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January, 201912:13 AM



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18 Share Tips - 17 December 2018

18 Share Tips - 17 December 2018

By Anthony Black 24.12.2018



Jabin Hallihan, Morgans 

BUY RECOMMENDATIONS

Woolworths (WOW) 
Chart: Share price over the year

Heading into 2019, we don’t see much difference between the two main supermarket giants Woolworths and Coles. Both have similar strategies of remaining price competitive, improving the fresh food offer and expanding the multi channel proposition. While the sector remains most competitive, we believe it’s prudent to have some exposure to the defensive grocery sector in a volatile market. We like Woolworths for its diversified exposure that includes Big W department stores, petrol stations and the hotels portfolio. 

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

Cleanaway’s resilient revenues, strong earnings growth and its deleveraging are appealing. Based on the trading multiples of leading US waste management companies, there’s upside potential beyond our valuation if the market becomes increasingly confident with the risk and growth potential of the company. 

HOLD RECOMMENDATIONS 

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

Aristocrat remains our key pick in the gaming sector following the company’s fiscal year 2018 result, even though it marginally missed our expectations. The company is investing substantially to retain its strong market position, and we believe its compelling product offering should drive earnings growth over the next few years. 

Sydney Airport (SYD) 
Chart: Share price over the year

Infrastructure is a safe haven in uncertain times. In weak markets, we expect core infrastructure stocks to outperform the broader market. Resilient revenues, growing distributions, strong balance sheets and solid yields offer safety for investors. These features delivered downside protection in the broader market sell-off. Sydney Airport is our preference in transport infrastructure. SYD was recently trading on an attractive dividend yield above 5 per cent. 

SELL RECOMMENDATIONS

Boral (BLD) 
Chart: Share price over the year

We expect a downturn in building and property related industries. This building products supplier needs to improve its performance after a slow start in the 2019 first quarter that’s continued into October. BLD is hoping to recover volumes as fiscal year 2019 progresses, but it needs strong conditions to achieve its full year targets. 

Santos (STO)
Chart: Share price over the year

The energy giant has committed to repairing its balance sheet, while it also seeks to support its share of Papua New Guinea expansion and the Barossa and Cooper Basin projects. While these projects could still be sanctioned in a down oil market, in our view its combined capital expenditure burden on top of the load already on STO’s balance sheet could further stretch capital resources. 

Michael Heffernan, PhillipCapital

BUY RECOMMENDATIONS

Computershare (CPU)
Chart: Share price over the year

This share registry company recently delivered an impressive report. It stands to benefit from investing in short term US interest rate products in a rising interest rate environment. Moreover, it’s a beneficiary of slowly improving world economies.
 
Tabcorp (TAH) 
Chart: Share price over the year

While its recent report was satisfactory, it’s more about the benefits flowing the merger with Tatts Group that will drive future performance. It was recently trading on an attractive fully franked dividend yield above 4.5 per cent.

HOLD RECOMMENDATIONS

ASX Limited (ASX)
Chart: Share price over the year

The ASX has been an impressive performer during recent market turbulence. While company share prices have been soft in the past few months, turnover has been robust. Moreover, future revenues should be bolstered by  additional capital raisings sparked by gradually improving share prices.

ResMed (RMD)
Chart: Share price over the year

Makes medical devices to treat breathing disorders, such as sleep apnoea. It has also been an impressive performer during recent market turbulence. Exposure in the US means it’s likely to benefit from a strong economy and any depreciation in the Australian dollar.
 
SELL RECOMMENDATIONS

CYBG PLC (CYB)
Chart: Share price over the year

This off-cut from the NAB’s banking business in the UK recently delivered a disappointing report, in my view. Its outlook statement was uninspiring. Also, its recent purchase of Virgin Money hasn’t lived up to my expectations. I believe better options exist elsewhere.
 
IOOF Holdings (IFL)
Chart: Share price over the year

The Australian Prudential Regulation Authority (APRA) alleges IOOF failed to act in the best interests of superannuation members. APRA alleges IOOF Investment Management Limited breached section 52 of the Superannuation Industry (Supervision) Act 1993. Managing director Christopher Kelaher and chairman George Venardos agreed to step aside from their respective positions to focus on defending the actions brought against them by APRA. The company announced it would vigorously defend the allegations. However, the share price has been hammered. Best to wait until the dust clears.

Janine Cox, Wealth Within

BUY RECOMMENDATIONS
 
Tassal Group (TGR) 
Chart: Share price over the year
 
Since 2014, this salmon producer has followed a pattern of rises and falls, which, in my view, makes the stock more suited to traders than investors. Although the short term trend is up, TGR appears directionless overall and must trade strongly above $4.50 before it can chase its all time high of $5.10 in January 2016. The stock closed at $4.44 on December 13.
 
Woolworths (WOW) 
Chart: Share price over the year
 
This supermarket giant is my preferred major consumer staples stock when compared to rival and new listing Coles. New listings often fall below the offer price in the first 12 months. A rise in WOW’s price above $30 would indicate that resistance has been broken and the market is prepared to pay more in 2019. The shares finished at $28.49 on December 13.

HOLD RECOMMENDATIONS
 
Newcrest Mining (NCM)
Chart: Share price over the year
 
A higher gold price is supporting NCM’s share price. However, there’s a risk of increased selling if NCM trades below $19 in coming months. If that happens, NCM may be rapidly sold down. The stock finished at $20.67 on December 13.
 
BWP Trust (BWP) 
Chart: Share price over the year
 
While the market has been falling, the share price of this real estate investment trust has been climbing towards its all time high of $3.91 in August 2016. We see momentum slowing in 2019, but see no reason to exit the stock. A suitable trailing stop loss will enable profits to be locked in next year. The shares closed at $3.67 on December 13.

SELL RECOMMENDATIONS
 
Super Retail Group (SUL) 
Chart: Share price over the year
 
Following an announcement in October 2018 that chief executive Peter Birtles plans to retire next year, SUL fell swiftly towards a low of $6.42 in March 2018. During his 13-year tenure as CEO, Birtles has steered SUL to generate earnings growth of around 650 per cent. But should SUL trade below $6.42, the risk of a further decline to around $5 will increase. The shares closed at $7.34 on December 13.
 
SKYCITY Entertainment Group (SKC) 
Chart: Share price over the year
 
The casino operator broke an important level of support at around $3.30 on December 11. In our view, and from a technical perspective, this indicates that a further decline is likely in 2019 to between $2.80 and $3. The stock finished at $3.34 on December 13.
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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Coles has extra appeal in a shaky market. The companys consumer-staples offering has defensive qualities in a slowing Australian economy.

Coles comes out from Wesfarmers shadow

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