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James Samson, Lincoln Indicators

BUY RECOMMENDATIONS

NRW Holdings (NWH)

Chart: Share price over the year to versus ASX200 (XJO)

After reporting a record result recently, it’s clear this mining and civil services supplier has the underlying fundamentals to drive growth, despite speculation of a slowdown in mining capital expenditure. Company guidance points to revenue and earnings growth of between 15 per cent and 20 per cent in 2013. It’s tendering for about $4.6 billion of further work.

Miclyn Express Offshore (MIO)

Chart: Share price over the year to versus ASX200 (XJO)

A vessel operator servicing the growing offshore oil and gas markets in Australia and South East Asia. Its impressive full year financial report showed strong vessel utilisation rates. The company’s bright future is underpinned by strong LNG investment by energy companies.

HOLD RECOMMENDATIONS

iiNet (IIN)

Chart: Share price over the year to versus ASX200 (XJO)

Earnings accretive acquisitions have contributed to a strong 2012. The company’s increasing scale and market position are promising. But for the moment, this internet service provider appears fully priced. But as a strong competitor, we believe it can only benefit from the roll out of the National Broadband Network.

Skilled Group (SKE)

Chart: Share price over the year to versus ASX200 (XJO)

SKE is focusing much more on providing workforce services to the resources sector rather than across the board. With less debt and increasing cash flow, this company is set to grow.

SELL RECOMMENDATIONS

Fairfax Media (FXJ)

Chart: Share price over the year to versus ASX200 (XJO)

The rapidly changing communications landscape is bruising traditional media. With no signs of a let-up in the transition from traditional print media to the digital world, the establishment and effectiveness of pay walls to capture online revenue remains unproven.

Bank of Queensland (BOQ)

Chart: Share price over the year to versus ASX200 (XJO)

Queensland is its major customer base, but the state’s lending market appears stagnant. We believe bad and doubtful debts may grow. Net interest margins are tightening. Time to move on.

 

Sean Conlan, Macquarie Private Wealth

BUY RECOMMENDATIONS

Amcor (AMC)

Chart: Share price over the year to versus ASX200 (XJO)

We have increased our price target to $8.10 a share, mostly due to stronger forecast free cash flow and marginally lower net debt. We remain attracted to relative earnings certainty, a management team that’s delivering and a solid dividend yield. The packaging giant was trading at $7.35 on August 30.

Miclyn Express Offshore (MIO)

Chart: Share price over the year to versus ASX200 (XJO)

MIO is a leading offshore oil and gas service vessel company across Asia and the Middle East. It has a 30-year track record of service to the offshore industry. The company’s near-term strategy is to leverage a relatively young and diverse fleet and to consolidate and grow positions in key markets.

HOLD RECOMMENDATIONS

Virgin Australia (VAH)

Chart: Share price over the year to versus ASX200 (XJO)

We believe the Virgin strategy is the right one, and has been responsible for restoring the company to sustainable profitability. Etihad acquiring a further 5 per cent should provide near-term support for the share price, but relative to the increasing threats of a resurgent fuel price and a more responsive Qantas on the domestic front.

Bendigo and Adelaide Bank (BEN)

Chart: Share price over the year to versus ASX200 (XJO)

While we see further incremental upside in 2013 earnings. BEN has a strong balance sheet, but we believe the company is fairly priced at current levels. On August 30, the shares were trading at $7.72.

SELL RECOMMENDATIONS

St Barbara (SBM)

Chart: Share price over the year to versus ASX200 (XJO)

We are now more attracted to long-term upside than we have been for some considerable time. But we see the operational pressures from Allied Gold Mining’s assets weighing on the stock in the foreseeable future.

Primary Health Care (PRY)

Chart: Share price over the year to versus ASX200 (XJO)

Our long-held concerns for PRY remain: unusual accounting, which serves to boost profit well above what we believe is underlying earnings; risk to medical centre earnings from rising general practitioner churn and a tightening GP recruitment market.

 

James Georges, Patersons Securities

BUY RECOMMENDATIONS

Prana Biotechnology (PBT)

Chart: Share price over the year to versus ASX200 (XJO)

Development of its PBT 2 drug for treating Alzheimer’s and Huntington’s diseases has provided encouraging responses during clinical phase 2 trials. This company has the potential to tap into a multi-billion dollar pharmaceutical market if the trials prove successful. A speculative buy.

Australian Agricultural Company (AAC)

Chart: Share price over the year to versus ASX200 (XJO)

This company has the ability to stage a major turnaround on the back of improving beef prices, more rain and the construction of a processing/slaughterhouse facility in Darwin. Then add America into the mix because it’s suffering one of its biggest droughts in recent history.

HOLD RECOMMENDATIONS

Australian infrastructure Fund (AIX)

Chart: Share price over the year to versus ASX200 (XJO)

The Federal Government’s Future Fund has made a $2 billion bid for this company’s Australian airport assets and its interests in European airports. The offer is $3.22 for each AIX security. While we don’t believe there will be a rival bidder, hold, at least, until the share price rises above the bid. On August 30, AIX shares were trading at $3.09. 

Patties Foods  (PFL)

Chart: Share price over the year to versus ASX200 (XJO)

We like this pastry maker as it offers a relatively positive outlook given its strong brands and market share. Higher input costs may present challenges. As the company expects tough trading conditions going forward, we have placed a hold on this stock.

SELL RECOMMENDATIONS

Ramsay Health Care (RHC)

Chart: Share price over the year to versus ASX200 (XJO)

Ramsay Health Care’s recent result was driven by a strong performance across Australian hospitals and a positive contribution from the company’s UK operations. As a result of recent share price strength, we have downgraded RHC from a hold to reduce.

Coca-Cola Amatil (CCL)

Chart: Share price over the year to versus ASX200 (XJO)

This company has a strong track record. Revenues grow as new products, including alcoholic beverages, are added to its portfolio. Brand power supports price increases over time, and Indonesia adds an additional growth stream. But the discount cash flow valuation is now below what has been a rising share price. So we believe it’s over-valued. Reduce.

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.