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Friday 21

September, 2018 6:59 AM



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18 Share Tips - 26 February 2018

18 Share Tips - 26 February 2018

By Anthony Black 26.02.2018



Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

St Barbara (SBM)
Chart: Share price over the year

The gold producer had a great run at the end of last year and then spent several weeks consolidating that move. Also, this consolidation has generally been above the 2016 high, which is a positive sign. It appears SBM will continue its uptrend soon. Technical analysis suggests the stock could then go on to threaten its all time high near $5. The shares were trading at $3.815 on February 21.

Aristocrat Leisure (ALL)
Chart: Share price over the year

Recent price action looks bullish and the shares are poised to break through resistance. This gaming company also looks most attractive from a fundamental perspective. A move through $25 should draw in further buying and that means ALL could hit the high $20 levels in time. The shares were trading at $24.73 on February 21.

HOLD RECOMMENDATIONS

National Australia Bank (NAB)
Chart: Share price over the year

The $28 mark brought strong investor support for the bank. NAB now looks as though it will trade higher. First line of resistance is between $30 and $31. The shares were trading at $29.37on February 21. 

Xero (XRO)
Chart: Share price over the year

Several weeks ago, we saw this software accounting company break the short term downtrend. The push past the 2017 high was on good volume, so I’m more confident it will move towards $40. Short term weakness here is a buying opportunity. The shares were trading at $31.61 on February 21.

SELL RECOMMENDATIONS

Amaysim Australia (AYS)
Chart: Share price over the year

The telecommunications company tried to break above resistance a few weeks ago, but was heavily sold down from $2.25 to finish that week at $1.705. It recently broke below support and, as a result, I expect AYS to keep falling. Short term, we can see a bounce to test the old support line near $1.65, but ultimately, in our view, it’s likely to head towards a new low below $1.30. The shares were trading at $1.512 on February 21. 

Wesfarmers (WES)
Chart: Share price over the year

We have been negative on WES for a few years now. If the share price couldn’t stay up when Coles was dominating Woolworths, I wouldn’t expect it to go up now given competition is only getting fiercer. The Bunnings expansion into the UK has been disappointing. The shares were trading at $41.76 on February 21.


Simon Herrmann, wise-owl.com

BUY RECOMMENDATIONS

Coca-Cola Amatil (CCL) 
Chart: Share price over the year

The beverage maker posted full year results broadly in line with our expectations. The company will invest heavily to drive growth in the Australian beverage division (which accounts for more than 60 per cent of earnings) in an attempt to halt the downward trajectory. We see potential for a turnaround and recognise management’s ability to deliver shareholder value. 

Southern Cross Electrical Engineering (SXE) 
Chart: Share price over the year

The company has a strongly growing order book of more than $480 million, which is about 2.4 times fiscal year 2017 revenue. The strong order book is a result of organic growth initiatives and the acquisition of Heyday. As business activity improves, the company is on track to increase revenues in fiscal year 2018. Southern Cross provides electrical, communication and maintenance services to a variety of sectors, including resources, defence, transport, renewable energy and utilities.

HOLD RECOMMENDATIONS

Monadelphous Group (MND)
Chart: Share price over the year

We remain attracted to this engineering services company’s capital growth and income potential. MND was one of the best performing ASX stocks in 2017 as it rode the recovery in the mining industry, while diversifying into other areas, such as renewable energy. An interim dividend of 30 cents is a bonus. 

Frontier Diamonds (FDX)
Chart: Share price over the year

This South African diamond miner is focused on unlocking value at its flagship assets – the two operating mines Sedibeng and Star. While these operations offer a solid base for the company’s earnings, we see upside potential in the extension of known fissures at the Bellsbank Pipe exploration project and surrounding mines. Also, introducing   more efficient mining techniques is expected to yield a better return on investment. 

SELL RECOMMENDATIONS

QBE Insurance (QBE)
Chart: Share price over the year

In my view, this company has been a disappointing performer for too long. The company is conducting a strategic review and may introduce steps to simplify the business, but it will take time to turn it around. For now, our advice is to avoid, but we’ll keep an eye on management initiatives. 

Village Roadshow (VRL)
Chart: Share price over the year

Focuses on theme parks and cinema exhibition. Results for the first half of fiscal year 2018 were substantially below last year’s prior corresponding period. At this point, we believe challenging trading conditions are likely to continue. 


Tony Locantro, Alto Capital

BUY RECOMMENDATIONS

Nanollose (NC6)
Chart: Share price over the year

After a strong run to 38 cents after listing in October last year, NC6 shares have struggled. NC6 is working towards creating rayon fibre from alcohol waste and coconut sugar for the textile industry. The key will be to create scale through feedstock and attract partners in the clothing and textile industry. A speculative buy. The shares closed at 12 cents on February 22.

Invitrocue (IVQ)
Chart: Share price over the year

An emerging personalised oncology company. Technology enables patient derived cancer cells (organoids) to be cultured in laboratories for testing against a panel of drugs to support clinical decision making for individual patients. The personalised oncology sector has the potential to generate significant investor interest based on potential cost savings, as a significant number of cancer drugs are ineffective. The shares closed at 10 cents on February 22.

HOLD RECOMMENDATIONS

Red Metal (RDM)
Chart: Share price over the year

We expect more exploration activity in coming quarters via joint ventures with OZ Minerals and MMG. Market capitalisation remains underpinned by the Maronan lead-silver, copper-gold resource. In my view, RDM has provided shareholders with exposure to high risk/high reward projects and this will continue in 2018.

Great Boulder Resources (GBR)
Chart: Share price over the year

The Mt Venn discovery continues to achieve strong results. GBR is now working on the metallurgy of the copper-nickel-cobalt resource, aiming for copper sulphide concentrate plus cobalt and nickel sulphate production. The share price touched 71 cents post discovery and is now in a hold and accumulate zone. The shares closed at 23 cents on February 22.

SELL RECOMMENDATIONS

Kidman Resources (KDR)
Chart: Share price over the year

Recent market volatility has shown what selling pressure can do to the hot lithium sector, with some stocks failing to mount a sustained recovery. KDR’s share price has recovered strongly. But it’s now at a level where profit taking could be a prudent strategy. 

Westpac Bank (WBC)
Chart: Share price over the year

Bank stocks have struggled for a while and the CBA was well below $80 on February 22. In my view, WBC’s interest only loan exposure is a concern with further cracks appearing in the Sydney and Melbourne property markets. At current levels, investors can consider taking some money off the table.  There will be an opportunity at some stage where the Australian banking sector becomes an attractive investment.

 >> BACK TO THE NEWSLETTER: Click here to read other articles from this week's newsletter


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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WHAT’S ON THIS WEEK

week 21 September 2018
    • 17
    • N/A No items listed | 9:00 AM
    • 18
    • ABS Weekly consumer sentiment | 9:00 AM
    • 19
    • RBA Speech by Reserve Bank Assistant Governor | 9:00 AM
    • 20
    • WBC Leading Economic Index data | 9:00 AM
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