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18 Share Tips - 16 April 2018

18 Share Tips - 16 April 2018

By Anthony Black 16.04.2018



Harrison Watt, Shaw and Partners

BUY RECOMMENDATIONS
 
Orocobre (ORE) 
 
Chart: Share price over the year

We believe value has returned to this lithium miner after several months of relative underperformance compared to its peers. Despite a recent disappointing production update, forward looking statements were positive and successful execution should result in an improving share price going forward. 

P2P Transport (P2P)
 
Chart: Share price over the year

The taxi and rideshare vehicle provider has been subdued since listing in December last year. However, company updates show it meeting and beating prospectus forecasts in relation to vehicle acquisitions. It should generate more revenue from a recently launched advertising platform.
 
HOLD RECOMMENDATIONS

Shaver Shop Group (SSG) 
 
Chart: Share price over the year

The personal grooming retailer recently announced the addition of ghd (good hair day) beauty products to its offering from late May as it continues the push into the female market. Although it seemingly doubles the target market, Shaver Shop has previously failed to drive meaningful growth in the female market. Although there is upside potential, previous experience leaves me cautious.
 
Gateway Lifestyle Group (GTY)
 
Chart: Share price over the year

Offers designer homes in a community environment. GTY is searching for growth through acquisitions. In our view, this carries heightened risk in an environment of rising interest rates. However, recent purchases in South Australia seem positive.  
 
SELL RECOMMENDATIONS

Syrah Resources (SYR) 
Chart: Share price over the year

Construction of the company’s Balama graphite project in Mozambique is essentially complete. I view high expectations built into the project as elevating risk. If expectations aren’t met, the share price is likely to suffer. The shares were priced at $4.83 on January 5. The shares were trading at $3.11 on April 12. I am happy to sit on the sidelines.

WiseTech Global (WTC)  
Chart: Share price over the year

This software developer is in a downtrend. The shares were priced at $16.27 on February 2. The shares were trading at $9.57 on April 12. In our view, the stock is still too expensive as it was recently trading on an uncomfortably high price/earnings multiple.    


Michael Heffernan, PhillipCapital

BUY RECOMMENDATIONS

Macquarie Group (MQG)
Chart: Share price over the year

A strong sharemarket performer in the past 12 months. MQG is internationally diverse, which is positive. Exposure to what I expect will be a buoyant sharemarket going forward should lift revenue and profits.
 
CSL (CSL)
Chart: Share price over the year

This world class blood plasma business, with its rivers of gold royalty streams, recently delivered an excellent half year report, which drove the share price higher. Its prospects are bright and I expect CSL to benefit from a stronger US dollar as the US economy continues to improve.
 
HOLD RECOMMENDATIONS

Link Administration Holdings (LNK)
Chart: Share price over the year

A major share registry business that consistently delivers sound results in challenging circumstances. Despite recent share price weakness, company fundamentals are attractive. Its UK purchase of Capita Asset Services looks promising.
 
The a2 Milk Company (A2M)
Chart: Share price over the year

The shares have soared in the past year to close at $11.99 on April 12. Its recent half year report exceeded expectations. But its high price/earnings ratio leaves little room for error should future performance disappoint the market.
 
SELL RECOMMENDATIONS

AGL Energy (AGL)

Chart: Share price over the year

The share price has fallen from $24.59 on January 10 to close at $20.92 on April 12. The future of its Liddell power plant, set for closure by the company in 2022, has become a political energy issue and, in my view, most unhelpful. Better off elsewhere until a clearer outlook emerges.
 
Harvey Norman (HVN) 
Chart: Share price over the year
 
The shares were priced at $4.58 on February 27. The shares closed at $3.39 on April 12. Competition in the discretionary retail sector is fierce at the best of times and I expect Amazon’s arrival will have an impact on Harvey Norman’s market share some time in the future.


Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

Ramsay Health Care (RHC)
Chart: Share price over the year

The private hospital operator is retesting 2017 lows in the form of a falling wedge. This often signifies a reversal of a downtrend. With the price/earnings ratio retreating to more attractive levels, we expect buying to come in now and lift RHC back towards $70. The shares were trading at $61.84 on April 12.

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

The banks have been falling for some time and we’ve been waiting for the big four to finally hit our downside targets. They’re now finding support at the right levels and therefore represent a buying opportunity. WBC looks particularly strong on the chart. 

HOLD RECOMMENDATIONS

BHP Billiton (BHP)
Chart: Share price over the year

We had previously been looking at levels close to $28 to buy this global miner. Now that we’ve done that, we’re still comfortable with our target in the mid $30 region. The shares were trading at $29.64 on April 12. 

Xero (XRO)
Chart: Share price over the year

This accounting software company has been a great trading stock for us in the past year. Despite it recently making a new high for the year, we still rate it as a hold. The charts indicate the shares are on course to rally towards $40. The shares were trading at $35.02 on April 12.

SELL RECOMMENDATIONS

Afterpay Touch Group (APT)
Chart: Share price over the year

We informed our newsletter subscribers that we believed this technology driven payments company was overvalued at near $7 and would fall towards $5.50. The shares were priced at $7.80 on March 13. By March 19, the shares had fallen to $6.88. On April 12, the shares were trading at $5.32. Price action remains bearish for APT and we have lowered our targets further to $4.80. In our view, any rallies in APT present an opportunity to sell. 

Orocobre (ORE)
Chart: Share price over the year

Price action remains weak for this lithium miner with volume increasing on the way down. It may bounce towards $5.50 in the short term. But from a technical perspective, we can see low $4 levels in the next few months. The shares were trading at $4.76 on April 12.

Please note that Orocobre is recommended as a buy and a sell this week as brokers take different views on its outlook.


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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