The Bull

Sunday 22

July, 201810:48 PM



TheBull PREMIUM

  • 18
  • Share
  • Tips

18 Share Tips - 19 March 2018

18 Share Tips - 19 March 2018

By Anthony Black 19.03.2018



Janine Cox, Wealth Within

BUY RECOMMENDATIONS
 
FlexiGroup (FXL)
Chart: Share price over the year

A multi year decline in FXL’s share price has only recently showed signs of abating. If it trades below $1.60, there’s potential for a further short fall to $1.30. But if FXL trades above $1.91, it’s likely to be turning around to create a short term buying opportunity. Given the stock’s lower liquidity, we consider it a higher risk proposition. Shares in this diversified financial services firm were trading at $1.725 on March 15.
 
Independence Group NL (IGO)
Chart: Share price over the year
 
IGO is a smaller stock in the materials sector. Following a rise through significant resistance around $5 and $5.20 in January, IGO recently pulled back, so be patient. A rise above $5.20 would indicate the stock is rising once again to generate good gains. Solid buying rules are important. Shares in the diversified miner were trading at $4.72 on March 15.
 
HOLD RECOMMENDATIONS
 
Macquarie Group (MQG)
Chart: Share price over the year
 
MQG has been incredibly bullish over recent years, as the big four banks fell in value. Currently, MQG is trading in a strong, long term uptrend, with the potential to trade above $110. The wise will stay with the trade until it provides a solid exit below the angle of the trend. The stock was recently trading on a reasonable dividend yield at 4.6 per cent. The stock was trading at $105.33 on March 15. 
 
Beach Energy (BPT) 
Chart: Share price over the year
 
Not for the faint hearted as price swings between 15 per cent and 20 per cent are common. Upside potential exists above $1.50, but it currently remains suspended in a sideways holding pattern. If BPT trades below a trailing stop loss at $1.15, we expect it to fall further. The shares were trading at $1.247 on March 15.
 
SELL RECOMMENDATIONS
 
BT Investment Management (BTT) 
Chart: Share price over the year
 
Between 2013 and 2015, BTT did extremely well. From around July 2017, BTT has largely traded sideways. A fall below $10.24 would indicate a strong reason to exit. The shares were trading at $10.71 on March 15.
 
Commonwealth Bank of Australia (CBA)
 
Chart: Share price over the year
 
Typically, banks tend to be more defensive stocks to hold in a portfolio. In recent years, the major banks have languished due to stringent Basel requirements, legal action and now a Royal Commission. If the CBA falls below $74.90, the risk of a further fall to around $67.50 will increase. The shares were trading at $75.92 on March 15.

Peter Moran, Wilsons

BUY RECOMMENDATIONS

Ruralco Holdings (RHL)
Chart: Share price over the year

Growth rates across the rural services sector are generally low. But we see sustained growth for Ruralco, as the company continues to make bolt-on acquisitions in its water services and rural supplies businesses. We also expect continuing cost cutting to lift profits over future years. The company still has cyclical exposure, but we view the current share price providing a good opportunity to buy.
 
Eclipx Group (ECX)
Chart: Share price over the year

This vehicle fleet leasing and salary packaging company confirmed it was on track to deliver solid growth this year.  Importantly, the integration of Grays eCommerce is going well and we believe Eclipx can continue reducing costs. Recent price weakness provides a good buying opportunity.
 
HOLD RECOMMENDATIONS
 
Spark Infrastructure Group (SKI)
Chart: Share price over the year

Although higher costs led to a marginally weaker than expected profit, this specialist infrastructure fund has retained guidance of 5 per cent distribution growth for 2018. As utility earnings are, in the main, regulated until 2020, we don’t see any major risk to distribution and retain a hold for yield.
 
Select Harvests (SHV)
Chart: Share price over the year

We’re encouraged by the recent recovery in almond prices, largely driven by continuing supply issues in California. However, we’re still concerned about the impact of frost on the volume of this year’s crop. Also of concern is the company’s packaged food division operates in a most competitive environment.        
 
SELL RECOMMENDATIONS

Retail Food Group (RFG)
Chart: Share price over the year

RFG recently confirmed a disappointing first half result, with profit slumping across most of its businesses. RFG will close stores and try to cut costs. RFG has been able to reset debt covenants following negotiations with its lenders. However, with the core operations likely to remain under pressure, we believe a capital raising may be required. 
 
Domino’s Pizza Enterprises (DMP)
Chart: Share price over the year

For a company priced for strong growth, its results are disappointing. The company is buying back its own shares on market, which, arguably, isn’t the best use of capital. In our view, the company should reduce franchisor fees to ensure the long term sustainability of outlets. We believe DMP’s full year growth forecasts will be difficult to achieve.

