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Tuesday 11

December, 2018 3:01 AM



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18 Share Tips - 3 December 2018

18 Share Tips - 3 December 2018

By Anthony Black 03.12.2018



Michael Kodari, KOSEC

BUY RECOMMENDATIONS

Mineral Resources (MIN)
Chart: Share price over the year

The company’s share price soared after it entered into an exclusive agreement with Albemarle Corporation to potentially sell a half share in its Wodgina lithium project for $US1.15 billion. The agreement includes a 50/50 joint venture to produce spodumene concentrate and lithium hydroxide. MIN is a fundamentally sound mining services and processing operator. The shares closed at $15.17 on November 29.

Super Retail Group (SUL)
Chart: Share price over the year

The shares recently fell to a six month low after CEO Peter Birtles announced he would be stepping down after more than 12 years at the helm. However, the company, with businesses including Supercheap Auto, Rebel, BCF and Macpac, has experienced a relatively strong start to fiscal year 2019, with each of its divisions achieving positive like-for-like sales growth. This is despite a continuing decline in broader consumer confidence. Shares in SUL closed at $7.54 on November 29.

HOLD RECOMMENDATIONS

Aristocrat Leisure (ALL)
Chart: Share price over the year

An exciting growth story. The gaming machine company posted a 34 per cent increase in net profit after tax and amortisation to $729.6 million for the year to September 30. Normalised operating revenue rose 47.7 per cent to $3.624 billion. Hold Aristocrat given the company’s exposure to the US market and continuing growth in its digital gaming arm. 

Whitehaven Coal (WHC)
Chart: Share price over the year

The thermal coal producer has been sold off in recent times, in line with the broader market. A potential rebound could be partly driven by persistent demand from China and Japan. Also, the stock may attract bargain hunters as it was recently trading relatively low within its range.

SELL RECOMMENDATIONS

Orocobre (ORE)
Chart: Share price over the year

ORE is a global lithium carbonate supplier. I have concerns about a potential oversupply in the lithium market. Although the shares are way off their 52 week high of $7.44 on January 30 this year, the company has enjoyed a reasonably good run up to November 29. However, I believe the shares could potentially pull back from here. The shares closed at $4.33 on November 29.

Healthscope (HSO)
Chart: Share price over the year

Brookfield Capital Partners has lodged a takeover bid for this private hospital operator. Brookfield has proposed an off market takeover offer representing total value of $2.455 a share and a simultaneous scheme of arrangement representing total value of $2.585 a share. HSO has provided exclusive due diligence to Brookfield until December 21. There is no guarantee the bid will proceed. Consider selling. The shares closed at $2.20 on November 29.

Theo Karantzias, Alpha Securities

BUY RECOMMENDATIONS

Adriatic Metals PLC (ADT)
Chart: Share price over the year

ADT has high grade polymetallic projects in Bosnia and Herzegovina. Shares were issued in the initial public offering (IPO) at 20 cents before listing on May 1, 2018.  Good results were reported at its Rupice project. The company is well funded to continue its aggressive drilling program. Sandfire Resources has a strategic 7 per cent stake in ADT. The shares were trading at 68.5 cents on November 29. 

Harvey Norman (HVN)
Chart: Share price over the year

HVN’s patience and perseverance in Malaysia and Ireland is paying off with retail growth. The company reported an aggregated total sales increase of 65.4 per cent in Malaysia and 29.8 per cent in Ireland between July 1, 2018 and November 23 when compared to the same period in 2017. The shares are way off their year high of $4.54 on February 27. The shares were trading at $3.135 on November 29. HVN’s most attractive annual fully franked dividend yield was recently 9.68 per cent.

HOLD RECOMMENDATIONS

Byron Energy (BYE)
Chart: Share price over the year

Last year, the company raised $28.5 million at 7 cents a share to develop its oil and gas projects. The company reported a net profit of $US1.3 million for the year ending June 30, 2018 compared to a net loss of $US5.357 million the previous year. The Byron operated South Marsh Island lease began oil and gas production in late March 2018. The shares were trading at 22.5 cents on November 29. 

