Michael Gable, Fairmont Equities
Pact Group Holdings (PGH)
A packaging maker with operations in Australia, New Zealand and Asia. Apart from acquisitions, there are numerous opportunities to support revenue growth, such as new product development, cross selling and gaining market share from competitors in a market that remains fragmented. The stock is still in an uptrend and is getting quite close to trend line support, so over time it should continue to head higher.
The retail giant is heading towards strong support, which we have near $28. Targets among brokers vary widely, but on average it’s sitting at fair value. An imminent dip to $28 could see some buying of the stock, which, as a mature business, still pays a healthy dividend to those looking for yield. The shares closed at $29.01 on March 19.
McMillan Shakespeare (MMS)
The recent break of the downtrend for this salary packaging services company happened in February. However, you will notice the share price has stalled in the past few weeks. The market appears undecided about where it wants to send the share price. The $12 area is providing some resistance. But it’s encouraging the share price hasn’t hastily retreated towards the breakout zone near $11. Breaking through $12 could see the stock trade towards $14. The shares finished at $11.81 on March 19.
DLX has strong fundamentals and margins have been resilient. The balance sheet is strong enough to support acquisition opportunities. The stock is at fair value, although we would buy on any dip. The uptrend is still looking strong, so it’s worth holding at current levels.
We’re not a fan of buying energy stocks after the recent fall in the oil price. AWE appears to be in trouble from a charting perspective. After bouncing back from the lows in December, it’s failed at key trend line support in the mid $1.40 levels. With the shares struggling here, we expect it to take out the December low and we could possibly see it trade below $1. The shares finished at $1.22 on March 19.
Origin Energy (ORG)
From the low in January, it appears ORG has made a five wave advance, almost hitting $13. At the moment, it appears to be making a three wave correction against this, which would bring it down towards $11.20. That would also happen to see it fill the gap created in early February. That could be considered an entry point. Otherwise if it bounces up towards $11.80 and fails, then it could breach that $11.20 support level and head back into the mid $10 region. The shares closed at $11.60 on March 19.
Janine Cox, Wealth Within
Fairfax Media (FXJ)
As the media giant has struggled to break through a psychological resistance level around $1, it needs a strong weekly close above this level to rise to about $1.20 later this year. From a technical perspective, stronger support for a rise would be created if the price first falls to around 88 cents before moving higher. The shares finished at 95.5 cents on March 19.
Primary Health Care (PRY)
Changes to Medicare that would affect its bottom line weighed on the PRY share price. But with the Medicare fiasco in the past, the share price now has an opportunity to move higher. PRY is likely to break the 2013 high of $5.43 this year. The shares closed at $5.07 on March 19.
There’s a saying, “cut losses short and let profits run”. In the case of RMD, profits have been running, with share price gains above 30 per cent this year, helped along by a falling Australian dollar and company results that met analyst estimates. This medical device company is still trending strongly, and if the Australian dollar continues towards my target zone between 71 cents and 74 cents, this will support the price.
ANZ Bank (ANZ)
ANZ continues to make new highs. Although the gains may slow this year, investors will continue to want bank shares with good dividends. My medium term price targets haven’t been reached. Despite the negative talk and the probability of short term volatility, I believe that banks have further to go in the medium term.
Toll Holdings (TOL)
TOL is yet another Aussie icon to be swallowed up by an overseas player. With any takeover, you weigh up risk and reward. The takeover still has to tick all the regulatory boxes, and shareholders should consider how long your capital will sit there while you wait for a small upside between the current price and the offer. Consider the pros and cons of this transport logistics giant. The shares closed at $8.79 on March 19.
OZ Minerals (OZL)
OZL recently broke an important hurdle at around $4 and is currently trading sideways. However, OZL can move quickly in either direction without much warning. Therefore, if it closes strongly below $3.50, you ought to ask yourself, why continue to hold? Shares in this copper and gold company closed at $3.77 on March 19.
Joshua Stega, JAS Wealth
Sims Metal Management (SGM)
SGM is one of the largest recycling operators in the world, sourcing 70 per cent of its earnings outside Australia. With the US consumer showing signs of life, a lower Australian dollar and cost rationalisation, the medium term outlook is promising. SGM’s 2015 first half result confirmed benefits from its strategic plan, with underlying earnings before interest and tax of $90.9 million, well above the prior corresponding result of $67.6 million. Importantly, SGM has taken steps to improve inventory management, leaving it less likely to get caught when raw material prices change. A good opportunity to buy.
Origin Energy (ORG)
Offers investors exposure to growing energy demand in Australia and Asia. The outlook is brighter on the back of organic growth and cost reduction initiatives. On a recent price/earnings multiple of 19 times and a dividend yield of 4.3 per cent, we’re buyers of this high quality energy company.
Corporate Travel Management (CTD)
Manages travel arrangements for private and publicly listed companies. CTD is progressing with its strategy of taking market share, acquiring, integrating and generating scale. The recent result demonstrated the company is generating growth organically and through acquisitions. However, in our view, the valuation is clearly stretched. We don’t advocate taking profits just yet, but we remain prepared to do so on any weakness.
Provides a broad spectrum of wealth management and financial service solutions. Given a strong performing share price, we’re now quite cautious on what we see as low medium term earnings growth. We’re holders of the stock at current levels. The recent dividend yield was about 4 per cent.
Recent commentary suggests a strategic review of supermarkets is taking place and we look forward to the outcome. The other issue is the turnaround of the home improvement division with Masters expected to break even in fiscal year 2019. We’re sellers of WOW at current levels and will look to buy this blue chip stock back at lower prices.
ASX Limited (ASX)
A quality company with high margins, healthy cash flow generation and a strong competitive market position. Recent share price performance has been exceptionally strong, which, in our view, has left a stretched valuation. The ASX has been outperforming the broader market.
Please note. Origin Energy and Woolworths are buys and sells this week as analysts take different perspectives.
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.