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November, 2018 4:00 PM



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18 Share Tips - 13 August 2018

18 Share Tips - 13 August 2018

By Anthony Black 13.08.2018



James Bryce-Lind, Patersons 

BUY RECOMMENDATIONS

Bannerman Resources (BMN)
Chart: Share price over the year

There have been several key catalysts, such as production cuts from large industry players and the creation of special purpose investment vehicles to support the view the uranium price has bottomed. The U308 (uranium) spot price has rallied 27 per cent from its 2018 low as a result of tightening global supply. Bannerman has a 95 per cent interest in a uranium project in Namibia. Bannerman is a proven proxy to the U308 spot price.

Zip Co (Z1P)
Chart: Share price over the year

Operates in the digital retail finance and payments industry. Z1P has posted triple digit growth metrics for fiscal year 2018, while reaching guidance for monthly break even cash flow. The momentum behind the business is set to continue with a growing number of large turnover merchants, such as Super Retail Group, joining its platform.
 
HOLD RECOMMENDATIONS

Reliance Worldwide Corporation (RWC)
Chart: Share price over the year

Key stakeholders in this plumbing fittings manufacturer have reduced their holdings, which in our view, creates uncertainty – at least in the short term. Speculation exists surrounding the size of a potential impact on earnings in response to the ever-changing US duty threat. This combined with a high valuation has seen us move from a buy to a hold recommendation for now.
 
Technology Metals Australia (TMT)
Chart: Share price over the year

The vanadium price has been the best performing battery-linked commodity of the year. TMT is my choice of proxy to the V205 (vanadium) price. The share price has risen from 37.5 cents on June 22, 2018 to trade at 72.5 cents on August 9. 
 
SELL RECOMMENDATIONS

The A2 Milk Company (A2M)
Chart: Share price over the year

This infant formula company has enjoyed a super run since August last year. However, recent volatility in leading growth stocks across the globe shows how unforgiving markets have been on high multiple stocks. A2M shares have fallen from $12.13 on May 15, 2018 to trade at $9.43 on August 9. The price fall followed a downgrade. 

Perseus Mining (PRU)
Chart: Share price over the year

The gold miner’s share price has fallen from a 52-week high of 51 cents on April 19, 2018 to trade to 39.7 cents on August 9. We’re concerned about mining activity costs. Better options exist elsewhere, in our view.

Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

Cimic Group (CIM)
Chart: Share price over the year

The construction giant’s first half result was well received by cautious investors as shown by the share price bounce. In our view, the shares are likely to re-rate from here. And from a charting perspective, CIM could head towards $60 over the next few months or so. The shares were trading at $50.11 on August 9. 

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

For the past few months, this global miner has been range bound between about $32 and $34. We’re finally seeing it breach the upper side of that range. We’re confident BHP is on the move again. Our charting levels indicate a rally towards $40 in the next few months. BHP shares were trading at $34.20 on August 9.

HOLD RECOMMENDATIONS

Liquefied Natural Gas (LNG)
Chart: Share price over the year

The past two weeks has been most bullish for LNG as it pushed through another resistance level. The shares now look on course to head towards at least $1. A clear break of that (and the two-year base) could see it make a run towards the long term resistance level marginally above $2. The shares were trading at 81 cents on August 9.

Costa Group Holdings (CGC)
Chart: Share price over the year

The fruit and vegetable grower recently peaked near $9, but has retreated to a good level of support around $8.40 levels that may represent a buying opportunity. However, given the severity of the falls during June and July, it may not move to a new high too rapidly and could congest around the mid $8 levels before getting ready to resume the uptrend.  

SELL RECOMMENDATIONS

The Star Entertainment Group (SGR)
Chart: Share price over the year

The share price of this casino and entertainment operator has recently struggled and, from our technical analysis, price action indicates SGR is heading for lower levels. On May 14, 2018, the shares were priced at $5.43. The stock was trading at $5.02 on August 9.

Orocobre (ORE)
Chart: Share price over the year

Around $5 was a key support level, but this lithium carbonate supplier was trading at $4.41on August 9. For the moment, we’re targeting support closer to $4. If that can’t hold, then I could see a move back towards $3, erasing a year’s worth of gains. 

Michael McCarthy, CMC Markets

BUY RECOMMENDATIONS
 
Seven West Media (SWM) 
Chart: Share price over the year

The turnaround in earnings at other traditional media groups could be at least partly cyclical. With Nine Entertainment and Fairfax Media turning their gaze internally after announcing a merger, there’s a chance for SWM to grab some share and confirm an earnings turnaround. The charts suggest the stock has based at 83 cents. SWM was trading at 91 cents on August 9.
 
FlexiGroup (FXL) 
Chart: Share price over the year

The share price slump following the company announcing it was appointing a new CEO presents a buying opportunity. This diversified financial services group has restructured its product range and re-focused its efforts. The new CEO Rebecca James will bring significant financial services experience to the top job and could leverage the financial expertise already on hand.
 
HOLD RECOMMENDATIONS
 
Rio Tinto (RIO) 
Chart: Share price over the year

The iron ore and copper producer is, in my opinion, trading at an undemanding share price given its recent report, long term commodity price estimates below current spot prices, the highest ever interim dividend and another $1US billion share buy-back.

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

Earnings downgrades and write-downs related to overseas operations have contributed to pushing the share price to lower levels. Management of this private hospital operator aren’t sitting on its hands, with a bid for Swedish healthcare company Capio on the table. A turn in earnings could see a significant price rise, although it may be several quarters before this becomes apparent.

SELL RECOMMENDATIONS
 
Nanosonics (NAN)  
Chart: Share price over the year

The company specialises in preventing infection and is an exciting Australian success story. However, the stock price is lofty and the price/earnings multiple in triple digits. Any disappointment at its August 23 report could significantly hurt the share price. Consider selling on a risk/reward outlook. An inline result or positive surprise has, in my view, little likelihood of significantly lifting the share price.
 
Bega Cheese (BGA) 
Chart: Share price over the year

A stock with positive long term potential that’s trading on a higher valuation and price/earnings ratio. Analysts are largely positive about the recent dairy facility acquisition in Western Australia. In my view, the good news is reflected in the elevated share price, and there is potential for a correction.

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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