Michael Gable, Fairmont Equities
Syrah Resources (SYR)
An Australian resources company focusing on its graphite project in Mozambique. The share price has been slashed since its peak in June, but it now looks like recovering about half that loss. Recent price action on the chart has resembled a falling wedge, and SYR recently broke above that. I now expect SYR to rally back towards the base of the wedge. This would give it a target of about $4.50. The shares were trading at $3.44 on January 11.
Senex Energy (SXY)
The first half of 2016 was positive for this oil and gas explorer and producer as it rallied strongly over 30 cents. It then spent the rest of the year drifting sideways. I can now see this price action resembling a symmetrical triangle. About two weeks ago, SXY broke out on strong volume, which was impressive when the rest of the market was trading on lower volumes. We expect the stock to run from here, with an initial target near 40 cents. The stock was trading at 30.7 cents on January 11.
This packaging company looks undervalued and a stronger US dollar should help earnings. On the chart, ORA made a 3 wave decline from an August peak, with the third wave being 1.6 times the length of the first wave. In Elliott Wave theory, this is significant as it means the pullback has probably finished. It has bounced off support and we expect the stock to rally to prices higher than last year’s peak. The shares were trading at $2.99 on January 11.
NRW Holdings (NWH)
Provides diversified services to the civil, mining and construction industries. After jumping sharply early last year, the stock spent a few months consolidating sideways to digest the rise. It then rallied again during August before tracking sideways once more to consolidate that move. It now looks like NWH is on the move again and we can see potential for it to run towards resistance near 90 cents. Traders should place their stops near 60 cents. It was trading at 72.2 cents on January 11.
Rio Tinto (RIO)
On August 30, when it was trading at $48.52, we suggested to our clients a possible rally to mid $50 levels. It easily exceeded that, climbing above $63 in December. Now, we have noticed a possible reversal with our weekly candlesticks. RIO has formed a dark cloud reversal and we believe it will retreat. We expect support close to $53. The shares were trading at $62.58 on January 11.
Beach Energy (BPT)
On October 17, we suggested a trade to thebull readers, predicting a rise from 75 cents to above 90 cents. This oil and gas company achieved that, but has since fallen to trade at 84.5 cents on January 11. The chart is indicating the stock will fall, so we would take profits in anticipation of cheaper levels in the 70 cents region.
Jonathon Howe, Red Leaf Securities
Transaction Solutions International (TSN)
One of few ASX listed companies with a direct interest in India via its financial services business TSi. The company is still doing due diligence in regard to buying the balance of TSi from its private equity partner. I believe TSN offers long and steady growth. I own shares in TSN. Automotive Solutions Group (4WD)
The company recently completed its IPO at $1 a share before listing on December 21, 2016. We believe some IPO buyers were looking for a quick trade, so recent price weakness provides a good opportunity to buy into an automotive roll-up for 4WDs and sports utility vehicles (SUVs). We note management has a good track record. I own shares in 4WD. The shares were priced at 92.5 cents on January 12.
We continue to accumulate Telstra for clients. The dividend isn’t far away as the company reports half year results in February. We believe the stock is a long term stayer at these levels and a good addition to a balanced portfolio.
OneVue Holdings (OVH)
The 12 month high was 85.7 cents on February 1, 2016. The shares were trading at 57.5 cents on January 12, 2017 after recent falls, which we believe are unwarranted. The current price creates an opportunity to invest in a business that’s disrupting fund services.
Fortescue Metals Group (FMG)
This pure play iron ore producer enjoyed a great run during 2016. But we expect the iron ore price to retreat from this recent rally, so we believe it’s a good time to start reducing exposure.
BHP Billiton (BHP)
Another miner benefiting from a robust iron ore price. The company was priced at $14.06 on January 21, 2016. Any stumble in the iron ore price, which we expect, is likely to have a negative impact on BHP’s share price. It may be good time to lighten holdings and pocket some profits.
Simon Herrmann, wise-owl.com
Talisman Mining (TLM)
An Australian minerals company with operations in Western Australia. Its most advanced asset is a 30 per cent interest in the Springfield joint venture covering 198 square kilometres, immediately to the east of Sandfire Resources’ DeGrussa Copper-Gold Mine. Talisman also holds the 290 square kilometre Sinclair Nickel Project, which underpins a longer term value play. We’re attracted to its board, management and shareholders on the registry. With feasibility studies underway, we expect a development decision in the first half of 2017. A speculative buy.
Monadelphous Group (MND)
Looking at the technical indicators of MND, the stock is trading at an inflection point that could trigger a reversal of a long term downtrend. Monadelphous is an engineering services company. It provides construction, maintenance and industrial services to the mining, energy and infrastructure sectors. As money is pouring back into the mining sector, Monadelphous is well positioned to benefit from a recovery in the depressed resources industry. The stock is trading on an undemanding valuation and the dividend was recently yielding above 5 per cent.
Berkeley Energia (BKY)
Berkeley Energia is on track to become one of the world’s lowest cost uranium producers as the fully owned Salamanca mine in Spain is progressing towards construction. The company is fully funded following a $US30 million equity raising in November 2016. Berkeley sits at the bottom of the cost curve and is now transitioning from developer to producer. BKY is a long term value play.
Bendigo and Adelaide Bank (BEN)
The share price has rebounded strongly in the past 12 months and remains a hold. This mid tier bank offers diversified exposure to the financial services industry in regional Australia and has consistently distributed attractive dividends to its shareholders. While financial results have been marginally below expectations in the past few quarters, the valuation is undemanding and the balance of risk remains even.
WPP AUNZ (WPP)
Following the merger of STW Communications and WPP, this newly formed entity is now one of largest advertising and marketing companies in Australia and is expected to generate pro forma sales of about $850 million. Trading performance has been broadly in line with expectations and synergies from the merger could drive margins. However, in my view, integration risks and balance sheet gearing present significant challenges, which may constrain the company’s ability to expand. Price volatility has been evident during the past six months. We consider the latest share price strength as a good time to exit this position. We downgrade our view to sell.
The share price of this technology company has suffered since the middle of last year and is now valued around its lowest level since its IPO. The company’s significant growing revenue profile and potential to expand its service offering are attractive qualities. But we’re concerned about elevated levels of unallocated free float and, in our view, uncertainties regarding cost control.
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