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18 Share Tips - 2 July 2018

18 Share Tips - 2 July 2018

By Anthony Black 02.07.2018



Philippe Bui, Medallion Financial group

BUY RECOMMENDATIONS

InvoCare (IVC)
Chart: Share price over the year

Provides funeral services in Australia, New Zealand and Singapore. The stock is down about 25 per cent since its high of  $18.15 late last year. The company closed sites to complete refurbishments as part of its ‘Protect and Grow’ strategy. Investors reacted by over selling the stock, in our view. While the share price may not bounce right away, IVC is positioning to capitalise on a growing and lucrative market over the longer term.  Shares in this market leader were trading at $13.76 on June 28. 

Speedcast International (SDA)
Chart: Share price over the year

Momentum is favouring this emerging business that provides satellite-based communication networks and services. The shares were priced at $5.09 on April 3. On June 28, the shares were trading at $6.26. SDA buys satellite capacity from operators and then resells the satellite usage and telecommunication services to more than 100 different customers primarily operating in remote locations, such as ships and offshore oil rigs. The company continues to reduce debt and is winning new global contracts in a growth industry.

HOLD RECOMMENDATIONS

Paragon Care (PGC)
Chart: Share price over the year

PGC is a leading provider of medical equipment, devices and consumables, mostly for the Australian and New Zealand healthcare markets. The company has progressively acquired 13 quality businesses in the past seven years, and all have a strong market presence with their respective offerings. This aggressive acquisition program enables Paragon to provide end-to-end solutions in an industry set to grow rapidly along with the ageing population. 

NextDC  (NXT)
Chart: Share price over the year

This data centre provider offers a range of services to corporate, government and information technology companies. Data centre businesses tend to enjoy strong operating leverage, as, once built, operating costs remain relatively fixed, while additional revenues are earned at minimal extra cost. The shares have risen from $5.46 on January 22 to trade at $7.71 on June 28.

SELL RECOMMENDATIONS

Greencross (GXL)
Chart: Share price over the year

A veterinary services giant, with more than 150 practices and more than 240 pet speciality retails stores in Australia and New Zealand. Recently, the company came under pressure after issuing a profit warning worse than market consensus, and earnings per share have dropped consecutively for the past three years. 

CSR (CSR)
Chart: Share price over the year

Makes and supplies building products in Australia and New Zealand. Higher than expected supply chain costs in the aluminium division led to a downgrade of fiscal year 2019 estimates. Given a slowdown in Australian housing construction, we believe the sector may be close to the top of its earnings cycle.

Simon Herrmann, wise-owl.com

BUY RECOMMENDATIONS
 
Regis Resources (RRL)
Chart: Share price over the year

This gold mining company is showing strength despite gold price volatility. The shares were priced at $3.89 on February 12 this year. The shares closed at $5.07 on June 27. We expect momentum to continue and we remain attracted to the fundamentals at this price. 
 
Independence Group (IGO) 
Chart: Share price over the year

Company earnings are highly leveraged to gold, nickel and cobalt markets, which are showing signs of firming. The company’s cash flow profile has improved due to the inclusion of the recently commissioned Nova mine after commercial production commenced in the 2018 first half. The stock looks like it may consolidate for a while, but offers a bright outlook. 
 
HOLD RECOMMENDATIONS
 
Cape Range (CAG)
Chart: Share price over the year

This Asia focused software company listed at 20 cents a share in November 2017. It closed at 26 cents on June 27.  It’s one of the few small capitalisation tech companies to perform strongly since listing. A tight capital structure and low cash burn provide a favourable foundation for growth. A strong funding position and strategic relationship with major shareholder iFREE enables the company to assess strategic opportunities. Interest may build and we think it’s a stock to put on the watch list. 
 
Wagners Holding Company (WGN)
Chart: Share price over the year

Half year results revealed strong momentum in cement products and transport services. Wagners delivered on its prospectus targets and was added to the All Ordinaries Index in March. The outlook appears favourable. 
 
SELL RECOMMENDATIONS
 
CommsChoice Group (CCG)
Chart: Share price over the year

Listed on the ASX on December 21, 2017 after acquiring five individual businesses. The company focuses on reselling vendor-neutral IT products and services to businesses in Australia, New Zealand and Singapore. Six months after listing, CommsChoice revised its prospectus guidance, with revenues and earnings significantly below expectations. A poor outcome for IPO investors and, in our view, integration risks remain elevated. 

Norwood Systems (NOR)
Chart: Share price over the year

This information technology company sells mobile communication and cyber security services. Norwood has serviced about 6 million customers globally, but quarterly cash receipts average around $60,000. NOR isn’t of interest to wise-owl at the moment.

Janine Cox, Wealth Within

BUY RECOMMENDATIONS
 
Sonic Healthcare (SHL)
Chart: Share price over the year
 
The healthcare sector continues to present good opportunities to profit. In June, SHL traded up strongly above resistance at around $25 to achieve a new all time high and is likely to rise from here. SHL is a solid stock with good upside potential. 
 
Resolute Mining (RSG)
Chart: Share price over the year
 
The gold miner has been trading sideways for about a year and appears poised to rise. This is a stock best suited for experienced traders. The short term trend is currently up. Although resistance exists at around $1.35, a strong close above this level would indicate the share price is likely to rise in the second half of the year. The shares closed at $1.255 on June 27.
 
HOLD RECOMMENDATIONS
 
Suncorp Group (SUN)
Chart: Share price over the year
 
This financial services company surprised on the upside in June. As the share price is well above an important level at around $14, the probability of a further rise has increased. Consideration needs to be given to a suitable trailing stop loss to manage risk. The shares closed at $14.64 on June 27.
 
Blackmores (BKL)
Chart: Share price over the year
 
The share price of this vitamins and supplements company is highly volatile, which means it isn’t suitable for novice traders. Trading BKL requires a thorough understanding of risk management and technical analysis. A share price rise or fall of about 25 per cent in a week is common. Although the share price is poised to trade higher, the outlook could turn bearish if the market mood changes and the price falls below $125. The shares closed at $142.09 on June 27.
 
SELL RECOMMENDATIONS
 
Bega Cheese (BGA)
Chart: Share price over the year
 
Strong demand in 2017 lifted BGA’s share price to a new all time high of $8.15 in October 2017, just 2 cents above the previous all time high. BGA then fell under pressure to $6.35 in April 2018. The stock closed at $7.46 on June 27. However, if the price retreats strongly below $6.85, a further fall is probable. Therefore, be prepared to exit.
 
Pendal Group (PDL)
Chart: Share price over the year
 
This global investment management business was recently trading more than 20 per cent below its all time high. However, in the short term, the price may recover and rise above $11. Should PDL trade strongly below $9.45, the risk exists for the medium term trend to continue lower. Given this, watch these levels carefully and prepare an appropriate stop loss. The shares closed at $10.06 on June 27.

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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