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Cleo Nanni, Novus Capital
BUY RECOMMENDATIONS
Map Group (MAP)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
A private airport owner and operator, holding 74 per cent of Sydney Airport, 31 per cent of Copenhagen Airport and 39 per cent of Brussels Airport. The recent share price action indicates a positive change in market sentiment towards this company due to a restructuring of debt. Total half-year revenue of $472.4 million is up 4.4 per cent on the previous corresponding period. It has broken out of its 12-month sideways range of between $2.90 and $3.20. It’s now trending up so consider buying. The company was priced at $3.42 on July 21.
Redstone Resources (RDS)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
A diversified mineral exploration company, focusing on nickel and copper in central Australia’s Musgrave region, and phosphate and potash in South America’s Amazon Craton. This is a speculative buy, but recent positive drilling results at its Tollu project in Australia suggest an opportunity at good entry levels. We expect its resource to contain high copper grades.
HOLD RECOMMENDATIONS
AGL Energy (AGK)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
A major energy company, servicing a huge retail base of more than 3.2 million customers. The share price has been trading in a sideways pattern since March this year. We suggest accumulating shares around $14 levels, where it enjoys a lot of investor support. The stock was priced at $14.25 on July 21. It’s well managed and the stock should be retained as a long-term hold.
Woodside Petroleum (WPL)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
Another well-managed company, offering a strong balance sheet. We believe Woodside is a stand-out, long term growth opportunity for investors seeking oil and gas exposure. The recent volatile price indicates a great buying opportunity on dips towards $40 and below. Buy and hold.
SELL RECOMMENDATIONS
Fairfax Media (FXJ)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
A giant print and digital media business, with prestigious publications including The Sydney Morning Herald and The Age. The price action again tells a story. Disappointing profit results leave the share price trading close to global financial crisis lows. I suggest selling on any relative strength.
News Corporation (NWS)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
A powerful media conglomerate with a global presence. Even though the shares have bounced, the stock may be in for a volatile ride. One has to take a view on this company regarding the duration and likely outcomes from several inquiries into the phone hacking scandal. Mine is that continuing negative publicity will weigh on the share price. I’m inclined to sell on share price strength.
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Simon Bond, RBS Morgans
BUY RECOMMENDATIONS
Downer EDI (DOW)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
This engineering company’s share price was punished after several writedowns regarding the Waratah train project in New South Wales. But we expect several near-term catalysts (most notably Waratah’s first train acceptance by RailCorp) to begin the process of unlocking significant value in the business. A good opportunity exists here.
Coca-Cola Amatil (CCL)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
The beverage giant offers a strong medium-term growth profile driven by high return generating capital projects during the next four years. Strong brands and a wide footprint positions the business relatively well in a difficult pricing environment. Indonesia is a positive earnings driver as relative immaturity and rising incomes continue to drive strong growth.
HOLD RECOMMENDATIONS
ResMed (RMD)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
This innovative medical products maker has acquired Irish company BiancaMed, which has developed a novel, contact-free means of diagnosing sleep and breathing abnormalities. RMD has been working with BiancaMed for more than nine years and owned 12 per cent of the company prior to the acquisition. ResMed expects the acquisition to provide multiple growth opportunities.
ConnectEast (CEU)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
Owns and operates a Melbourne toll way road. Average daily trips in June increased 8.3 per cent on the previous corresponding period, with the strongest growth recorded by light commercial vehicles (+14.4 per cent) and cars (+7.9 per cent). Average daily revenue is up driven by traffic growth and longer trips.
SELL RECOMMENDATIONS
Telecom Corporation of New Zealand (TEL)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
Subject to shareholder approval, Telecom will demerge into two separately listed companies. The stock has rallied on the back of recent announcements, as we anticipated. However, on valuation grounds, we view it
as expensive and downgrade to sell.
CSG Limited (CSV)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
A technology solutions company kept busy by natural and man made disasters. CSG has been involved in a third capital raising, which is hopefully the last. We have upgraded our NPAT (net profit after tax) forecast for full-year 2011 to the mid point of guidance. But our earnings per share forecast remains unchanged due to the dilutive capital raising.
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Hamza Habib, Patersons Securities
BUY RECOMMENDATIONS
Chinalco Yunnan Copper Resources (CYU)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
Focuses on base metals, precious metals and rare earth elements. The company has projects in Queensland, Laos, and Chile. CYU has a strategic partnership with Chinese mining giant Chinalco, and has also signed a joint venture with Rio Tinto regarding highly prospective exploration properties in Chile. Successfully completing a recent capital raising, the company is continuing drilling operations with positive news flow anticipated in the next few weeks.
Cardia Bioplastics (CNN)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
Develops, makes and markets packaging products made from renewable resources in preference to traditional petroleum-based inputs. Cardia distributes in Australia, the US, Europe and Asia. The trend towards relying less on oil and more on renewables position CNN to grow as the industry expands. But this is a highly speculative stock and suitable only for investors with a strong risk appetite.
HOLD RECOMMENDATIONS
David Jones (DJS)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
Retail companies have been recently punished as shoppers hang onto their money. David Jones recently issued a profit downgrade and value was rapidly stripped from its share price. Consumer confidence is low and there’s increasing competition from online retailers. The share price should improve when shoppers feel confident enough to spend again.
Metcash (MTS)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
Metcash is a wholesale distribution and retail company, specialising in groceries, fresh produce, liquor, hardware and other fast moving consumer goods. The company hasn’t given guidance for full-year 2012, but remains optimistic about future earnings. Its IGA business experienced strong growth, which is encouraging given current market conditions are challenging.
SELL RECOMMENDATIONS
Bannerman Resources (BMN)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
A uranium explorer in Namibia and Botswana. China’s Sichuan Hanlong Group has offered 61.2 cents a share under a scheme of arrangement to acquire Bannerman. The offer seems well above fair value. The bid is highly conditional and could take some time if it happens. It’s either getting more return if the deal goes through, or selling now on market for less, but still at a premium prior to the offer. I prefer the latter option. Bannerman was trading at 42.5 cents on July 21.
News Corporation (NWS)
Chart: Share price over the year to 22/07/2011 versus ASX200 (XJO)
The international media giant is in the wars. Phone hacking has sparked several inquiries and led to high profile resignations within News Corporation and Scotland Yard. Issues facing the company are far from over and are likely to end up in court. Investors may be in for a long ride amid negative publicity fuelling downside risks.
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.
