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January, 2018 5:14 PM



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18 Share Tips - 11 December 2017

18 Share Tips - 11 December 2017

By Anthony Black 11.12.2017



Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

GUD Holdings (GUD)

Chart: Share price over the year

This consumer goods manufacturer and distributor appears to have broken out of a flag formation on the chart. This is positive and I expect GUD to resume its upward move. We’re targeting levels above $13 before re-assessing. The shares were trading at $12.21 on December 7.

Westfield Corporation (WFD)

Chart: Share price over the year

The share price broke above key resistance last month on the back of a well received third quarter update. Valuation targets are near $9, but our charting analysis suggests WFD could rally towards resistance at $9.40. Shares in the shopping centre giant were trading at $8.51 on December 7.

HOLD RECOMMENDATIONS

Orora (ORA)

Chart: Share price over the year

We have been bullish for some time and now the stock is consolidating its great run of the past few months. A flag formation is sitting on top of the September high and a push through $3.40 would indicate a resumption of the uptrend. Shares in this packaging company were trading at $3.285 on December 7. 

Woodside Petroleum (WPL)

Chart: Share price over the year

After hitting our initial targets above $33, WPL eased back to consolidate the move. Encouragingly, it has bounced strongly from the $30 level again. I expect this energy giant to push through $33 and attempt to break $34. The shares were trading at $31.42 on December 7.

SELL REDCOMMENDATIONS

Seek (SEK)

Chart: Share price over the year

The online jobs classifieds provider was sold down after its recent annual general meeting. The weekly candlestick chart shows the formation of a bearish engulfing pattern, which is a reversal signal. We’re expecting to see price levels closer to $16. The shares were trading at $18.56 on December 7.

QBE Insurance (QBE)

Chart: Share price over the year

We’ve previously warned about QBE and recent price action suggests investors should once again brace for further downside. The rally since early October has failed to overlap the June low which means we expect QBE to retreat towards $9.50. The shares were trading at $10.65 on December 7.


Tony Paterno, Ord Minnett


BUY RECOMMENDATIONS


ANZ Bank (ANZ)

Chart: Share price over the year


We remain optimistic about the bank’s medium term prospects. We see potential earnings upside to rising US interest rates and capital management initiatives. Any announcement from the Australian Prudential Regulation Authority (APRA) regarding its final risk weight settings is likely to provide a relative benefit to ANZ, as several peers have more exposure to investor loans. 


Westfield Corporation (WFD)

Chart: Share price over the year

The retail sector is rapidly changing. Landlords need to invest in their centres and remix them to stay relevant with consumers. Westfield identified these trends early and is well advanced. Asset quality and location are also critical for retaining and attracting the best tenants and growing rents. In our view, no other company is better placed in retail than Westfield. 


HOLD RECOMMENDATIONS


Super Retail Group (SUL)

Chart: Share price over the year

We expect consumers to become increasingly more careful about spending given rising household costs amid meeting mortgage repayments. We expect Amazon and other international retailers to heighten competition. Retain, as recent share price weakness suggests more consumer and Amazon risks are being priced in.

Sonic Healthcare (SHL)

Chart: Share price over the year

In our view, the operating environment across Sonic’s domestic and international businesses is subdued. Hold this pathology and diagnostic imaging company for low single digit revenue growth. 
 

SELL RECOMMENDATIONS


Tabcorp Holdings (TAH)

Chart: Share price over the year

The company is exposed to declining wagering yields from competitive pressures, such as corporate bookmakers, which were a challenge in fiscal year 2017 and likely to remain so this financial year. In our view, significant execution risks exist regarding Sun Bets and the integration of UBET. 


TPG Telecom (TPM)

Chart: Share price over the year

TPG is a large player as consolidation in the fixed telecom industry draws to a close. However, we believe the period of above average growth has finished. The potential margin headwind from NBN migration is too much of a risk to brush aside at this point. We are also cautious about the potential move into the mobile business in Singapore and potentially Australia as a fourth operator in arguably mature markets.


Robert Makdissi, Baillieu Holst

BUY RECOMMENDATIONS
 
NetComm Wireless  (NTC)

Chart: Share price over the year

We remain believers in the US broadband opportunity being expanded in scale and are optimistic about NTC picking up more fibre to the curb contracts offshore. The recent announcement of a new product, the network connection device, and securing a large order from NBN Co exhibits value emerging from its increase in research and development spending. We see minimal downside from current levels, with the stock recently trading on a 2018 price/earnings multiple of around 9 times.
 
EML Payments (EML) 

Chart: Share price over the year

This payments solutions provider has announced several material contract wins in the past few months, including in the US. We believe there will be strong growth in the US due to the slow adaptation to new technologies in the finance sector.
 
 
HOLD RECOMMENDATIONS
 
Coca-Cola Amatil (CCL)

Chart: Share price over the year

We expect the beverage giant can preserve or marginally grow cash earnings in the medium term. Coffee and alcohol products provide further growth opportunities. Cutting costs in Indonesia should result in greater operating leverage.
 
AMP  (AMP)

Chart: Share price over the year

We support AMP’s strategy and believe value will eventually be realised. With the portfolio recently de-risked, (life reinsurance deal and MySuper transition) the company, in our view, is trading around a 15 per cent discount to its listed peers. Also, the company may embark on a buyback in the second half of the year, supporting the stock valuation.
 
 
SELL RECOMMENDATIONS
 
Flight Centre Travel Group (FLT)

Chart: Share price over the year

The company is executing its transformation plan to close underperforming stores. The company’s 52 week low was $27.69 on February 23, 2017. The shares were trading at $45.13 on December 8. After a strong share price run, it may be time to take some profits.
 
ResMed (RMD)

Chart: Share price over the year

Credit goes to the company for introducing new products and achieving strong revenue growth. On September 1, 2017, the shares in this medical device maker were priced at $9.77. On December 8, the shares were trading at $11.40. We feel there’s little room for error and taking some profits may be prudent.


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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That could be an opportunity for patient value investors to buy at lower prices and gain exposure to one of the few small Australian retailers with an expanding global footprint and less exposure to the online threat.

Retailers that can survive online barrage

Broker buys

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  • FMGFortescueSanlam Private Wealth
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  • NANNanosonicsShaw and Partners
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