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Tuesday 19

September, 2017 9:36 PM



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18 Share Tips - 28 August 2017

18 Share Tips - 28 August 2017

By Anthony Black 28.08.2017



Michael Gable, Fairmont Equities

 

BUY RECOMMENDATIONS

 

Orora (ORA)

Chart: Share price over the year

The packaging giant has been trending higher since listing in 2013. After peaking a year ago, it then started to trade sideways to consolidate the move. Investors supported its recent report and the stock jumped almost 10 per cent on the day. ORA has broken out of consolidation, which means it should resume the uptrend and trade to new highs. ORA will also benefit further if the Australian dollar starts to fall again.

 

Bapcor (BAP)

Chart: Share price over the year

We sold this automotive aftermarket parts provider towards the end of last year near $6. The share price began trending lower, falling towards $5 in June. Up until July 30, the chart was looking weak as it continued to make lower highs. Then it broke that downtrend and the chart has turned from negative to positive. We now expect it to trend higher, eventually heading above $6.

 

HOLD RECOMMENDATIONS

 

St Barbara (SBM)

Chart: Share price over the year

This gold producer recently broke above resistance given support for the gold price. A close above $3 would be a bullish sign. If it can break $3, then we would expect SBM to rally towards resistance near $3.30. If it can’t, then SBM could fall back towards support near $2.60. The shares finished at $2.89 on August 24.

 

Janus Henderson Group (JHG)

Chart: Share price over the year

This European investment manager had a good run during this year’s first half, initially finding a peak at the beginning of June. It then started to drift back in a flag formation. A few weeks ago, we saw JHG break above this flag, making a marginally new high before easing back. The breakout was on strong volume, which is a positive sign. Technically, JHG looks good and should resume the uptrend. We can see some upside resistance near $50. The shares closed at $43.90 on August 24.

 

SELL RECOMMENDATIONS

 

Macquarie Group (MQG)

Chart: Share price over the year

Since peaking after its results in early May, MQG was heavily sold down. This suggests all the upside was factored in and the stock was too expensive. We’re now starting to see lower highs and lower lows. Price action suggests a move towards a head and shoulders topping formation. If that occurs, we could see the stock revisit its pre-Trump election levels in the low $70’s. The shares closed at $87.63 on August 24.

 

Insurance Australia Group (IAG)

Chart: Share price over the year

A negative candle formed on the weekly candlestick chart a few weeks ago. IAG has been struggling to overcome the midpoint of that candle. This sort of price rejection isn’t a good sign and I see IAG heading below $6 support levels. The stock finished at $6.33 on August 24. 

 


Michael Heffernan, PhillipCapital

 

BUY RECOMMENDATIONS

 

Carsales.com (CAR)

Chart: Share price over the year

A stock with a first mover advantage in a market just ripe for a well managed business. It has sound fundamentals and a recent fully franked dividend yield of around 3 per cent. Expected profit growth is attractive. It delivered a good full year result, with revenue up 8 per cent to $372.1 million. 

 

Tabcorp (TAH) 

Chart: Share price over the year

This one is for the punters. The Australian Competition and Consumer Commission has applied to the Federal Court for a judicial review of the Australian Competition Tribunal’s decision to authorise Tabcorp acquiring Tatts Group. This has created some near term uncertainty. Nevertheless, I believe the $11 billion merger will ultimately proceed, and the merged entity should reap valuable synergies. It looks an attractive proposition. But potential buyers should also be aware the merger may not proceed.

 

HOLD RECOMMENDATIONS

 

JB Hi-Fi (JBH)  

Chart: Share price over the year

The consumer electronics giant has benefited from the demise of Dick Smith and from buying The Good Guys, but the pending arrival of Amazon is a threat. Nevertheless, its share price has probably already factored this in and its recent report was strong.

 

Corporate Travel Management (CTD)

Chart: Share price over the year

This Australian and international travel information provider delivered an impressive full year report and it expects double digit earnings growth going forward. Travel is an increasingly important sector of the economy and this company has been a winner.

 

 

SELL RECOMMENDATIONS

 

James Hardie Industries PLC (JHX)

Chart: Share price over the year

In my view, its recent quarterly report disappointed even the most fervent supporters of this building products company. Also, its outlook statement didn’t inspire me. While its recent sharp share price fall may tempt some investors, I believe the best option is to wait for more updates about how it’s tracking before considering whether to buy.

 

AMP (AMP)

Chart: Share price over the year

This financial services company has been a perennial disappointer since listing in 1998. Moreover, its recent report has done little to inspire confidence of an imminent turnaround, in my view. There are more attractive financial stocks than AMP.

 


Michael McCarthy, CMC Markets

 

BUY RECOMMENDATIONS

 

oOh! Media (OML)  

Chart: Share price over the year

This outdoor advertising company’s annual profit grew by 18.3 per cent to $7.1 million. The profit growth compared favourably to a sector expanding by 8.6 per cent in an industry where overall spending decreased by 1.6 per cent in fiscal year 2017. It’s an impressive effort and OML is a potentially attractive investment ahead of any upswing in the advertising cycle.

 

BlueScope Steel (BSL)  

Chart: Share price over the year

The steelmaker delivered a net profit after tax increase of 102 per cent to $715.9 million for fiscal year 2017. But the stock was sold down on cost negatives and a conservative outlook statement. The commentary may have been aimed more at Canberra than investors, and I think the sell down is an overreaction.

 

 

HOLD RECOMMENDATIONS

 

Bendigo and Adelaide Bank (BEN)  

Chart: Share price over the year

Posted a strong full year result, and there’s more to come with margin expansion on the back of increased mortgage rates. I like the growth profile, but think the share price has run hard enough.

 

CSL  (CSL)

Chart: Share price over the year

This blood products company continues to grow profits at above market rates. Some disappointment exists that its full year result didn’t hit CSL’s normally higher standard, but it remains a great Australian success story.

 

 

SELL RECOMMENDATIONS

 

Telstra (TLS) 

Chart: Share price over the year

I believe a lack of a strategy beyond the NBN is a concern for shareholders. In my view, the share price plunge doesn’t put TLS in value territory, and I remain worried about a potential dividend yield trap for investors.

 

Woolworths (WOW) 

Chart: Share price over the year

The good news is WOW beat rival Coles in supermarket growth. But the bad news is better turnover came at a cost of lower margins, meaning profits fell. It’s good news the Masters hardware chain has gone. The bad news is Big W write offs increased tenfold. On balance, it was a good report. But it doesn’t justify a $27 share price. The shares closed at $26.94 on August 23.

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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