The Bull

Friday 19

October, 2018 8:42 PM



TheBull PREMIUM

  • 18
  • Share
  • Tips

18 Share Tips - 6 August 2018

18 Share Tips - 6 August 2018

By Anthony Black 06.08.2018



Philippe Bui, Medallion Financial Group

BUY RECOMMENDATIONS

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

Provides international student placements and English language testing services. It also owns and operates several English language schools in South East Asia. We believe the company continues to take advantage of a fragmented industry and offers strong underlying growth.

Bapcor (BAP)
Chart: Share price over the year

Supplies and distributes automotive aftermarket parts, with operations in Australia and New Zealand. With guidance of 30 per cent growth in net profit for fiscal year 2018, the company continues to deliver growth via its acquisition strategy. Share price momentum since early February continues. The shares have risen from $5.88 on February 2 to trade at $6.905 on August 2. 

HOLD RECOMMENDATIONS

ResMed (RMD)
Chart: Share price over the year

A global biotechnology company focusing on developing, making and marketing devices for treating sleep apnoea. December and March quarter earnings came in above market expectations, with international sales outside the US driving outperformance.

Janus Henderson Group PLC (JHG)
Chart: Share price over the year

A leading global asset manager listed on the ASX and the New York Stock Exchange. Although net outflows have recently been disappointing, the company currently trades on a most reasonable multiple compared to the rest of the sector. Formerly known as Henderson Group, we believe it can still extract synergies from its merger with Janus Capital Group.

SELL RECOMMENDATIONS

Metcash (MTS)
Chart: Share price over the year

A wholesale distribution and marketing company, with a diversified business across food, hardware and liquor services. In our view, it posted a disappointing result in June. Consequently, we believe it may be difficult for MTS to build momentum in the short term, with strong margin pressure continuing to affect the business.

AMP (AMP)
Chart: Share price over the year

A wealth management company with retail banking operations. With longer term systemic issues uncovered during the banking royal commission, the extent of downgrades linked to fee reductions and the downsizing of certain businesses still remains unclear. The shares have been punished and finished at $3.53 on August 2.

Ishan Dan, Wattle Partners

BUY RECOMMENDATIONS

Suncorp Group (SUN)
Chart: Share price over the year

Many analysts are expecting this financial services company’s full year result to beat expectations on August 9. Investors will be keenly awaiting an outcome on its life insurance review, and perhaps an announcement of a potential sale. Investors will be looking for a strong performance in general insurance, while thoroughly examining costs. The shares were priced at $13 on February 15. The shares closed at $15 on August 2. 

Orora (ORA)
Chart: Share price over the year

We’re expecting this global packaging company to post a solid full year result on August 9. With a strong balance sheet, steady revenue and earnings growth and rising free cash flow, we think ORA will continue to do well. It should benefit from Amazon’s entry into Australia as demand for corrugated boxes increases.  

HOLD RECOMMENDATIONS

Cleanaway Waste Management (CWY)
Chart: Share price over the year

We continue to like Cleanaway. A recent joint venture agreement with ResourceCo provides the company with a waste disposal solution in New South Wales. A new recycling factory will turn a quarter of a million tonnes of garbage and plastic into fuel every year. The company is due to post its result on August 20. 

Woolworths (WOW)
Chart: Share price over the year

Customers paying 15 cents for each plastic bag at the checkout should boost WOW’s gross profit. The stronger 15 cents bags recently replaced the free-of-charge lighter bags. The company should also benefit from reduced costs, as the stronger bags are reusable. We expect WOW’s like-for-like sales to be higher than competitor Coles. 

SELL RECOMMENDATIONS

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

Operates a buy now, pay later scheme that’s proving popular with the millennial age group. The shares have soared from $7.55 on February 2 to close at $13.75 on August 2. However, we expect tighter regulations governing these buy now, pay later schemes to be introduced going forward. This may have an impact. The stock has enjoyed a great run and is now looking expensive, in our view. Investors could consider locking in some profits. 

Netwealth Group (NWL)
Chart: Share price over the year

BT Financial Group’s Panorama platform was the first to cut fees on its superannuation platform. The move sent shockwaves through the sector and almost every platform was hit hard. Increasing competition may squeeze NWL margins. We think the risks are now to the downside. NWL shares were priced at $9.67 on July 20. The shares closed at $7.59 on August 2.

Jabin Hallihan, Morgans

BUY RECOMMENDATIONS

Rio Tinto (RIO)
Chart: Share price over the year

The global miner reported a half year profit of $US4.4 billion for the first half. The shares were sold down as the market was looking for $US4.45 billion. We set a price alert at $78 a share to accumulate. We’re comfortable with the outlook for higher quality iron ore and from capital management upside. We’re forecasting a gross dividend yield of 7 per cent for fiscal year 2019. Shares in the global miner closed at $77.65 on August 2. Our price target is $84.42 a share.  

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

Confidence in the private hospital operator should start to return if we see reliable full year results due on August 30. In June, the company advised that fiscal year 2018 core earnings per share growth was expected to be about 7 per cent compared to previous guidance of between 8 per cent to 10 per cent. We will thoroughly examine the result. Investors may want to consider buying a few shares ahead of the result on the presumption of a brighter outlook. Our price target is $62.28. The shares closed at $57.36 on August 2.

HOLD RECOMMENDATIONS 

Commonwealth Bank (CBA) 
Chart: Share price over the year

We remain cautious as the bank may potentially post a softer full year result as its undergone a leadership transition. However, we see a potential accumulation opportunity on weakness. We’re forecasting a gross dividend yield of 8.3 per cent for fiscal year 2019.  

Telstra (TLS) 
Chart: Share price over the year

The telecommunications giant has already provided forward guidance, so we’re not expecting any surprises when it’s due to report full year results on August 16. We’re forecasting a gross dividend yield of 8.6 per cent for fiscal year 2019. Our price target is $3.42 a share. The shares finished at $2.83 on August 2. 

SELL RECOMMENDATIONS

Wesfarmers (WES) 
Chart: Share price over the year

The share price has performed strongly in recent months ahead of the Coles demerger, but now trades at a marginal premium to our fair value. We retain a core exposure, but have taken advantage of a higher share price to pocket some profits and build the cash balance for potential opportunities. Our target price is $47.34. The stock closed at $49.72 on August 2.

Domino’s Pizza Enterprises (DMP)
Chart: Share price over the year

We expect the next update from Domino’s will guide the market towards net profit after tax growth of about 15 per cent in fiscal year 2019.  This is still strong growth, but it’s 3 per cent below current consensus growth forecasts. On our analysis, we expect broker downgrades.

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

Battered Gold Stocks Recovering

The battered gold miners' stocks are finally... More

The Gig Economy and Exploitation of Workers

The work rights of these gig workers needs to... More

Investor Signposts: Week Beginning Oct 15 2018

The Aussie jobs report takes centre stage in... More

Are businesses out to get us?

Why is business and the pursuit of profit so... More



WHAT’S ON THIS WEEK

week 19 October 2018
    • 15
    • N/A No items listed | 9:00 AM
    • 16
    • ANZ Weekly consumer confidence survey | 9:00 AM
    • 17
    • ABS Overseas arrivals and departures data | 9:00 AM
    • 18
    • ABS September job market figures | 9:00 AM
    • 19
    • N/A No items listed | 9:00 AM

TheBull.com.au

TheBull.com.au

TheBull PREMIUM article search



Markets
Index: Points Change Percent

Featured Comment

For all the gloom about retail and the Macpac acquisition, Super Retail has a total return (including dividends) of 23 per cent over one year

Macpac dresses up Super Retail Group

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.