11min read
PREVIOUS ARTICLE 18 Share Tips - 13 October 201... NEXT ARTICLE 18 Share Tips - 27 October 201...

Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

ANZ Bank (ANZ)

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

We’re looking ahead to November’s ex dividend date, and with ANZ recently trading on a 5.5 per cent yield plus franking, we expect some buying support to return. The charts suggest support. Any strengthening in the Australian dollar will see these yield stocks get snapped up again. We’re looking at a covered call strategy to help hedge any post-dividend weakness.

Magellan Financial Group (MFG)

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

With the recent fall in the Australian dollar, investors have started searching for stock opportunities with US dollar earnings. In MFG, we have a stock that’s invested in overseas markets, which are outperforming Australia. This helps explain why such a market sensitive stock held up well during the recent pull back. A recent confirmation that funds under management increased last month is an added bonus that makes us confident that MFG is a buy at these levels.

HOLD RECOMMENDATIONS

McMillan Shakespeare (MMS)

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

On the back of impressive results in August, the share price shot up and broke its 12-month down trend. Recent market weakness saw it retreat to re-test that down trend line, so it has the potential to rally from here. The company is still undervalued stemming from last year’s suggested changes to the FBT from the former Federal Government. Value is closer to mid $12 levels. The shares closed at $9.88 on October 15 so a top up buying opportunity exists.

Woolworths (WOW)

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

Recent share price weakness has left WOW undervalued. With consensus targets closer to $36, WOW has become oversold on the charts and was recently sitting at support. This support level is where WOW broke out of a continuation pattern earlier in the year, so a successful re-test and bounce here could see WOW strengthen through the rest of the year.

SELL RECOMMENDATIONS

Worley Parsons (WOR)

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

We have advised avoiding the engineering services sector for some time. WOR’s share price has mostly traded between about $15 and $19 this year. Recent weakness has seen it break through support on high volume. This price action now suggests WOR could fall to lower levels. Support now exists in the $12-to-$13 region, levels seen at the lows of the GFC. The shares finished at $14.32 on October 15.

Cochlear (COH)

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

The COH chart suggests to us that lower levels will be reached in the next month or so. After peaking above $73 in September, the stock then fell towards $66. From there it rallied again, but couldn’t overcome the 50 per cent retracement of that recent fall. Not only that, but the rally was very corrective compared to the preceding drop. That suggests to me that we will get another leg down, extending as low as $62. Shares in the hearing implant maker closed at $71.29 on October 15.

 

Peter Russell, Russell research

BUY RECOMMENDATIONS

G8 Education (GEM)

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

G8 has 5 per cent of the growing and supported childcare market with more than 350 centres across Australia and another 18 in Singapore. The tenfold share price rise in three years reflects strong and well priced acquisitions amid effective integration and capital management. The price/earnings ratio of 26 times to December should fall below 17 in 2015 with recent acquisitions. A 4 per cent franked yield is paid quarterly. Benefits of scale and reputation assist.

iProperty Group (IPP)

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

IPP is following a similar track in Asia as realestate.com (REA Group) has done here. IPP’s online real estate portals are already leaders across Malaysia, Indonesia, Hong Kong, Macau and Singapore for developers, real estate agents and consumers. Last half revenues rose 44 per cent and EBITDA turned positive, up $3.2 million with expenses flat. The move from print to online is accelerating so IPP offers serious speculative growth prospects. The sale of REA’s Hong Kong business to IPP raises REA’s stake in IPP and IPP’s status.

HOLD RECOMMENDATIONS

Greencross (GXL)

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

Another company that’s had a dramatic rise over three years, Greencross has been aggregating vet practices across Australia and New Zealand. The aptly named merger with Mammoth Pet Holdings catapulted it to being the major pet care company. Now with some 300 clinics and pet supply outlets, it still represents only 7.5 per cent of its market. Soundly based so we expect strong growth of more than 20 per cent a year. Add.

Ramsay Health Care (RHC)

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

The price has quadrupled since early 2010 reflecting management’s superb positioning and execution of its growth strategy. We expect annual earnings per share growth around 20 per cent, as Ramsay continues to build its hospital coverage in Australia and extends its key positions in France and the UK. You may need Ramsay someday – put some in your pocket now.

SELL RECOMMENDATIONS

AusNet Services (AST)

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

The renamed SP AusNet operates regulated energy delivery service networks across Victoria – the primary electricity transmission network and eastern and western gas distribution networks. It was recently yielding 6.3 per cent, a third franked. Dividends are likely to fall as the regulator resets energy tariffs.

Echo Entertainment Group (EGP)

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

Earnings are only just recovering after a disappointing three years. But we expect a likely earnings increase going forward to be barely 5 per cent with a yield moving above 3 per cent. This is hardly enough to retain the stock in a fiercely competitive gambling environment. Better investments elsewhere.

 

Janine Cox, Wealth Within

BUY RECOMMENDATIONS

Stockland (SGP)

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

During the recent market decline, many stocks have taken out prior lows so buying risk is heightened. That said, large property stocks may still present opportunities, with many due to go ex-dividend in December. Stockland is one such stock, and should there be a strong close above $4.10, we may see an opportunity to buy. The shares closed at $3.96 on October 15.

InvoCare (IVC)

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

Somewhat cushioned from economic conditions, this funeral company operates in Australia, New Zealand and Singapore. The price hit $11.75 in August, but finished at $10.86 on October 15. We would be looking for a strong close above resistance at $11.50 before buying. So keep a close eye on this stock.

HOLD RECOMMENDATIONS

Origin Energy (ORG)

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

Origin, will at times, defy the market and trade higher even if the broader market falls away. However, recently the share price pulled back in line with our market to test a strong support level. Given this, we could soon see ORG break higher and therefore it’s another one to watch.

Harvey Norman (HVN)

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

The impact of consumer confidence on company performance in the retail sector shouldn’t be under-rated. While consumer confidence is off its yearly low, it could do with a boost so retailers like HVN continue to see it reflected in sales. Technically, HVN looks good while continuing to trade within its longer term uptrend.

SELL RECOMMENDATIONS

Iluka Resources (ILU)

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

Iluka recently fell below $8 and is now attempting to recover to around $8.30. However, the chart tells a story. ILU has a big hurdle at $9 to avert a further fall. If it fails and we see a strong close back below $7.80, I read a likely swift decline to between $4.50 and $5.50 over the next six months. Shares in this mineral sands company closed at $7.73 on October 15.

Santos (STO)

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

The stock has been recently punished. When it was trading above $13, there was a reasonable probability for further gains. However, as this level has been broken and STO is now trading in a medium term decline, the price may continue to fall towards support between $11 and $11.50. The shares closed at $12.47 on October 15.

>> BACK TO THE NEWSLETTER: Click here to read other articles from this week’s newsletter

 

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.