considering the expected growth in revenue.

 

 

HOLD RECOMMENDATIONS

 

Mayne Pharma Group (MYX)

Chart: Share price over the year

A recent market update revealed thinner margins in generic pharmaceuticals. MYX is experiencing margin pressure in the US generics market, which may create short term headwinds. Other divisions continue to perform strongly. The company is trading on undemanding multiples and has a strong product pipeline.

 

Nufarm (NUF)

Chart: Share price over the year

A stronger Australian dollar and weaker seasonal conditions have been reflected in a softer share price for this crop protection products company. While volatility is expected to continue due to the nature of any agricultural focused business, we believe this underplays the longer term cost efficiency story for the company. Corporate activity continues to be an upside risk.

 

 

SELL RECOMMENDATIONS

 

APA Group (APA)

Chart: Share price over the year

The emerging east coast gas supply shortfall is attracting attention from regulators and policy makers. APA could be pressured to cut pipeline charges, which would reduce medium to long term revenue growth and prevent windfall returns. In our view, there’s little scope for growth, either organically or via acquisition in what we see is an increasingly competitive market. Any increase in bond yields will leave this energy infrastructure company exposed to a potential share price fall.

 

JB Hi-Fi (JBH)

Chart: Share price over the year

While its recent report showed good year on year sales growth, we believe the company faces headwinds, including Amazon’s entry into the domestic market. Add a benign wage growth environment and we believe discretionary spending will struggle to increase. 

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. 


FROM THE NEWSLETTER

How international competition affects how much you earn

There are two ways that international... More

Investor Signposts: Week Beginning September 18 2017

If it wasn't for the Reserve Bank, it would be... More

Major Gold-Stock Breakouts

Gold stocks latest surge has surprised many... More

How the 'tyranny of distance' affects the Australian economy

New technologies and economic growth in Asia... More



WHAT’S ON THIS WEEK

week 22 September 2017
    • 18
    • ABS New motor vehicles sales for August | 9:30 AM
    • 19
    • RBA Minutes of board\'s September monetary policy meeting | 9:30 AM
    • 20
    • RBA Luci Ellis speaks at the ABE conference | 9:30 AM
    • 21
    • SUN Annual general meeting | 9:00 AM
    • 22
    • N/A No items listed | 9:30 AM

TheBull.com.au

TheBull.com.au

TheBull PREMIUM article search



Markets
Index: Points Change Percent

Featured Comment

I have was bullish on Sydney Airport for many years, principally because of the megatrend of in-bound Asian tourism into this country.

Aviation-related stocks flying higher

Broker buys

  • ASX Code
  • Company
  • Broker
  • SEASundance EnergyMorgans
  • ASHAshley Services GroupMorgans
  • DDRDicker DataWise-owl.com
  • GAPGale PacificWise-owl.com
  • AYSAmaysimKOSEC
  • ALUAltiumKOSEC

Broker sells

  • ASX Code
  • Company
  • Broker
  • DMPDomino`s PizzaMorgans
  • MTOMotorCycle HoldingsMorgans
  • MWRMGM WirelessWise-owl.com
  • HFRHighfield ResourcesWise-owl.com
  • MYRMyerKOSEC
  • EPWERM PowerKOSEC

Central Banks Rates

  • RBA1.50%
  • FED0.50%
  • BOE0.25%
  • BOC0.50%
  • RBNZ2.00%
  • ECB0.00%
  • SNB-0.75%
  • BOJ-0.10%

Upcoming dividends

  • ASX Code
  • Company, Div., Franking
  • Ex-Div.

Eight brokers like these stocks

  • ASX Code
  • Company Name
  • Consensus Target

Upcoming Floats

  • ASX Code
  • Company Name
  • Float Date

PLEASE SUPPORT OUR SPONSORS, AUSTRALIA'S LEADING BROKERS:



© Copyright The Compare Group Pty Ltd. All rights reserved.