18 Share Tips – 9th September 2024

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Harrison Massey, Argonaut

BUY RECOMMENDATIONS

BUY – Turaco Gold (TCG)

Turaco has announced its maiden mineral resource estimate of 2.52 million ounces of gold at its Afema project in South-eastern Cote d’Ivoire. Sixty per cent of the maiden resource was reported in the indicated category, illustrating a high level of confidence in the reported figure. Metallurgical test work met expected recovery levels. The maiden resource is expected to grow substantially with ongoing resource drilling. I own shares in TCG.

BUY – Whitehaven Coal (WHC)

The company announced it had entered into separate binding agreements to sell a 30 per cent stake in its Blackwater coal mine for $US1.08 billion. The sale should significantly de-risk the balance sheet in the near term. This major coal producer is likely to remain a dominant player in the absence of new coal mines being commissioned in the future.

HOLD RECOMMENDATIONS

HOLD – Mineral Resources (MIN)

MIN posted an underwhelming result for fiscal year 2024. Revenue increased 10 per cent on the prior corresponding period, but underlying net profit after tax fell 79 per cent. There was no final dividend.  The company is expected to receive $A1.2 billion from selling a 49 per cent interest in its Onslow iron haul road. The Onslow iron ore project shipped first ore in May 2024 and mining has continued to ramp up. In our view, MIN is worth holding at this point.

HOLD – Domino’s Pizza Enterprises (DMP)

Earnings before interest and tax in Australia, New Zealand and Europe were up in fiscal year 2024, but down in Asia. Group network sales were up 4.6 per cent on the prior corresponding period, but net profit after tax fell 1.9 per cent. A likely easing in inflationary pressures in fiscal year 2025 should reduce pressure on the cost of inputs, such as wheat and tomatoes. In our view, a potentially increasing share price in the next 12 months depends on growth in Australasia and Europe. DMP is worth holding at these deflated levels.

SELL RECOMMENDATIONS

SELL – National Australia Bank (NAB)

The bank sustained a stable net interest margin in the third quarter of fiscal year 2024, which was supported by higher interest rates. While the Reserve Bank of Australia may hold off lowering the cash rate this calendar year, margin pressures in NAB may emerge when the RBA eventually cuts rates in calendar year 2025. This could lead to lower earnings per share. Recently trading on a price/earnings multiple of 17 times, the NAB appears overvalued, in our view.

SELL – Ansell (ANN)

ANN makes personal protection equipment for healthcare and industrial workplaces. The company reported a 48.4 per cent fall in net profit in fiscal year 2024 when compared to the prior corresponding period. Full year dividends were also lower. The share price has risen from $21.55 on November 1, 2023 to trade at $29.75 on September 5, 2024. It might be worthwhile for investors to consider taking a profit at these levels.

Tony Locantro, Alto Capital 

BUY RECOMMENDATIONS

BUY – Radiopharm Theranostics (RAD)

RAD is a clinical stage biopharmaceutical company. The company is developing a platform of innovative radiopharmaceutical products for diagnostic and therapeutic applications. Nasdaq-listed company Lantheus Holdings agreed to contribute $A7.5 million to a RAD capital raising of $A70 million. The first patient has been dosed in a phase 1 therapeutic non-small cell lung cancer trial. RAD is well funded to embark on its exciting clinical trial programs. RAD is a high risk investment, in our view. The shares were trading at 3.3 cents on September 5.

BUY – Lion Selection Group (LSX)

LSX invests in high growth mineral companies. LSX provides broad exposure to the mining sector for investors with a higher risk profile, but exposure offers less volatility than individual mining investments. It had net cash of $52.8 million at August 31, 2024. The share price continues to trade at a discount to its post-tax valuation of around 64 cents. The shares were priced at 47.5 cents on September 5.

HOLD RECOMMENDATIONS

HOLD – Maronan Metals (MMA)

The Maronan deposit in the Cloncurry region of Queensland is one of Australia’s biggest and highest-grade undeveloped silver resources. The company recently reported a standout intercept at Eastern Horizons, including 23.32 metres at 5 per cent lead and 175 grams a tonne of silver (310 grams a tonne of silver equivalent). The strategy is to increase confidence in the resource through further drilling. In our view, MMA is highly speculative with medium term growth potential.

