18 Share Tips – 28th October 2024

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John Edwards, Novus Capital

BUY RECOMMENDATIONS

BUY – Telix Pharmaceuticals (TLX)  

Telix is developing a portfolio of clinical stage products that aim to address unmet medical needs in oncology and rare diseases. Telix recently announced it was acquiring RLS Radiopharmacies to further build its direct commercialisation capabilities in the US. Telix is also assembling supply chain capabilities and building its independence as a fully integrated pharmaceutical developer. Our 12-month share price target is $24. The shares were trading at $21.76 on October 24.

BUY – Vertex Minerals (VTX)

Vertex is an Australian mining company moving to gold production in January 2025 at its 100 per cent owned Reward Gold mine. The Reward Gold mine is a standout mining operation, particularly with a focus on low carbon emissions amid valid ESG (Environment, Social and Governance) credentials. The Reward resource is 419,000 tonnes for 225,200 ounces of gold at a grade of 16.7 grams a tonne. I own shares in VTX. Our 12-month share price target is 45 cents. The shares were trading at 21 cents on October 24.

HOLD RECOMMENDATIONS

HOLD – Deterra Royalties (DRR)

The company manages a portfolio of royalty assets across a range of commodities. Deterra remains an attractive long term opportunity, in our view. DRR will generate royalties from precious metals, lithium and copper after recently acquiring Trident Royalties PLC. Our 12-month share price target is $4.40. The shares were trading at $3.76 on October 24. Risks to our share price target are softer Chinese demand, exchange rate fluctuations and slower than expected production.

HOLD – LTR Pharma (LTP)

LTR Pharma is a drug development and research company. The company is focused on commercialising an innovative nasal spray to treat erectile dysfunction. LTR’s lead product Spontan is absorbed at a much faster rate than oral vardenafil tablets, according to a pivotal study. Spontan achieved a mean time of 12 minutes compared to 56 minutes for the oral tablet. A favourable safety profile positions Spontan to be a potentially serious disruptor in the global erectile dysfunction market. I own shares in LTP. Our 12-month share price target is $3. The shares were trading at $1.33 on October 24.

SELL RECOMMENDATIONS

SELL – Bank of Queensland (BOQ)

BOQ is one of Australia’s leading regional banks. Total income of $1.6 billion in fiscal year 2024 declined 8 per cent on the prior corresponding period. Net interest income of $1.463 billion fell 9 per cent. Cash earnings per share were down 24 per cent. The bank still appears expensive. In our view, it needs to cut costs and lift profits, which is a challenge in a fiercely competitive market. Our 12-month share price target is $5.20. The shares were trading at $6.815 on October 24.

SELL – Core Lithium (CXO)

The company owns the Finniss lithium operation in the Northern Territory. The operation has been placed in care and maintenance given a global lithium glut has led to a price plunge from 2023. The company is exploring for gold and base metals. We prefer other stocks in the absence of lithium mining. CXO’s share price has fallen from 39 cents on October 30, 2023, to trade at 11 cents on October 24, 2024. Our share price target is 9 cents.

Damien Nguyen, Morgans

BUY RECOMMENDATIONS

BUY – Insignia Financial (IFL)

This financial services company presents a value opportunity, in our view. It’s trading on an appealing multiple compared to its peers and a significant discount to other platform providers. EBITDA of $381.3 million in fiscal year 2024 was up 10.8 per cent on the prior corresponding period. Average funds under management and administration of $301.2 billion was up 3.2 per cent. We see further upside from here as we expect the market to re-rate the stock.

BUY – Woodside Energy Group (WDS)

The energy giant posted record production of 53.1 million barrels of oil equivalent in the third quarter of fiscal year 2024. Third quarter production was up 20 per cent on the second quarter. Revenue of $3.679 billion in the third quarter was up 21 per cent on the previous quarter. The share price has been under pressure in 2024, driven by external factors rather than company specific issues. Despite this, WDS retains a low debt level, strong dividend payouts and robust earnings quality.

HOLD RECOMMENDATIONS

HOLD – Life360 Inc. (360)

This information technology company provides a mobile networking safety app for families. The company posted revenue of $US84.9 million in the second quarter of fiscal year 2024, a year-on-year increase of 20 per cent. Total subscription revenue of $US65.7 million was up 25 per cent. The shares have risen from $7.48 on January 2 to trade at $21.73 on October 24. We view Life360 as a quality company. But given the rapid rise, we recommend investors hold their current allocation.

