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Wednesday 18

October, 2017 4:02 AM



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18 Share Tips - 18 September 2017

18 Share Tips - 18 September 2017

By Anthony Black 18.09.2017



Michael Gable, Fairmont Equities

 

BUY RECOMMENDATIONS

 

Galaxy Resources (GXY)

Chart: Share price over the year

A few weeks ago, this lithium focused resources company finally broke this year’s downtrend. We now expect GXY to rally higher. Despite some short term resistance near $2.50, GXY should re-test its January 2017 high near $3.50 as it finally resumes the longer term uptrend. The shares were trading at $2.62 on September 14.

 

Santos (STO)

Chart: Share price over the year
 

This energy giant finally broke a downtrend a few weeks ago on high volume. I expect STO to rally higher. In terms of a target, it’s likely to make a move of equal size to the rally from early 2016. That is, we could see it trade towards $5.50. Traders should look to exit if the stock moves back below the downtrend line. The shares were trading at $3.955 on September 14. 

 

HOLD RECOMMENDATIONS

 

Alumina (AWC)

Chart: Share price over the year
 

AWC spent the last year forming a large ascending triangle, but we have now seen a clear break above this pattern. This means that AWC should continue to move higher. There will be some minor resistance near $2.30, but we would be targeting levels above $2.60. We would take a negative view if AWC trades below $2. The shares were trading at $2.185 on September 14. 

 

Westfield Corporation (WFD)

Chart: Share price over the year
 

It now looks like the stock is reversing a year long downtrend. We’ve seen a couple of bullish candles appear on the weekly chart, with volume also picking up. We expect the shopping centre giant to trade higher from here. We have an initial target of about $8.75. The stock was trading at $7.725 on September 14.

 

SELL RECOMMENDATIONS

 

Macquarie Group (MQG)

Chart: Share price over the year
 

We were negative on MQG a few weeks ago and recent price action further confirms our view. It’s been breaking down on high volume and despite any short term bounces in future, we see it retreating towards the low $70 levels. The shares were trading at $88.32 on September 14.

 

DWS Limited (DWS)

Chart: Share price over the year
 

The bears have finally taken control. The stock has gone on to make a head and shoulders formation, a sign of a top. This implies the IT solutions provider could fall to about $1.10 in the next few months. The shares were trading at $1.40 on September 14.

 


Simon Herrmann, wise-owl.com

 

BUY RECOMMENDATIONS

 

Monadelphous Group (MND)

Chart: Share price over the year
 

This engineering group was recently trading near three year highs despite a soft full year result. Revenue was down 7.3 per cent to $1.264 billion and net profit after tax declined 14.1 per cent to $57.6 million. Conditions in the mining and energy sectors have stabilised after a cyclical contraction. We remain attracted to the company’s turnaround capacity and retain our buy advice.

 

Crowd Mobile (CM8)

Chart: Share price over the year
 

Supported by a new institutional investor and stronger balance sheet, Crowd Mobile has met our fiscal year 2017 forecasts. With June its strongest quarter, the company has momentum to deliver further growth in fiscal year 2018. Initiatives since acquiring mobile payments provider Track Holdings are yet to flow through to the financials. Utilising various valuation methodologies, the average target price for this software company is 30 cents based on conservative forecasts. The shares were trading at 18.5 cents on September 13.

 

HOLD RECOMMENDATIONS

 

Trade Me Group (TME)

Chart: Share price over the year
 

New Zealand’s largest online market place operator has a strong track record and management has flagged continuing growth for the year ahead, albeit at a slower pace. Recent share price weakness stems from concerns about stiffer competition. Amazon is set to launch in Australia this year, but Trade Me has successfully staved off another US giant ebay for years.

 

Platinum Asset Management (PTM)

Chart: Share price over the year
 

This hedge fund manager received a warm reception to its full year results given fund flows had stabilised. Its contrarian positioning is also attracting attention. The second half of the year witnessed a major turnaround in fund flow momentum and the company has the potential to return to strong growth.

 

SELL RECOMMENDATIONS

 

Peninsular Energy (PEN)

Chart: Share price over the year
 

Despite the company’s attractive production profile and strong capital structure, uranium companies have failed to perform. That’s a bearish sign. Uranium prices have continued to soften despite supply cuts by major producer Kazatomprom. While demand for uranium is projected to increase in coming years – particularly from China – industry risks remain elevated. We downgrade from a hold to sell.

 

Sienna Cancer Diagnostics (SDX)

Chart: Share price over the year
 

An Australian biotechnology company focusing on cancer diagnostic technology. While early revenues, patents and existing channel partnerships are attractive qualities, risks remain. There’s no guarantee its intellectual property can be commercialised or, in future, raise more funding if needed. The shares closed at 13 cents on September 13. 

 


Jonathon Howe, Red Leaf Securities

 

BUY RECOMMENDATIONS

 

Oliver’s Real Food (OLI)

Chart: Share price over the year
 

Owns and operates more than 20 healthy fast food stores along Australia’s east coast. The company aims to ramp up store openings to almost 50 by 2019. Soon after listing in June, the company announced its 2017 loss would be more than anticipated in its prospectus due to individual events. The company’s objective is to be profitable in 2018. I own shares in OLI.

 

McGrath (MEA)

Chart: Share price over the year
 

We believe the property market is starting to show signs of a slowdown in capital growth. As a result, we believe listings will slowly start increasing as property investors look to reduce exposure in a flat market. McGrath is well equipped to handle more listings and is a key player in the real estate market with about a 3 per cent market share. I own shares in MEA.

 

HOLD RECOMMENDATIONS

 

Commonwealth Bank of Australia (CBA)

Chart: Share price over the year
 

The stock has been punished on allegations it breached money laundering laws. But it recently delivered a bumper full year profit of  $9.88 billion and a higher than expected final dividend of $2.30 a share. In our view, this is the best bank to own and we have been accumulating at lower levels.

 

 

Telstra (TLS)

Chart: Share price over the year
 

Although the dividend cut was untimely, it means Telstra now has a bigger war chest for acquisitions going forward. Once 5G wireless becomes available, I expect to see a big re-rating not only in Telstra, but across the telco sector.

 

SELL RECOMMENDATIONS 

 

Myer Holdings (MYR)

Chart: Share price over the year
 

Sales for the year to July 29 were down 1.4 per cent to $3.201 billion. Net profit after tax, post implementation costs and significant items, was down 80 per cent to $11.9 million. We believe it could get worse before it gets better. Look elsewhere for better investments.

 

Northern Star Resources (NST)

Chart: Share price over the year
 

This has been one of the better performing gold stocks across the sector. We’re looking at reducing client exposure at these levels and taking profits. The shares were priced at $2.99 on December 19, 2016. The shares were trading at $5.26 on September 13, 2017. 

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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