HOLD – Red Metal (RDM)

RDM has made a potentially significant rare earth oxide discovery near Mount Isa in Queensland. Sybella is potentially a world-first deposit hosted in granite. A heap leach processing option may prove feasible. RDM also has an exciting suite of high risk, high reward exploration projects in a strategic alliance with BHP Group.

SELL RECOMMENDATIONS

SELL – Ramsay Health Care (RHC)

RHC is Australia’s biggest private hospital operator. It also operates in the UK and Europe. Revenue from contracts with customers of $16.66 billion in fiscal year 2024 was up 7.3 per cent in constant currency on the prior corresponding. However, earnings before interest and tax of $997.6 million were down 1.8 per cent. The shares have fallen from $56.47 on March 6 to trade at $39.84 on September 5. Generating earnings growth in the UK in fiscal year 2025 will be challenging.

SELL – Harvey Norman Holdings (HVN)

The retail giant reported a profit before tax of $541.69 million in fiscal year 2024, down 30.2 per cent on the prior corresponding period. Total revenue of $4.11 billion was down 3.9 per cent. The company faces fierce competition in Australia’s challenging discretionary retail environment impacted by soaring cost of living increases. Investors may want to consider reducing holdings.

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Dylan Evans, Catapult Wealth

BUY RECOMMENDATIONS

BUY – ResMed Inc (RMD)

ResMed makes medical devices to treat sleep apnoea. The company increased revenue by 11 per cent in fiscal year 2024 on a constant currency basis when compared to the prior corresponding period. The gross margin improved 90 basis points to 56.7 per cent. Income from operations increased 17 per cent. The shares have performed strongly in calendar year 2024. Sleep apnoea is a relatively under-diagnosed condition, and ResMed is well positioned to benefit from this growing market for years to come.

BUY – Brambles (BXB)

Brambles is an integrated supply chain logistics giant. It’s full year 2024 result was strong. Underlying profit and basic earnings per share from continuing operations were both up 17 per cent on the prior corresponding period. The company announced an increase in its dividend payout ratio and an on-market share buy-back of up to $US500 million in fiscal year 2025, subject to market conditions. Brambles has been building momentum in the past few years. Despite a rally in its share price, Brambles still looks cheap compared to its peers.

HOLD RECOMMENDATIONS

HOLD – ASX Limited (ASX)

Ultimately, we’re attracted to the ASX as a long-term investment due to a near monopoly position in a market that’s supported by a growing superannuation pool. The shares have risen from $61.22 on August 30 to trade at $63.05 on September 5. The financial markets operator posted a statutory net profit after tax of $474.2 million in fiscal year 2024, an increase of 49.4 per cent on the prior corresponding period. Operating revenue of $1.03 billion was up 2.4 per cent.

HOLD – Goodman Group (GMG)

This integrated industrial property group reported a solid fiscal year 2024 result. It increased operating profit by 15 per cent on the prior corresponding period. The fundamentals for developing industrial properties are positive, with demand for warehouse and logistics space well supported by growth in e-commerce. Goodman is expanding into developing data centres, which we see as an attractive avenue for further growth.

SELL RECOMMENDATIONS

SELL – Magellan Financial Group (MFG)

The fund manager delivered a statutory net profit after tax of $238.8 million in fiscal year 2024, up 31 per cent on the prior corresponding period. However, average funds under management of $36.8 billion were down 25 per cent. Funds under management have plunged from more than $100 billion in June 2021. The share price has also plunged since 2021. Improving performance is going to take time.

SELL – Domino’s Pizza Enterprises (DMP)

One of the attractions of Domino’s has been its market leading technology. But DMP is facing growing competition from delivery apps, such as Uber Eats, which also gives customers access to a wide range of easy delivery options on their phones. It’s difficult to see Domino’s growing strongly in the face of this competition and a tighter discretionary spending market. The shares have fallen $59.28 on January 2 to trade at $30.03 on September 5.

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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.