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18 Share Tips - 13 November 2017

18 Share Tips - 13 November 2017

By Anthony Black 13.11.2017



Ben Faulkner, Sanlam Private Wealth 

BUY RECOMMENDATIONS

Fortescue Metals Group (FMG)

Chart: Share price over the year


A weaker iron ore price since June has resulted in a softer share price for this iron ore producer. But, in my view, the iron ore price has bottomed and so has FMG in the short term. A share price below $5 represents a good entry opportunity for a stock that could trade back to $6 and possibly higher. The shares were trading at $4.89 on November 8.   

Western Areas (WSA)

Chart: Share price over the year

A reliable low cost, pure play nickel producer with operations in Western Australia. The nickel price recently broke through its 12 month high. The nickel price should consolidate before moving higher in response to sustained demand. Our price target is above $5. The shares were trading at $3.28 on November 8. 

HOLD RECOMMENDATIONS

Oil Search (OSH)

Chart: Share price over the year

A low cost, long term oil and gas producer. The recent rally in oil prices will flow to the OSH bottom line and we see upside from here. The shares were trading at $7.51 on November 8. We retain a long term hold on the stock.

Key Petroleum (KEY)

Chart: Share price over the year

Its portfolio includes onshore oil and gas assets in the Perth and Cooper basins. KEY recently raised money at a cent a share. Key has a busy 12 months of farm-ins and farm-outs of highly prospective exploration assets. We continue to hold a position in Key for speculative oil and gas exposure in both basins and we see upside from current prices. Sanlam and staff of Sanlam own Key shares. The shares were trading at less than a cent on November 8. 

SELL RECOMMENDATIONS

Costa Group Holdings (CGC)

Chart: Share price over the year

The share price of this fruit and vegetable grower has enjoyed a stellar run to all time highs since listing in July 2015. CGC looks expensive on many metrics. The share price has more than doubled in a year and was trading at $6.95 on November 8. Investors could consider locking in some profits at this level. 

The A2 Milk Company (A2M)

Chart: Share price over the year

A year ago, the shares were trading around $2. On November 8 this year, the shares were trading at $6.72. Fundamentally, above $7, the stock looks expensive and the chart looks susceptible to a significant pull back. We recently opened a short position in A2M.


Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

Grange Resources (GRR)

Chart: Share price over the year


This iron ore miner is a speculative trade. The shares launched higher in the past few weeks on strong volume. This tells us that a low is in place and we expect to see a swift move towards the mid 20 cents region. Stop losses should be placed below 15 cents. The shares closed at 18 cents on November 8.

Origin Energy (ORG)

Chart: Share price over the year


Between June and October, ORG traded sideways in a symmetrical triangle. It’s now broken out of that, implying higher levels from here. We see some resistance near $9, but above $10 can be achieved in the next six months. Origin closed at $8.35 on November 8.

HOLD RECOMMENDATIONS

Woodside Petroleum (WPL)

Chart: Share price over the year


We bought WPL below $30. The recent breakout suggests it will trade above $33. It should then consolidate for several weeks before it’s ready to push past the 2017 high of $33.97 on April 11.

Santos (STO)

Chart: Share price over the year


In September, we recommended this energy company as a buy when it was below $4. STO still has momentum and we expect it to trade near $5 before hitting some resistance. The shares closed at $4.78 on November 8.

SELL RECOMMENDATIONS

Virtus Health (VRT)

Chart: Share price over the year
 

Price action is looking negative as the share price converges, resembling that of a symmetrical triangle. We expect the share price of this fertility treatment provider to break to the downside, which could leave the stock re-testing the 2015 low near $4.50. The shares finished at $5.27 on November 8.

Sonic Healthcare (SHL)

Chart: Share price over the year


The shares were priced $24.22 on June 30. The stock had fallen to $20.74 by October 4. The shares closed at $21.75 on November 8. The price of this pathology/laboratory company either rises from here, or, in our view, resumes the downward slide towards $17. 


Harrison Watt, Shaw and Partners

BUY RECOMMENDATIONS


Nanosonics (NAN)
Chart: Share price over the year

Specialises in preventing infection. It has a proven product in a growth industry. This cash flow positive company is expanding its offering, while technically looking to move higher from here. The shares have been moving up since August to trade at $2.93 on November 10. Its 12 month high is $3.44.

Genworth Mortgage Insurance Australia (GMA) 

Chart: Share price over the year

Claims are trending lower and the buyback made short work of resistance at $3 to push higher. GMA is a good play on low bad and doubtful debts in the current interest rate environment. The shares were trading at $3.06 on November 10.

HOLD RECOMMENDATIONS

Janus Henderson Group PLC (JHG)

Chart: Share price over the year 

This European investment manager looks almost fully priced and any miss from here should be punished. I’m a holder for currency tailwinds and cost synergies, but it isn't time to top up given the recent share price rise.

iSentia Group (ISD)  

Chart: Share price over the year

Downgrades in guidance have left value in the share price of this media monitoring and content company after falling about 70 per cent in the past year. In my view, it isn’t time to sell as its found support around current levels. The shares were trading at $1.06 on November 10.

SELL RECOMMENDATIONS

Seek (SEK) 

Chart: Share price over the year

The online jobs classifieds provider has performed well on Asian expansion and an improved balance sheet. But, in my view, it’s time to consider taking profits as job creation peaks in Australia. The stock is looking expensive. The shares were trading at $19.02 on November 10.

Nib Holdings (NHF)  

Chart: Share price over the year

This private health insurer delivered a strong full year result, with net profit after tax up 30.9 per cent to $120.2 million. The company’s share price has risen more than $1 in just over a month, so investors may consider taking a profit. In our view, uncertainty is likely to emerge from the company’s planned expansion to China. The shares were trading at $6.83 on November 10.


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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Broker buys

  • ASX Code
  • Company
  • Broker
  • FMGFortescueSanlam Private Wealth
  • WSAWestern AreasSanlam Private Wealth
  • GRRGrange ResourcesFairmont Equities
  • ORGOrigin EnergyFairmont Equities
  • NANNanosonicsShaw and Partners
  • GMAGenworthShaw and Partners

Broker sells

  • ASX Code
  • Company
  • Broker
  • CGCCosta GroupSanlam Private Wealth
  • A2MA2 MilkSanlam Private Wealth
  • VRTVirtus HealthFairmont Equities
  • SHLSonic HealthcareFairmont Equities
  • SEKSeekShaw and Partners
  • NHFNib HoldingsShaw and Partners

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