7min read
PREVIOUS ARTICLE 18 Share Tips - 7 March 2016 NEXT ARTICLE 18 Share Tips - 21 March 2016


Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

ANZ Bank (ANZ)


Chart: Share price over the year

Bank share prices have been recovering. Recently, on an ANZ candlestick chart, there was a very bullish candle with good volumes. This suggests further upside from here. We can also see buy signals on the moving average convergence divergence (MACD) and divergence with the relative strength index (RSI). ANZ is likely to rally from here towards resistance near $29. Beyond that is resistance at $31, but that $29 zone is a selling opportunity with a view to buy the next dip.

Aveo Group (AOG)


Chart: Share price over the year

The retirement village developer and operator has spent the past few months treading water around current levels as the market was sold off. On the back of its recent half year results, the stock has broken short term resistance and is now hitting the longer term resistance level near $3.20. Price action suggests that breaking $3.20 should lead to a move up towards $3.80, which is the next major level. The shares were trading at $3.19 on March 10. 

HOLD RECOMMENDATIONS

BHP Billiton (BHP)


Chart: Share price over the year

On January 19, we sent a note to clients indicating a short term low for BHP as it was trading below $15. The past few weeks have been positive for resource stocks and BHP has bounced nicely. We can see a dip soon back to near $17, but the price action still remains positive and short term traders can look to buy that dip. Those wishing to cut BHP should hold here and wait for low $20 levels. The shares were trading at $17.71 on March 10.

Goodman Group (GMG)


Chart: Share price over the year

The property group’s stronger balance sheet and higher earnings growth forecasts appeal to us on a fundamental level. On the technical side, we can see price action starting to tighten so a solid weekly close above $6.50 could see GMG rally to above $7. The shares were trading at $6.65 on March 10. 

SELL RECOMMENDATIONS

Iress (IRE)


Chart: Share price over the year

We bought the software company for our portfolio at the end of 2015. We had an initial target of $10.50, but the stock has now broken through that resistance level after reporting very well in the past few weeks. Recently, reaching a new high at mid $11 levels, we believed the stock was expensive. We took profits. The stock was trading at $11.15 on March 10.

Brambles (BXB)


Chart: Share price over the year

Brambles has been a long term hold for us while we waited for targets near $12. It’s exceeded that target and, in our view, is expensive. There’s resistance near $12.50, and we are already seeing divergence with the RSI. There’s a possibility that BXB will head back to $11 levels. As a result, we’re happy to take profits. The shares were trading at $12.49 on March 10.


Simon Herrmann, wise-owl.com

BUY RECOMMENDATIONS 

Gold Road Resources (GOR)

Chart: Share price over the year

The pre-feasibility study indicates the Gruyere gold project is financially viable, and is expected to generate more than a $1 billion in free cash flow during a 12 year project life. Following completion of the PFS and maiden ore reserves being declared, we expect takeover interest to build so we reiterate our speculative buy recommendation.

XTD (XTD)

Chart: Share price over the year

Owns a digital media and information system suitable for transit networks in major global cities. XTD is generating strong revenue growth. The partnership with APN Outdoor has resulted in seven year contracts with domestic railway networks, providing the company with stable, recurring revenue streams. Management is also targeting international expansion. 

HOLD RECOMMENDATIONS

Resolute Mining (RSG) 

Chart: Share price over the year

Owns gold mines in Queensland and Mali in West Africa. It’s on course to produce more than 300,000 ounces in fiscal year 2016 and post its second consecutive year of higher operating profit. With the company rapidly reducing debt, operating cash flow can be increasingly directed to growth projects and capital management. Resolute is well positioned to benefit from any further recovery in gold prices.  

Stockland (SGP)

Chart: Share price over the year

This diversified property group pays steady annual distributions and has demonstrated resilience in its underlying operations. We’re attracted to the company’s historical growth trajectory and diversified domestic exposure. A good pick for anyone looking for both capital growth and yield. 

SELL RECOMMENDATIONS

Acrux (ACR)


Chart: Share price over the year

Sales in 2015 of its flagship product Axiron, a testosterone replacement therapy, missed our expectations. We believe future sales may not meet our targets. We advised to sell in 2015 and retain our advice. While ACR may present a speculative opportunity, we would want to see more encouraging data and a technical reversal of its stock before upgrading our view.  

SAI Global (SAI) 

Chart: Share price over the year

This risk management company was recently trading at a 52 week low and remains under selling pressure. We believe it will take time for the stock to recover. Even though 2015 results were robust, we believe the 2016 outlook failed to inspire investor confidence. Better opportunities elsewhere. 


Peter Moran, Wilson HTM

BUY RECOMMENDATIONS

Ridley Corporation (RIC)


Chart: Share price over the year

Reported a solid first half 2016 result, with NPAT up 9.3 per cent to $12.1 million despite higher property and corporate costs. We have a positive view on future earnings. We expect moderate, but sustained underlying earnings growth of about 8 per cent a year in agricultural products. We also expect new feed mill projects to offer additional earnings growth potential in the medium term. The recent sale of the Dry Creek asset reduces the need to raise capital to fund expansion projects. The recent pull back in the share price since late last year provides an opportunity to take a position in the stock. 

Touchcorp (TCH)


Chart: Share price over the year

This transaction software provider reported a strong maiden full year result, comfortably beating prospectus forecasts. The company is continuing to expand its product suite, solidifying its position as a one stop shop for transaction processing, while increasing the potential pipeline. TCH continues to benefit from its own customers generating strong growth. We have increased our target price to $3.01. The shares closed at $2.27 on March 9.

HOLD RECOMMENDATIONS

Amcor (AMC)


Chart: Share price over the year

The global packaging company’s half year result was operationally sound and resulted in us increasing our earnings forecasts between 2 per cent to 3 per cent. With the share price moving higher following the result, we believe the company is fairly valued. At recent prices, AMC is on a forecast 2017 price/earnings multiple of 15.5 times and a dividend yield of 4.5 per cent. 

Medibank Private (MPL)


Chart: Share price over the year

The company is benefiting from improving margins in response to positive contract negotiations with hospitals and savings from its claims integrity program. This will further enhance its market position, as cost improvements help retain customers. However, we still see regulatory pressure as the Federal Government strives to improve its budget position.

SELL RECOMMENDATIONS

Saracen Mineral Holdings (SAR)


Chart: Share price over the year

We have downgraded the gold producer from a hold to a sell on valuation grounds. The shares were priced at 50 cents on October 2, 2015. The shares closed at $1.01 on March 9. While SAR is a good operator, we’re not convinced the gold price will continue its recent sharp rise. The shares are trading 45 per cent above our valuation.

WorleyParsons (WOR)


Chart: Share price over the year

The 2016 first half result confirmed the company is facing difficult conditions with underlying NPAT falling 29 per cent to $74 million. For the first time since listing, no dividend will be paid. While this engineering and mining services company is cutting costs, we expect most of it will need to be reinvested or it will only offset price declines. We can’t see much margin expansion for the next few years.

>> 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.