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Stuart Bromley, Medallion Financial Group

BUY RECOMMENDATIONS

Pushpay Holdings (PPH)

Chart: Share price over the year

This digital payments collection and management software company has experienced a 42 per cent increase in customer growth in fiscal year 2020, which has been primarily driven in the US church market. As more churches move into the digital age in relation to collecting and managing donations, Pushpay is ideally positioned to fill a gap in the market. COVID-19 appears to be a catalyst behind more churches using Pushpay to collect payments given increasing online services during the pandemic.

PolyNovo (PNV)

Chart: Share price over the year

Involved in making dermal regeneration solutions using its NovoSorb biodegradable polymer technology. The company’s flagship product posted record sales in March. PNV is planning to use its technology for hernia repair. The company has invested in new machinery and is constructing a facility to make the hernia product. We believe PVN offers a bright outlook.

HOLD RECOMMENDATIONS

Saracen Mineral Holdings (SAR)

Chart: Share price over the year

The gold price recently breached $US1800 an once in response to economic and geopolitical uncertainty. We view Saracen as a large and growing Australian gold producer, which we continue to like for portfolios as a hedge. However, we will continue to monitor the Australian dollar, as any rise in our currency against the US greenback would negatively impact Australian producers.

Xero (XRO)

Chart: Share price over the year

The share price of this accounting software as a service business has continued to climb during the pandemic. Customers stick with the company’s competitively priced products. Recurring revenue and high margins are appealing. We expect XRO to increase customers in a post COVID-19 world.

SELL RECOMMENDATIONS

Qantas Airways (QAN)

Chart: Share price over the year

The airline’s balance sheet will be stronger given a $1.9 billion capital raising amid cutting costs. But global COVID-19 numbers continue to grow. Too much uncertainty surrounds the outlook for international travel. We believe travel stocks carry too much risk at this point and investors can do better elsewhere.

Flight Centre Travel Group (FLT)

Chart: Share price over the year

Bargain hunters flocked to Flight Centre at low prices and the shares bounced. But the share price has been recently trending lower again as the pandemic continues to create uncertainty as to when FLT is likely to operate at pre-COVID-19 levels. We prefer businesses with minimal exposure to a virus that may drag on longer than expected.

Chris Conway, Marcus Today

BUY RECOMMENDATIONS

Megaport (MP1)

Chart: Share price over the year

This global provider of elastic interconnection services is a growth stock that’s recently impressed. Total enabled data centres grew by 9 per cent in the March quarter to 601. Customers increased by 6 per cent to 1777. MP1 took advantage of COVID-19 by accelerating the elastic interconnection business, as a growing number of organisations shift to digital remote workforces and rely more on the cloud.

Bellevue Gold (BGL)

Chart: Share price over the year

The company reported that recent metallurgical tests returned exceptionally high recoveries from conventional processing. Subsequently, opportunities to fast track development of the gold project are firming. BGL has upside potential to become a producer. We see further upside given gold prices are likely to be supported, as governments around the world continue to print money, resulting in low or negative yields. BGL is a speculative buy. Shares in BGL closed at 98 cents on July 2.

HOLD RECOMMENDATIONS

Accent Group (AX1)

Chart: Share price over the year

AX1 is a dominant footwear retailer. Like-for-like sales in May and June were up 7 cent. Surging online sales helped drive strong earnings in fiscal year 2020, which are forecast to be up about 10 per cent despite the COVID-19 shutdown. The company will continue to focus heavily on the online space moving forward.

Bapcor (BAP)

Chart: Share price over the year

This automotive aftermarket parts company recently reinstated fiscal year 2020 guidance. It expects net profit after tax to range between $84 million and $88 million. Trading in May and June was strong. BAP has rationalised the business and the outlook appears bright. The shares have risen from $3.88 on March 20 to close at $6.02 on July 2.

SELL RECOMMENDATIONS

Qantas Airways (QAN)

Chart: Share price over the year

The airline is up against rising COVID-19 numbers around the globe, governments reinstating restrictions and people uneasy about travel. Raising $1.9 billion in fresh capital and restructuring the business are positives. There will come a time to buy QAN again. At this point, we don’t see any reason to own it.

FlexiGroup (FXL)

Chart: Share price over the year

FXL is in the buy now, pay later space. It recently announced it had more than 2.1 million customers and processed $2 billion across its retail platform for the 11 months to May. The company says it’s a leader in interest free instalment transactions above $1000. But a default on a $200 transaction carries less risk than a default on a transaction of $1000 or more. Furthermore, we believe COVID-19 casts a cloud on the outlook despite the recent solid results.

Jabin Hallihan, Morgans

BUY RECOMMENDATIONS

TPG Telecom (TPG)

Chart: Share price over the year

The merge with Vodafone Hutchison Australia creates a stronger competitor for Telstra. Compared to Telstra, we believe TPG will be a more efficient and faster growing operator. We expect TPG to develop into a leaner operation that’s likely to outperform the competition.

JB Hi-Fi (JBH)

Chart: Share price over the year

The consumer electronics giant has outperformed a volatile S&P/ASX 200 index. It stands to benefit from people withdrawing a portion of their superannuation. Federal Government assistance payments during the pandemic will also benefit the company. JBH is well placed given technology products and home appliances continue to drive sales during COVID-19.

HOLD RECOMMENDATIONS

Bapcor (BAP)

Chart: Share price over the year

This automotive aftermarket parts provider recently released an upbeat update. The company’s retail segment experienced strong demand in May and June. Other businesses are recovering more rapidly than initially anticipated. BAP is a defensive stock that we’re comfortable holding.

APA Group (APA)

Chart: Share price over the year

A gas infrastructure company that owns and operates a portfolio of assets. APA is growing revenues, generating high margins and offers a solid balance sheet. US acquisitions are expected to expand the growth investment platform. Distributions are increasing. APA appeals in uncertain times as it’s a defensive business.

SELL RECOMMENDATIONS

ResMed (RMD)

Chart: Share price over the year

This medical device company is a core holding in many portfolios. The share price has risen from $17.65 on July 2 last year to trade at $27.69 precisely a year later. A lot of good news has been priced in, so there’s little room for error. Investors can consider trimming their position.

Australian Finance Group (AFG)

Chart: Share price over the year

The company reported a strong nine months in fiscal year 2020. However, we believe this mortgage aggregator remains vulnerable to a lending slowdown. Banks are increasingly cautious about lending to borrowers in an uncertain employment environment. Fewer loans can mean less commission. The shares are trading above our valuation.

 

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.