Michael Wayne, Medallion Financial Group

BUY RECOMMENDATIONS

IDP Education (IEL)
Chart: Share price over the year

A world leader in international student placement services. The International English Language Testing System (IELTS) business delivered 28 per cent growth in the 2018 first half compared to the prior corresponding period, while placement services delivered 46 per cent growth. Strong volume growth in international markets, such as India and Japan, helped drive the result. The company’s understated pricing power supported better than expected margin growth.

Shriro Holdings (SHM)
Chart: Share price over the year

Distributes kitchen appliances and consumer products in Australia and New Zealand. The domestic operations are mature. However, positive signs are emerging from the company’s expansion to the US. The Everdure barbecue brand is targeting a 1 per cent market share in the US and German markets, which has the potential to significantly increase earnings. SHM is priced as a mature business, recently trading on only 9 times earnings and paying an 8 per cent fully franked dividend yield. In our view, investors are essentially getting a free option on the company’s expansion to the US and German barbecue markets. 

HOLD RECOMMENDATIONS

Challenger (CGF)
Chart: Share price over the year

With a market share of 68 per cent, Challenger is well positioned to capitalise on demand for retail annuities. As we enter a sustained period of rising interest rates, it’s important to note that Challenger holds most of its fixed income investments until maturity, thereby avoiding exposure to interest rate risk. The share price initially retreated to the half year report due to a lower than expected capital ratio. We see this as a transitionary issue and put it down to the timing of investment decisions that were brought forward.

Orora (ORA)
Chart: Share price over the year

This packaging company’s recent results were above market expectations, with underlying EBIT rising 11 per cent to $165.3 million and underlying net profit after tax increasing 15 per cent to $105.7 million. North America managed to increase sales and margins despite cost headwinds. Although a relatively small player in a highly fragmented market, growth prospects in the US remain attractive, particularly when improving industry margins are taken into account. 

SELL RECOMMENDATIONS

Metcash (MTS)
Chart: Share price over the year

The MTS share price was recently sitting at over three year highs, yet the business still faces headwinds. MTS is up against fierce competition in the retail grocery segment. International entrants Aldi and Costco are formidable competitors to the long established supermarket giants. In our opinion, management’s cost cutting program and Mitre 10’s strong performance are unlikely to be enough to preserve margins moving forward. 

APA Group (APA)
Chart: Share price over the year

A dominant gas pipeline owner. In our opinion, APA is facing a slowing growth profile and increasing regulatory risk. Utility bills in Australia are continuing to rise even after years of increases. We believe the Federal Government is likely to introduce gas industry reforms that will lead to even higher levels of transparency and possibly impact APA’s bargaining position. Higher leverage could increasingly become a problem as interest rates and bond yields rise.

>> 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. 


FROM THE NEWSLETTER

New IPOs with Innovative Technologies Behind Them

Although OnMarket does not offer all upcoming... More

Trade war could dampen China investment in the US

The U.S. and China are currently engaged in an... More

What's driving Australian mortgage interest rates?

The RBA has not changed the target cash rate... More

An upbeat economic outlook predicted despite higher volatility

The first six months of 2018 have been choppy... More



WHAT’S ON THIS WEEK

week 27 July 2018
    • 23
    • 24
    • 25
    • 26
    • 27

TheBull.com.au

TheBull.com.au

TheBull PREMIUM article search



Markets
Index: Points Change Percent

Featured Comment

I have thought about ways to reduce portfolio volatility in recent weeks.

Why market risk is rising, and what to do about it

Broker buys

  • ASX Code
  • Company
  • Broker
  • RCLReadCloudPatersons
  • MYXMayne PharmaPatersons
  • HZRHazer GroupArgonaut
  • GRBGage RoadsArgonaut
  • IPHIPH LimitedCMC Markets
  • TPMTPG TelecomCMC Markets

Broker sells

  • ASX Code
  • Company
  • Broker
  • KGNKogan.comPatersons
  • APAAPA GroupPatersons
  • QANQantasArgonaut
  • WESWesfarmersArgonaut
  • SBMSt BarbaraCMC Markets
  • BSLBlueScope SteelCMC Markets

Central Banks Rates

  • RBA1.50%
  • FED0.50%
  • BOE0.25%
  • BOC0.50%
  • RBNZ2.00%
  • ECB0.00%
  • SNB-0.75%
  • BOJ-0.10%

Upcoming dividends

  • ASX Code
  • Company, Div., Franking
  • Ex-Div.

Eight brokers like these stocks

  • ASX Code
  • Company Name
  • Consensus Target

Upcoming Floats

  • ASX Code
  • Company Name
  • Float Date

PLEASE SUPPORT OUR SPONSORS, AUSTRALIA'S LEADING BROKERS:



© Copyright TheBull.com.au. All rights reserved.