Australian Mines (AUZ)
Chart: Share price over the year

bankable feasibility study (BFS) is said to support a strong commercial case for developing the Sconi Cobalt-Nickel Scandium project in North Queensland. The BFS indicated average cobalt sulphate production of 8500 tonnes a year. It also indicated average nickel sulphate production of 53,000 tonnes a year. This is one to watch. The shares were trading at 4.1 cents on November 29.

SELL RECOMMENDATIONS

ResApp Health (RAP)
Chart: Share price over the year

A digital health company developing smartphone applications for diagnosing and managing respiratory disease. The company released positive preliminary results for its smartcough C-2 study on October 30. However, the shares have been in a downtrend. The shares were priced at 26.5 cents on October 16. The shares were trading at 10.5 cents on November 29. 

Qantas Airlines (QAN)
Chart: Share price over the year

The shares were priced at $6.76 on August 20. The shares were trading at $5.985 on November 29. The annual dividend yield was recently below 3 per cent. In my view, the shares are still too expensive in a fickle and highly competitive industry. 


Brendan Fogarty, BW Equities

BUY RECOMMENDATIONS
 
Boss Resources (BOE)
Chart: Share price over the year
 
The best and most realistic ASX pre-production uranium play we have identified is BOE. It has a low cost advanced resource targeting up to 3.2 million pounds per annum. BOE has necessary approvals in place to resume production. It has an existing modern plant, financing and proven management. Uranium prices have resumed a long term uptrend, rising 23 per cent since December 2017. BOE shares were trading at 6 cents on November 30.
 
Titomic  (TTT)
Chart: Share price over the year
 
This additive metals manufacturing company has been a market darling since listing in September 2017. It offers the world’s largest and fastest 3D metal printing builds for industrial scale uses. Potentially displacing dormant manufacturing methods initially focused on titanium. Titomic has secured seven research and development project agreements. It’s well placed to enter major markets, including aerospace, military, marine, sporting and consumer goods, automotive, mining and oil and gas. Buy and hold.

HOLD RECOMMENDATIONS

Telstra (TLS)
Chart: Share price over the year
 
In the current market, investors are not only focusing on returns, but more on reducing risk. Telstra offers modest growth and is a defensive cash flow company. It was recently yielding around 5 per cent and is a worthy hold in any risk adjusted portfolio. In my view, the share price is likely to favour the upside in coming months.
 
NextDC (NXT)
Chart: Share price over the year
 
The data centre market in Australia is growing with a greater level of consistency and predictability. In my view, NXT delivered a solid, but not spectacular fiscal year 2018 result, comprising revenue of $161.5 million and underlying EBITDA of $62.6 million. Next DC will continue to vie for its share of market growth against aggressive competitors. New sites in Melbourne, Sydney and Perth will underpin further growth.

SELL RECOMMENDATIONS
 
National Australia Bank (NAB)
Chart: Share price over the year
 
The current risk averse banking and financial sectors are focusing more on conservative balance sheet management, cultural change and compliance. Consequently, in my view, the short to medium term outlook for our major banks is cloudy, particularly given a sluggish east coast property outlook. NAB offers a reasonable yield, but appears to be under the most pressure compared to peers. The shares were priced $28.30 on August 30. The stock was trading at $24.63 on November 30.
 
AMP (AMP)
Chart: Share price over the year
 
The outlook for AMP continues to go from bad to worse following recent news of an estimated $1.1 billion expense to compensate customers for inappropriate advice and fees for no service. Clearly, the systems and practices at AMP remain in need of systemic change. We expect possibly more internal strife as financial planners seek to exit their respective business units, and, in too many cases, leaving AMP to foot the bill at above market book value multiples.
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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WHAT’S ON THIS WEEK

week 14 December 2018
    • 10
    • ABS Housing finance data | 9:30 AM
    • 11
    • ABS Residential Property Price Indexes | 9:00 AM
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    • WBC Consumer confidence index | 9:00 AM
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