Gavin Wendt, MineLife
BUY RECOMMENDATIONS
Gold Road Resources (GOR)
Chart: Share price over the year to versus ASX200 (XJO)
The company’s share price has firmed from a recent low of 3.4 cents during June 2013 to a recent high of 21.5 cents – a recovery of more than 530 per cent. The explanation for the surge in interest revolves around the regional exploration success enjoyed at the company’s Yamarna project. Wide, high grade gold results have now been identified over a strike length of 2.6 kilometres.
West African Resources (WAF)
Chart: Share price over the year to versus ASX200 (XJO)
The gold explorer’s share price has risen from a 12-month low of 10 cents during late January to a February high of 16 cents. Hot on the heels of the recent takeover of Channel Resources, WAF has procured a second hand heap-leach plant that will accelerate development of its Mankarga 5 deposit, with first production targeted for 2015. The shares were trading at 15 cents on February 27.
HOLD RECOMMENDATIONS
Lamboo Resources (LMB)
Chart: Share price over the year to versus ASX200 (XJO)
The quality and diversity of Lamboo’s project portfolio and its high grade, high purity flake graphite products are what set it apart from most graphite industry hopefuls. The company has the potential for near-term production on two fronts. Firstly, South Korea, one of the world’s largest graphite markets where infrastructure is already well established, and in Western Australia.
Target Energy (TEX)
Chart: Share price over the year to versus ASX200 (XJO)
The company offers exposure to Permian Basin in Texas, one of the most prolific oil producing basins in the world. Since 1921, 29 billion barrels of oil and 75 trillion cubic feet of gas have been produced and huge upside remains. Technical issues have negatively impacted Target’s near-term production and share price performance, but these will be overcome.
SELL RECOMMENDATIONS
Wolf Minerals (WLF)
Chart: Share price over the year to versus ASX200 (XJO)
The company’s Hemerdon tungsten project in the UK ranks as the world’s third largest and is set for first production during the 2015 second half. The long life, large scale and low cost nature of Hemerdon means it has every chance of becoming a supplier of choice for international tungsten consumers. Given the strong recent share price run, investors might look to lock in some profits.
Regis Resources (RRL)
Chart: Share price over the year to versus ASX200 (XJO)
The company’s Duketon gold project in WA has been significantly impacted by huge rain, resulting in the closure of its Garden Well and Rosemont mines for another six weeks while the pits are dewatered. High operating costs and the significant costs associated with dewatering mean it’s a stock to avoid for the time being.
Michael Heffernan, Lonsec
BUY RECOMMENDATIONS
Rio Tinto (RIO)
Chart: Share price over the year to versus ASX200 (XJO)
Rio produced a most impressive annual report and is now reaping the benefits from cuts in capital expenditure. A focus on core activities, a higher dividend amid reasonably stable iron ore prices are all positives for future profitability.
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Seek (SEK)
Chart: Share price over the year to versus ASX200 (XJO)
Seek delivered a solid interim report, with net profit after tax excluding significant items, increasing 29 per cent to $87.4 million. Its education division and operations in China appear to be working well. This is a stand out listed stock in the internet arena.
HOLD RECOMMENDATIONS
Iress (IRE)
Chart: Share price over the year to versus ASX200 (XJO)
This financial services information provider, with operations in Australia and internationally, keeps on performing in a very workman-like fashion. Continuing improvements in global sharemarkets make this company an attractive investment proposition.
M2 Communications (MTU)
Chart: Share price over the year to versus ASX200 (XJO)
A second-tier telecommunications company delivered a most satisfactory interim report and lifted its dividend by 30 per cent on the same period last year. It has a track record of successful acquisitions of related businesses, sound sharemarket fundamentals and strong expected profit growth.
SELL RECOMMENDATIONS
Coca-Cola Amatil (CCL)
Chart: Share price over the year to versus ASX200 (XJO)
As expected, CCL delivered a disappointing interim result and is being squeezed by shrinking margins in the Australian grocery market, together with a reduced profit contribution from its interests in Indonesia. It’s now looking for another growth area, but this seems an elusive goal at the moment.
United Group (UGL)
Chart: Share price over the year to versus ASX200 (XJO)
Delivered a most disappointing interim result and is being adversely impacted by capital reductions in the mining services sector. Perhaps most disappointing of all is it provided no dividend in its recent report. There’s better options elsewhere in the sharemarket.
Darren Jackson, Calibre Investments
BUY RECOMMENDATIONS
Greencross (GXL)
Chart: Share price over the year to versus ASX200 (XJO)
Provides veterinary services and its latest report shows it continues to deliver strong revenue and earnings growth through acquisitions. However, directors selling shares was viewed as a red flag and the stock fell. Taking a longer term view, we see the pull back as a good buying opportunity.
Lamboo Resources (LMB)
Chart: Share price over the year to versus ASX200 (XJO)
An impressive junior resources company that’s targeting high purity crystal flake graphite needed by tech companies for electric cars and smart phones. Currently, LMB has an enviable institutional register with very little free float. It has an off take agreement in place after recently completing a capital raising. All the pieces appear to be in place for a re-rating.
HOLD RECOMMENDATIONS
Ibuy Group (IBY)
Chart: Share price over the year to versus ASX200 (XJO)
Just over a month ago we recommended buying Ibuy Group on a valuation basis relative to its peers. With a subsequent 28 per cent increase in price amid it moving closer to our short term price target, we reduce to a hold. Our outlook still remains very positive for this company and the sector in general.
Seek (SEK)
Chart: Share price over the year to versus ASX200 (XJO)
Seek doesn’t fail to deliver on growth as confirmed by its most recent report. It also recently announced an acquisition at about 24 times earnings. Given the extremely positive reaction and valuation to this news, we shift to a more neutral stance. We note in extremely dynamic markets with low barriers to entry, generous acquisition multiples should be the exception rather than the norm.
SELL RECOMMENDATIONS
McMillan Shakespeare (MMS)
Chart: Share price over the year to versus ASX200 (XJO)
With the demise of local auto manufacturing, McMillian Shakespeare becomes more vulnerable.
The crux of the business has been based around the Fringe Benefits Tax exemption, which primarily existed to support domestic auto production. Already, a Productivity Commission report views the exemption as unnecessary and come Budget time, the Government will be looking to plug the massive deficit.
Aurora Oil & Gas (AUT)
Chart: Share price over the year to versus ASX200 (XJO)
The company has entered into a scheme of arrangement for Baytex to acquire all of Aurora for $4.10 per share (subject to conditions). Taking into account the premium above the takeover which AUT trades, the time value of money and the relatively low probability that another party makes a counter offer, we believe AUT shareholders should sell and take profits. The shares finished at $4.14 on February 26.
Click on the links below to read other articles from this week’s newsletter
1. Boom times for internet plays: Many internet stocks have been wildy successful…
2. 18 Share Tips – 3 March 2014: 18 Share Tips to BUY, SELL & HOLD from…
3. Positive on gold – gold stocks and ETF ideas: Emerging-market problems will prompt investors…
4. Betting on the Aussie Dollar – but which way?: When all markets are moving in the same…
6. Cinema giant Hoyts heads to float: Cinema company Hoyts Group is again considering…
7. Top 10 shorted stocks: Each day we feature the top 10 shorted stocks…
8. Stocks on a roll: ASX rolling 52-week highs for the previous…
9. Stocks on the slide: ASX rolling 52-week lows for the previous…
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.
