Matthew Felsman, APP Securities
Emefcy Group (EMC)
The company recycles wastewater and is going after the Chinese market. Put simply, it has unique technology that can be produced in volume and a large market. Intellectual property is protected and management has produced multi billion dollar businesses in the past. Resolute Mining (RSG)
The gold miner was recently elevated to the S&P/ASX200 so mandated institutional funds will have to buy the stock. The technical chart picture looks very bullish. RSG recently announced a record net profit after tax of $213 million for the year ending June 30, 2016. More importantly, RSG is a gold stock. Recent international trade is a good example of how wrong the market is with global interest rates. HOLD RECOMMENDATIONS
National Australia Bank (NAB)
All the bad news is priced into the banks – further capital requirements, bad debt exposure and the potential for dividend cuts. We see the banking sector as an obvious winner from global interest rates normalising because their margins will improve. Technically, the US banking sector has broken out and we see larger gains for NAB from current levels. WorleyParsons (WOR)
With more than 16 per cent of the share register short sold, WOR was recently the second most shorted stock on the ASX. And after analysing the recent company report, this engineering services group has a future. So the worst is over. The shorts are wrong and they will have to buy back. SELL RECOMMENDATIONS
Stocks viewed as quasi bonds will be under pressure when interest rates rise. Telstra’s share price is down almost 15 per cent in the past 12 months. In our view, TLS has little if any growth prospects. Technically, TLS looks destined to break its $5 support area. The shares were trading at $5.02 on September 15. Sydney Airport (SYD)
SYD was priced at $7.54 on August 24. It was trading at $6.47 on September 15. Highly regulated and defensive businesses, in the absence of a direct correlation with the economy, have commanded very high multiples as they provide investors access to predicable cash flows and bond like yields. We continue to remain bearish about these stocks as they are simply too expensive.
Michael Heffernan, PhillipCapital
The hearing implant maker’s recent report was impressive and sales were strong. Investment in product development, its pipeline of new products and market growth initiatives are expected to underpin growth in 2017. Webjet (WEB)
Chart: Share price over the year
The online travel agency delivered an excellent full year report. Revenue was up 29.1 per cent to $155.3 million. Net profit after tax grew by 27 per cent to $22.2 million. It’s a standout performer. Despite an uncertain economic and market environment going forward, we expect WEB to perform well on the domestic and international fronts. HOLD RECOMMENDATIONS
Treasury Wine Estates (TWE)
This iconic wine maker, which owns the prestigious Penfolds brand, delivered a strong result and its future profit growth is expected to be solid again. Its exposure to the US is an added advantage with a weakening Australian dollar. Domino’s Pizza Enterprises (DMP)
It just keeps on keeping on, and is king of the pizza industry in the digital age. Its expansion into France, Belgium, the Netherlands and now Germany seems to be working well. Its meteoric share price rise puts some analysts off, but not me, as its fundamentals and growth profile remain intact. SELL RECOMMENDATIONS
G8 Education (GEM)
This major childcare operator’s recent half year report didn’t meet my expectations. While childcare is a growing market segment, there’s always a risk the Federal Government will change the rules to the detriment of providers. It’s unsettling. Medibank Private (MPL)
Its recent full year result was good. However, the tone of the report and its outlook were underwhelming. Stiffer competition in the health fund arena will make it more difficult to sustain growth.
Janine Cox, Wealth Within
Invests in bauxite mining and alumina refining via a joint venture with Alcoa. Since May 2016, AWC appears locked in a range between $1.20 and $1.50. Interestingly, this volatile sideways activity is characteristic of past price action for AWC prior to a break out. A strong move above $1.48 represents a compelling buying opportunity. The shares finished at $1.325 on September 14. Cover-More Group (CVO)
From late 2015, this travel insurer moved into a precarious decline, but it appears to have found a bottom in July at $1.15. The price must trade strongly above $1.50 before CVO could be considered a solid buying opportunity. This stock is for experienced traders with a short term horizon. The shares closed at $1.34 on September 14. HOLD RECOMMENDATIONS
JB Hi-Fi (JBH)
The market responded positively to news that JBH will acquire The Good Guys. The deal provides increasing market scale for a retailer focusing on growth. Although JBH’s share price has recently retreated from its high, medium term price momentum can support higher prices to at least $33.50. Domino’s Pizza Enterprises (DMP)
Back in 2014, few would have believed that DMP would be trading above $70 in just two years. Interestingly, the share price has resonated around multiples of $10 as it rose. A strong close above $78 would increase the probability of a further rise to between $90 and $100. The stock finished at $71.01 on September 14. SELL RECOMMENDATIONS Aristocrat Leisure (ALL)
This gaming machine company recently traded near its all time high price of $17.68 before retreating closer to $14 to test buyer support. A technical exit recently formed on the weekly chart so consider taking some profits. Magellan Financial Group (MFG)
MFG formed an all time high of $28.22 in 2016. It pulled back strongly before trading sideways. Provided MFG continues to trade above $21, it’s likely to rise. But if it falls below this level, it’s time to consider a careful exit.
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