Sean Conlan, Macquarie Private Wealth


Fortescue Metals Group (FMG)

Market fundamentals remain positive, with steel production and prices increasing and iron ore exports declining. We would see any weakness following a further iron ore price correction as a buying opportunity. We believe FMG offers leverage to short-to-medium term iron ore price strength, combined with capital-efficient expansion plans.

David Jones (DJS)

DJS is a unique business in that despite significant disruption to household consumption growth and, in particular, retail trade between 2009 and 2011, it has the ability to produce profit growth. As a multi brand, high-end lifestyle retailer, mixed with financial services capability, it has the potential to stretch brand value beyond the merchandise book multiple.


Virgin Blue Holdings (VBA)

We believe the number of recent earnings downgrades will make it hard for Virgin to outperform the market in the short term, yet further weakness in the share price looks limited given the airline is trading below book value.

Spark Infrastructure Group (SKI)

Spark’s result was solid at the asset level and the clear leverage target is a positive for investors. However, the challenge remains in that de-gearing and dividend growth struggle to go hand-in-hand. Spark is a yield stock. The yield will give a market return, but with limited yield growth.



Minimal margin uplift supports our view that plasma contract sentiment has been overdone. CSL, in our view, remains expensive given its growth profile. We remain cautious about the medium term outlook given additional uncertainty from changing market dynamics.

Computershare (CPU)

CPU remains a strong, globally diversified company. However, we believe we are heading in to a more non-synchronised economic environment, where global economic growth is patchy, particularly across the western world. In the absence of further acquisitions, we see continuing potential for a rebasing of CPU’s earnings and price/earnings multiple in a new, lower activity environment.


Peter Day, Wilson HTM


Wesfarmers (WES)  

We have just reviewed our commodity forecasts for this diversified industrial giant and it’s a surprise on the upside. We forecast a 44 per cent increase in coal division earnings, reflecting a 10 per cent overall earnings upgrade. We believe there’s 30 per cent upside to our valuation given coal price strength and expectations for continuing improvements in the Coles business.

Imdex (IMD)

Imdex is a dominant player in mineral drilling fluids and the down-hole instrumentation industries. IMD is leveraged to global mining exploration expenditure, which is expected to be strong going forward. Margins are likely to improve. We expect earnings per share growth of 125 per cent and 35 per cent in 2011 and 2012 respectively.


Premier Investments (PMV)

An investment company that owns the consumer brands Just Jeans, Jay Jays, Portmans, Jacqui E, Peter Alexander, Dotti and Smiggle. Former David Jones chief executive Mark McInnes has been appointed CEO of Premier Retail. We expect McInnes will announce his strategic plan to the market in three-to-six months.

OrotonGroup (ORL)  

Designs and makes luxury leather goods and accessories. The domestic growth profile of about 10 per cent per annum over the next few years has the potential to grow exponentially if its foray into Asia is successful.


Boral (BLD)  

We believe there’s acquisition risk for this building materials company given the firm’s intention to expand. We believe the share price isn’t justified amid the stock’s valuation appearing too expensive when compared to its peers.    

Incitec Pivot (IPL)  

We have raised our full-year 2011 earnings forecast by 28 per cent to reflect higher global fertiliser prices. But we believe the risks to soft commodity and fertiliser prices are to the downside given increasing planting intentions, improving seasonal conditions and rising global interest rates.


Cleo Nanni, Novus Capital


Extract Resources (EXT)

Extract is an emerging uranium producer focusing on the Rossing South deposit in Namibia. Rossing South is in feasibility and first production is expected in 2014. Extract aims to produce 15 million pounds of uranium annually, which would make it one of the world’s largest mines. The share price has fallen substantially due the catastrophe in Japan, paving the way for a value buy.

Deep Yellow (DYL)

Deep Yellow is a uranium explorer with licences and project acquisition plans across Australia and Namibia. As with Extract Resources, this is an opportunity to buy at lower levels than real value.


David Jones (DJS)

David Jones operates a chain of 38 retail stores selling exclusive brands of clothing, accessories and homewares. The demographic is mostly high-end income earners. A reduced cost base has put DJS in a sound position to capitalise on a rebound in consumer spending. My price target is $5.20. The price was $4.64 in early morning trade on April 7, 2011.

Woolworths (WOW)

One of Australia’s most successful and consistent retailers. Clever marketing campaigns, such as the “Fresh Food People”, has contributed to its success. My price target is $30. Hold for that level. The share price was trading at $26.98 on April 7.


Virgin Blue Holdings (VBA)

The recent poor result left the share price at almost 12 month lows. A profit downgrade of between $30 million and $80 million is very significant. A share price retreat to last year’s lows of 28 cents is possible. It was trading at 30.5 cents on the morning of April 7.

M2 Telecommunications Group (MTU)

M2 is an independent provider of fixed line, mobile and data telecommunications services, specifically aimed at small and medium sized businesses. This company’s success has been substantial, with the shares rising from $1.50 to $4 in the past 12 months. It may be time to take some profits. Look to buy again closer to $3. It was trading at $3.55 on April 7.


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