HOLD – HUB24 (HUB)

HUB operates an investment and superannuation platform. The company posted record platform net inflows of $4 billion in the first quarter of fiscal year 2025, up 44 per cent on the prior corresponding period. Total funds under administration of $113 billion at September 30, 2024, were up 37 per cent. We believe the momentum will continue. But, in our view, the shares are trading at elevated levels, so we suggest keeping across the news flow.

SELL RECOMMENDATIONS

SELL – Bank of Queensland (BOQ)

Shares in one of Australia’s leading regional banks have risen from $6.10 on October 10 to trade at $6.815 on October 24. We believe it may be a good time to cash in some gains on the recent bounce considering the latest result. Total income in fiscal year 2024 was down 8 per cent on the prior corresponding period, but operating expenses rose 6 per cent. Underlying profit was down 27 per cent. Other stocks appeal more in times of an uncertain global outlook.

SELL – Sigma Healthcare (SIG)

Sigma is a wholesaler and distributor of prescription medicines and over the counter and front of store products to more than 4000 community pharmacies across Australia. Chemist Warehouse is a franchisor to about 600 pharmacies and retail stores. The proposed Sigma and Chemist Warehouse merger appears to be already priced in by the market. Sigma stock has risen from $1 on January 2 to trade at $1.83 on October 24. We believe it may be a good time to take some profits as no final decision on the proposed merger has been made by the Australian Competition and Consumer Commission as of October 24.

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BUY RECOMMENDATIONS

BUY – CSL (CSL)

CSL is a global biotechnology company. Its medicines treat haemophilia and immune deficiencies. It makes vaccines to prevent influenza. The company provides products to patients in more than 100 countries. CSL is a consistent performer. It generated total revenue of $US14.8 billion in fiscal year 2024, an increase of 11 per cent on the prior corresponding period. Reported net profit after tax of $US2.642 billion was up 20 per cent. The shares were recently trading at a discount and present an appealing buying opportunity, in our view.

BUY – Mineral Resources (MIN)

MIN is a diversified mining services company. It’s also a lithium and iron ore producer. Share price weakness in 2024 has been driven by its net debt level, weaker commodity prices and negative investor sentiment. The shares have fallen from $79.49 on May 20 to trade at $35.99 on October 24. At these levels, we believe the shares are trading at a steep discount. The company’s Onslow iron project is a growth driver as it will significantly increase volumes at a lower cost moving forward.

HOLD RECOMMENDATIONS

HOLD – WiseTech Global (WTC)

WiseTech develops software for the global logistics industry. The shares have risen from $76.16 on January 2 to trade at $99.175 on October 24. The company delivered a strong 2024 fiscal year result. Total revenue of $1.041 billion was up 28 per cent on the prior corresponding period. Statutory net profit after tax of $262.8 million was up 24 per cent. Provided market conditions don’t materially change, the company anticipates revenue to grow between 25 per cent and 30 per cent in fiscal year 2025 and EBITDA to grow between 33 per cent and 41 per cent.

HOLD – APA Group (APA)

APA is an energy infrastructure business. Its portfolio includes gas, electricity, solar and wind assets. Underlying EBITDA of $1.893 billion in fiscal year 2024 was up 9.7 per cent on the prior corresponding period. The increase in underlying EBITDA was underpinned by an eight month contribution from Pilbara Energy and a solid performance from the east coast gas expansion. The company paid a full year 2024 distribution of 56 cents a security, which is expected to rise to 57 cents in fiscal year 2025.

SELL RECOMMENDATIONS

SELL – Qantas Airways (QAN)

The company posted statutory profit after tax of $1.25 billion in fiscal year 2024, down 28 per cent on the prior corresponding period. The operating margin was 10.4 per cent in fiscal year 2024 compared with 13.5 per cent in fiscal year 2023. Net debt of $4.1 billion was within the target range. The airline business, by its very nature, can be volatile as its exposed to unpredictable external and economic events. Qantas shares have risen from $5.78 on August 5 to trade at $7.925 on October 24. Investors may want to consider cashing in some gains at these levels.

SELL – Commonwealth Bank of Australia (CBA)

Australia’s biggest bank appeals to investors. The shares have risen from $97 on October 26, 2023, to trade at $143.45 on October 24, 2024. The full year result was in line with expectations. But, in our view, CBA’s valuation remains stretched at these levels. The shares are priced to perfection and leave little to no room for disappointment. Investors may want to consider taking a profit.

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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.