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Joshua Stega, JAS Wealth

BUY RECOMMENDATIONS

Westpac Bank (WBC)

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

It’s well capitalised, providing a relatively low credit risk profile and above average leverage to any recovery in Australian loan growth. In a low credit growth environment, cost management has become paramount and Westpac is no exception. Recent initiatives include a 25 per cent reduction in branch footprint, a 20 per cent reduction in property and ATM lease costs, shared services, product rationalisation and an increasing focus on digital capability. It’s hard to go past the Aussie banks. Recently trading on a price/earnings ratio of 15 times and a dividend yield of 5.6 per cent, we’re still buyers of WBC.

Ainsworth Game Technology (AGI)

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

Designs and makes electronic gaming machines. We are upgrading our rating from fair value to undervalued. This results from underperforming the ASX200 by 8 per cent in the past month. AGI is expanding in the US, but the growth trajectory is expected to be uneven. Australia still accounts for 74 per cent of EBIT and its products continue to be the preferred purchase for most venues, with some further sales potential in the hotel space. Recently trading on a price/earnings multiple of 19.3 times amid a return on equity of almost 30 per cent, we feel this is a good time to start accumulating.

HOLD RECOMMENDATIONS

Skycity Entertainment Group (SKC)

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

Owns and operates casinos and entertainment centres in New Zealand and Australia. Overall, we are positive about SKC’s defensive earnings stream and its long dated licences. The business is positioned to grow earnings as market conditions improve.

InvoCare (IVC)

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

Owns and operates funeral homes, cemeteries and crematoria across Australia, New Zealand and Singapore. Due to the exceptionally resilient nature of IVC’s business, we’re always looking to top our holdings when the price is right. Recently trading on a price/earnings multiple of 24 times and a yield above 3 per cent, we are holders rather than buyers.

SELL RECOMMENDATIONS

Recall Holdings (REC)

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

Recall provides secure storage solutions for all major media, and has operations across 23 countries. Opportunities exist to grow market share, but the industry is facing long term structural change as businesses embrace new technologies. Recall’s earnings growth and valuation depends on the extent to which it expands into the digital storage world and how well it executes. Recently trading on a price/earnings multiple of 17.46 times, we think this stock is overvalued considering the challenges it faces.

DUET Group (DUE)

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

Owns energy utility assets in Australia and the United States. Most revenues are regulated or under long-term contracts, providing predictable and stable earnings until the next regulatory reset or contract expiry. Growth is driven by rising populations, energy intensity and industrial activity. But we’re concerned about rising global interest rates, which could adversely affect the profitability of these highly geared utility businesses.

 

Janine Cox, Wealth Within

BUY RECOMMENDATIONS

Independence Group NL (IGO)

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

IGO recently broke above a longer term down trend indicating upward potential. Being outside the top 100 means lower liquidity and higher risk. Given this, more confirmation is warranted to mitigate the chance of a decline back to between $3 and $3.30, therefore look for the trend continuing above $4.30. It was trading at $4.19 on April 17.

Mount Gibson Iron (MGX)

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

MGX could go either way right now and thumbs down by a major shareholder could see the price tumble. I’d like to see a very strong close above historical resistance around 95 cents to boost confidence in medium to long term potential. It was trading at 83 cents on April 17.

HOLD RECOMMENDATIONS

David Jones (DJS)

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

Shareholders have been offered $4 a share. While I don’t want to see another Aussie icon fall into foreign hands, it’s fitting with the government’s open door policy. My share price target is between $4.02 and about $4.50, so a $4 bid is a good offer. Hold while the dust settles, with a view to sell.

Beach Petroleum (BPT)

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

BPT recently broke resistance at around $1.60, indicating the stock is entering a new phase of growth and is likely to continue higher in the medium term. Long term support is $1.45 and it will be important to see that this level holds. The shares were trading at $1.69 on April 17.

SELL RECOMMENDATIONS

Coca-Cola Amatil  (CCL)

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

Proceeding with a profit downgrade on the morning after a 200 point fall on the US market is in who’s interest? Perhaps, the big money looking for volatility, but not investors. The last time a significant run occurred on CCL, it zigzagged down for four years.

Crown Resorts (CWN)

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

Fitting with the view that just after the best news a share will often fall, the Packer empire received applause in a full page spread, while CWN’s share price formed a short to medium term top, with the potential decline to between $13.80 and $14.80 for the second half of 2014. Consider taking some money off the table.

 

Les Szancer, Paradigm Securities

BUY RECOMMENDATIONS

OncoSil Medical (OSL)

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

OncoSil is developing an implanted device that emits radiation into a tumour without damaging healthy surrounding tissue. First target for commercialisation is pancreatic cancer. Offers potential and worthy of consideration for investors with an appetite for risk.

Truscott Mining  (TRM)

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

A gold and base metals explorer at Tennant Creek – an historically proven gold area. This is one of those rare junior miners with a low number of shares on issue. Directors have their own skin in the game. Other major targets offer potential upside.

HOLD RECOMMENDATIONS

Condor Blanco Mines (CDB)

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

Last time I recommended this stock as a buy, it was trading around half a cent. Things are starting to fall in place for this diversified mining company. A $10,000,000 Euro bond has enabled the company to sign agreements with a massive potential coking coal company in South Africa and to commercial an iron ore tailings project in Chile. It closed on April 16 at 1.5 cents.

Liquefied Natural Gas (LNG)

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

The company has several subsidiaries. Its main asset is the development of a 3.8 million tonne LNG plant in Gladstone, Queensland. Its wholly owned US subsidiary Magnolia potentially adds another 8 million tonnes. Company plants are efficient and capital expenditure is well under control.

SELL RECOMMENDATIONS

ANZ Bank (ANZ)

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

A great company posting nice profits. So why sell? Since June last year, it has run up from $26.50 to trade at $33.89 on April 17. It’s hit a double top and it might be a good time to take profits. It could potentially drop back to $32 and, if it falls through that, even down to around $29. At $29, it could be a buying opportunity again.

Lynas Corporation (LYC)

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

I think the time has come to sell this rare earths company. The share price continues on a downward trajectory.

Chairman Nick Curtis has substantially reduced his share holdings since December. Rare earths is a long winded project so you need plenty of patience.

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.

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