18 Share Tips – 20 December 2021

John Athanasiou, Red Leaf Securities

BUY RECOMMENDATIONS

Singular Health Group (SHG)

In our opinion, the metaverse will be the most exciting theme in 2022 and that’s why we’re bullish on SHG – one of the cheapest listed metaverse companies on the ASX. SHG recently released collaborative medical visualisation software. It’s also formed a joint venture with TerraCentric under the name GeoVR. The objective is to commercialise GeoVR technology designed for the resources sector.

PlaySide Studios (PLY)

PLY is another favourite metaverse company of Red Leaf Securities. The video game developer has a growing client base. The company is at the forefront of blockchain gaming, and recently completed a $28 million capital raising, which enables it to pursue metaverse opportunities.

HOLD RECOMMENDATIONS

Airtasker (ART)

Airtasker is focusing on UK and US expansion opportunities, which can be beneficial to shareholders. However, we’re taking a conservative wait and see approach. Numerous Australian companies have previously struggled to adapt in overseas markets. We will continue to monitor Airtasker’s performance to see whether it can deliver on its global growth strategies.

Tyro Payments (TYR)

This payment solutions provider is still recovering from lockdowns. Transaction value of $3.095 billion in November 2021 was up 43 per cent on the prior corresponding period. However, the share price has been drifting since early November. Hold and monitor the company’s performance during the Christmas period. In our view, there shouldn’t be any urgency to buy at this point.

SELL RECOMMENDATIONS

Life360 Inc. (360)

This US based online family platform provider has been one of the best performing stocks in 2022. The share price has risen from $3.86 on January 4 to close at $10.35 on December 16. The company recently entered into a binding agreement to acquire cloud based finding platform Tile. Given Life360’s share price performance, there isn’t much room for error. It might be prudent to consider taking profits.

WiseTech Global (WTC)

WTC provides software solutions to the global logistics industry. The shares have risen substantially in 2021. The company posted a strong full year result, generating total revenue of $507.5 million in fiscal year 2021, an 18 per cent increase on the prior corresponding period. But the company was recently trading on lofty financial metrics. In our view, the shares are priced to perfection, so investors may want to consider taking some money off the table.

Braden Gardiner, Tradethestructure.com

BUY RECOMMENDATIONS

Sandfire Resources (SFR)

This copper miner has been generating increasing interest from buyers this year as copper prices consolidate around long term highs. The company is setting up a good start to 2022 after the Motheo copper mine in Botswana produced solid drilling results. The company raised capital to fund an expansion in Spain. The price was supported at $5 and I expect it to move through $7.25 before eventually testing $9 reached in mid 2018.

Leigh Creek Energy (LCK)

LCK is aiming to become a major urea fertiliser producer in Australia. Recent good news regarding an off-take agreement put a floor under the price at 10 cents a share, so I expect more buyers to be attracted to the action moving forward. In my view, the stock is trading at a discount after closing at 17.5 cents on December 16.

HOLD RECOMMENDATIONS

Andromeda Metals (ADN)

Andromeda has been working through acquiring South Australian based miner Minotaur Exploration, which, in my view, has kept a lid on the share price in recent months. A successful acquisition would leave Andromeda owning 100 per cent of the Great White Kaolin Project. The stock was holding above 14 cents on December 16. The stock should attract more buyers on a brighter outlook. The shares finished at 17 cents on December 16.

Capricorn Metals (CMM)

In July, the company announced it was acquiring the Mount Gibson Gold project in Western Australia. The shares rallied strongly on the news. At recent prices, I believe the stock will struggle to attract a big number of new buyers until the price consolidates, and then possibly goes higher.

SELL RECOMMENDATIONS

Johns Lyng Group (JLG)

The share price of this building services company has moved rapidly higher in the past six months. The recently completed institutional capital raising only added to the rally. I believe the stock has risen too quickly and is trading at a premium at this point in the cycle. Investors may want to consider locking in some profits.

AVZ Minerals (AVZ)

AVZ is focusing on developing the Manono lithium project in central Africa. The share price has risen more than 300 per cent since June on the back of a lithium boom. Recent and increasing trading volumes suggest a possible period of profit taking ahead, in my opinion. I believe it would be prudent to lock in some gains around theses levels.

Elio D’Amato, Spotee Connect

BUY RECOMMENDATIONS

American Pacific Borates (ABR)

ABR owns the Fort Cady boron project in California. The recently completed definitive feasibility study showed strong financial metrics and a calculated mine life of 21 years, with potential extensions. The US is keen to increase supply of this versatile critical metal, so we expect government support moving forward. It’s imminent listing on the NASDAQ as 5E Advanced Metals will increase awareness for this emerging miner.

Australian Vanadium (AVL)

AVL is developing what is likely to be one of the highest grade vanadium projects in the world. The bankable feasibility study on the project is almost completed. Metallurgical testing of samples revealed purity of 99.5 per cent V2O5 (vanadium pentoxide). Vanadium, as an alloy, is used to strengthen steel, but the company is also exploring its use in energy storage through vanadium redox flow batteries.

HOLD RECOMMENDATIONS

BrainChip Holdings (BRN)

BRN develops solutions for advanced artificial intelligence, with a primary focus on producing its Akida neuromorphic processor. Early interest in the product has been strong, and the company recently signed a four-year partnership deal with Japanese semi-conductor business MegaChips. The company has recently started generating revenue, but its market capitalisation is already $1.2 billion. Investors holding for potential need to closely manage their position within a well managed diversified portfolio.

Neuren Pharmaceuticals (NEU)

This drug development company recently announced that its Trofinetide candidate met co-primary efficacy end points. Statistically, it demonstrated significant improvement over placebo in the Rett Syndrome Behaviour Questionnaire and the Clinical Global Impression of Improvement. In response, the stock rose more than 100 per cent on the day. With upcoming work on the NNZ-2591 candidate covering more neurological conditions, investors may consider holding, as it’s potentially far more valuable than Trofinetide.

SELL RECOMMENDATIONS

Cochlear (COH)

COH is a terrific business with wonderful technology. But profit guidance of between $265 million and $285 million for fiscal year 2022 was materially lower than consensus analyst expectations for this hearing implants maker. New COVID-19 variants could impact Cochlear’s global operations longer than anticipated. This may delay treatment for a long list of patients.

Mesoblast (MSB)

The company is developing allogeneic cellular medicines for treating inflammatory conditions. The shares were recently punished after Novartis Pharmaceuticals terminated its proposed deal to commercialise the biotech’s flagship product for treating respiratory illnesses. MSB remains focused on bringing its drug to market. The shares have fallen from $1.70 on December 13 to close at $1.475 on December 16. The shares were priced at $2.31 on January 4, 2021. We believe investors can do better elsewhere.

The above recommendations are general advice and don’t take into account any individual’s objectives, financial situation or needs. Investors are advised to seek their own professional advice before investing. 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.