Janine Cox, Wealth Within
BUY RECOMMENDATIONS
BHP Billiton (BHP)
Chart: Share price over the year versus ASX200 (XJO)
BHP is the lower risk option, being highly diversified for those looking for exposure to the materials sector. Having recently broken resistance between $37.50 and $38, this indicates higher prices over the medium term.
Virgin Australia (VAH)
Chart: Share price over the year versus ASX200 (XJO)
Airlines sit at the bottom of my watch list, but in recent months Virgin has created the potential for a long term breakout. A move above 45 cents will indicate that Virgin is destined for clearer skies. The shares finished at 40.5 cents on August 6.
HOLD RECOMMENDATIONS
Asciano (AIO)
Chart: Share price over the year versus ASX200 (XJO)
In July, AIO, one of Australia’s big industrial stocks, broke through resistance at $5.80 to indicate the long term trend will continue and that share price growth is likely to be double digits over the coming years.
AMP (AMP)
Chart: Share price over the year versus ASX200 (XJO)
Reading the AMP share price can be a challenge, but one thing is clear. When AMP trades around $5.50, the market is reluctant to pay more. However, a buy above $5.50 may soon be justified, provided the price first falls to around $5.10 in the current quarter.
SELL RECOMMENDATIONS
QBE Insurance Group (QBE)
Chart: Share price over the year versus ASX200 (XJO)
QBE continues to disappoint the market. It’s facing a possible class action over allegations it breached disclosure obligations by not reporting updates at the time it was known. An important support level at $10 may be breached, so my advice would be to steer clear of QBE.
Editor’s note. QBE Insurance has publically denied the allegations.
IOOF Holdings (IFL)
Chart: Share price over the year versus ASX200 (XJO)
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IFL has seen no real value increase since early 2013. The risk has been increasing that the price will decline, justifying a stop loss below $8.16, which it hasn’t yet triggered. A strong weekly close above $9.20 will see risk fall. The shares finished at $8.87 on August 6.
James Samson, Lincoln Indicators
BUY RECOMMENDATIONS
Navitas (NVT)
Chart: Share price over the year versus ASX200 (XJO)
Provides tertiary education services, university pathway programs and English training courses mostly to overseas students. This may not be one for faint hearted, but following NVT’s recent contract loss announcement with Macquarie University, the share price has tumbled. With that contract continuing into fiscal year 2016, and the company expecting to achieve the necessary growth to replace lost earnings from fiscal year 2017, we believe the recent price decline might be an opportunity for investors to gain entry to the strong theme of tertiary education services.
Tox Free Solutions (TOX)
Chart: Share price over the year versus ASX200 (XJO)
A waste management business with a growing national footprint. The company has been on Lincoln’s radar for some years as it’s consolidated a fragmented waste management market via acquisitions. Following several larger acquisitions in recent years, the business has been a little quieter on the purchasing front, instead choosing to bed down and digest acquisitions by integrating their operations. We believe TOX is well placed to grow, so current price weakness provides an investment opportunity.
HOLD RECOMMENDATIONS
iiNet (IIN)
Chart: Share price over the year versus ASX200 (XJO)
IIN has become an Australian success story from its roots as a start up in WA. The share price has risen in recent times and appears fully valued. It’s focusing on margin growth and average revenue per user. While the business still has an impressive growth outlook, much of this is factored in at current prices.
Slater & Gordon (SGH)
Chart: Share price over the year versus ASX200 (XJO)
Offers legal services in Australia’s personal injury market and more recently in the UK. While the company is expected to report strong results later this month, exhibiting healthy growth, we believe a stronger Australian dollar may hinder UK earnings more than was previously anticipated. Nonetheless, SGH remains a strong business with a healthy growth outlook.
SELL RECOMMENDATIONS
Ten Network Holdings (TEN)
Chart: Share price over the year versus ASX200 (XJO)
Traditional media is continuing to be pressured as emerging technologies take advertising market share. TEN isn’t expected to turn a profit in fiscal years 2014 and 15. Consequently, a business that contains unnecessary risks for investors, in our view.
The Reject Shop (TRS)
Chart: Share price over the year versus ASX200 (XJO)
Having downgraded earnings in June, TRS is expected to report an earnings decline for fiscal year 2014. We believe the company is developing a track record of under delivering on market expectations. While reflected in the share price, we believe there’s more attractive retail exposures with better earnings growth prospects.
Darren Jackson, Calibre Investments
BUY RECOMMENDATIONS
AusTex Oil (AOK)
Chart: Share price over the year versus ASX200 (XJO)
A US based energy explorer and producer that’s seemingly cherry picking the sweet spots on the Mississippian Lime where it operates. Subsequently, oil production has steadily increased month on month and economics involving wells are robust. Expect an uplift in valuation with future well success and production.
Capilano Honey (CZZ)
Chart: Share price over the year versus ASX200 (XJO)
A pure honey play, it’s strategically important because honey from China is suspected of being either contaminated or non-original. Despite difficult operating conditions this year, Capilano posted solid results showing its restructure and acquisition of Wescobee has worked.
HOLD RECOMMENDATIONS
Mobile Embrace (MBE)
Chart: Share price over the year versus ASX200 (XJO)
The mobile commerce space has been experiencing strong tailwinds and Mobile Embrace has been no exception. It reported earnings growth of 195 per cent this financial year. MBE was recently trading on an EV/EBITDA of less than 24 times, which is by no means cheap. However, if you forward out 3 years or more and, with the current growth rate, this is when real value emerges.
Lamboo Resources (LMB)
Chart: Share price over the year versus ASX200 (XJO)
Having recommended buying LMB in March this year and participating in the placement at 28 cents, we still continue to hold the stock, which closed at 76.5 cents on August 6. Lamboo recently announced a merger with China Hengda, which uniquely positions it to mine graphite and process it into graphene.
SELL RECOMMENDATIONS
Liquefied Natural Gas (LNG)
Chart: Share price over the year versus ASX200 (XJO)
Take profits. LNG is a developer of innovative natural gas export facilities. The stock is up a mammoth 1000 per cent this calendar year, however earnings really need to play catch up to the current $1.5 billion valuation. A lot of domestic fund managers have been selling, while the big buyers have been US hedge funds where the stock has been heavily promoted.
Crown Resorts (CWN)
Chart: Share price over the year versus ASX200 (XJO)
Previously, Crown was universally loved by the analyst community, however, only recently, several broker downgrades have appeared. The Macau gaming sector is facing headwinds from high rollers gambling less, government restrictions on capital outflows and a serious crack down on corruption. Crown’s recently announced expansion into Las Vegas also carries additional downside risk.
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.
