Michael Heffernan, PhillipCapital
Technology One (TNE)
A strong sharemarket performer that provides internet and cloud based services. Expect double digit profit growth this financial year. In my view, it’s a stock that’s flown under the radar, but its cloud based systems are proving a winner for customers and investors.
Hansen Technologies (HSN)
This arranger of bill paying services for utilities and telecommunication businesses in Australia and overseas has performed well in recent market uncertainty. It has attractive fundamentals and expects to build on its strong performance during the next 12 months. HOLD RECOMMENDATIONS Orica (ORI)
The resurgence in iron ore, oil and coal prices has lifted share prices for our major resources stocks. Mining services companies and particularly explosives maker Orica have benefited from the upturn. Orica’s expected future profit growth is impressive and it was recently paying a 3 per cent partially franked dividend yield.
This Australian based, international share registry business has been a disappointing sharemarket performer in the past few years in my view, but the future looks brighter. Specifically, it can now look forward to continuing improvements in overall sharemarket activity, a stronger US dollar and higher returns from potentially increasing interest rates on cash balances. SELL RECOMMENDATIONS Medibank Private (MPL)
While last year’s result was good, the tone of the associated commentary and outlook were underwhelming in my view. Furthermore, it’s now finding it tougher in the competitive private health fund arena. Domino’s Pizza Enterprises (DMP)
The shares hit a 52 week high of $80.69 on August 18. The shares closed at $68.64 on December 1. Investors may like to take some profits, but should be ready to buy back again as Domino’s future remains positive. Also, its international exposure and leading edge digital delivery methods are first class.
Les Szancer, AXL Capital Partners
Black Rock Mining (BKT)
Graphite used to be flavor of the month. Now, of course, it’s lithium. However, graphite remains an important mineral. Black Rock has the third largest contained graphite resource in the world. It’s in Tanzania. There’s several variations when it comes to graphite, but quality is key. With a 99.1 per cent total graphite carbon concentrates, Black Rock is right in the mix. Platina Resources (PGM)
An international specialty and precious metals company, with assets in Greenland and Australia. The Australian asset in NSW is scandium. The Greenland project is said to involve one of the world’s largest undeveloped gold deposits and one of the largest palladium deposits. Palladium is used in catalytic converters. Palladium, recently priced at $760 an ounce, is no slouch. HOLD RECOMMENDATIONS
The price of this multi level job sourcing business has plunged in the past 12 months. This may be a buying opportunity for those who don’t hold. It has an impressive list of clients and unique products. I see a brighter outlook. 1ST Available (1ST)
The company operates as a free health care appointment provider. Listed in June 2015, the company has achieved several milestones by adding various health care providers to its platform, including doctors, dentists and optometrists. The share price is off its highs, but we expect it to climb as the business grows. SELL RECOMMENDATIONS Rio Tinto (RIO)
Rio is widely known as an iron ore producer. But aluminium, copper, diamonds, energy and minerals are part of its portfolio. Finally, iron ore prices are rising, but Rio’s share price hasn’t responded as much as I would have expected. The 12 month high was $61.94 on November 25. The shares were trading at $58.72 on December 1. I believe Rio will have to come up with something investors find exciting for this stock to kick up. Pan Asia Corporation (PZC)
PZC is aiming to become a key energy supplier in Asia. The company’s flagship is a thermal coal project in Indonesia. Sounds good, but the share price has failed to respond for several years.
Mathan Somasundaram, Baillieu Holst BUY RECOMMENDATIONS Empired (EPD)
The information technology solutions provider announced a positive 2017 first half trading update that was in line to marginally above expectations. The stock was recently trading on an attractive EV/EBITDA multiple of 5 times. Our analyst Josh Kannourakis has a price target of 65 cents. The shares closed at 47.5 cents on December 1. SeaLink Travel Group (SLK)
The company will focus on cost efficiencies, improving the dividend yield and leveraging acquisitions via newly acquired businesses. It has two new vessels for Sydney Harbour. Our analyst Nick Caley has a price target of $5.25. The shares closed at $4.02 on December 1. HOLD RECOMMENDATIONS GBST Holdings (GBT)
Although the outlook for this information technology specialist is improving, we believe fiscal year 2017 shapes as one of consolidation before potential growth emerges the following year. The company remains well capitalised with net cash of $8.8 million at June 30. We regard a forecast fiscal year 2017 price earnings multiple of 17.7 times as close to fair. Our analyst Nicolas Burgess has a price target of $4.10. The shares closed at $3.69 on December 1. Credit Corp Group (CCP)
We have increased our discounted cash flow valuation in light of CCP’s sustained strong performance. The planets look to be aligning for CCP. We continue to regard CCP as a high quality story and investors should consider buying on any price weakness. Our analyst Nick Caley has a price target of $19.70. The shares finished at $17.99 on December 1. SELL RECOMMENDATIONS Mirvac Group (MGR)
We retain a negative view on high density residential property in an environment of rising interest rates, rising under employment, declining disposable income, property bubble worries and weaker consumer sentiment. We expect growth may suffer from an oversupply outlook in 2017 and more stringent lending regulations. The stock finished at $2 on December 1. Monadelphous Group (MND)
We believe downside risks to earnings remain post fiscal year 2017 as the Ichthys LNG project works are completed. This engineering group was recently trading on a forward multiple premium to the sector. In our view, there’s low visibility on future construction earnings post fiscal year 2017. Our analyst Josh Kannourakis has a price target of $6.85. The shares closed at $11 on December 1.
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