Simon Herrmann, wise-owl.com
BUY RECOMMENDATIONS Resolute Mining (RSG)
This gold miner has an attractive production profile and balance sheet. Short term performance was negatively impacted by increased expenditure, but we remain attracted to the magnitude of the company’s assets and ability to expand its low cost production for the benefit of shareholders. Coca-Cola Amatil (CCL)
The beverage maker could be a turnaround play after committing additional investment to Australian beverages. While this company may never be as exciting as explosive technology companies, we see potential for medium term growth and income opportunities on the back of a reasonable valuation. HOLD RECOMMENDATIONS GALE Pacific (GAP)
Makes branded screening and shading products for industrial, commercial and domestic applications. In our view, the share price has underperformed in the past 12 months, but a recent guidance upgrade could improve sentiment towards the stock. GALE also reaffirmed its full year forecast, as management believes that new business opportunities in the Americas will result in a strong second half.
Collaborate Corporation (CL8)
CL8 is uniquely positioned to benefit from growing demand in the sharing economy. The DriveMyCar business is tracking towards cash flow breakeven and the recently launched Mobilise website offers upside. Highly capable management, with a strong focus on strategic partnerships. SELL RECOMMENDATIONS MACA Limited (MLD)
This contract mining and civil earthworks company has a strong order book in excess of $1 billion. During the 2018 first half, the company achieved 18 per cent revenue growth, but EBITDA declined 28 per cent due to a substantial rise in costs and writedowns at its Interquip business. We acknowledge the company’s potential to turn around the business. But operational efficiency needs to improve. The share price has been trending down since early November 2017. The shares were trading at $1.345 on March 22. Registry Direct (RD1)
This cloud based business has been a disappointing performer since listing on November 1, 2017. It has a limited operating history and there’s no guarantee that intellectual property can be commercialised. The company needs to generate more revenue. The shares were trading at 6 cents on March 22.
Tony Locantro, Alto Capital
Proteomics International Laboratories (PIQ)
PIQ has announced the launch of PromarkerD in the Dominican Republic. PromarkerD is a predicative diagnostic test for diabetic kidney disease. We expect further licensing opportunities to emerge. The PIQO 20 cent options are due to expire at the end of the month, contributing to share price weakness. Alto Capital has agreed to underwrite the options for up to $2 million. Market capitalisation is low relative to the upside potential. The shares closed at 20.5 cents on March 22.
Metal Bank (MBK)
Chart: Share price over the year
MBK continues to announce significant near surface gold results from the Triumph Project in Queensland. Despite the positive news flow, the share price remains subdued and represents a speculative buying opportunity. Further drilling momentum and seeking a bulk tonnage target at depth are upside catalysts. The shares closed at 1.8 cents on March 22.
DXB is moving towards a phase 2b study for its chronic kidney disease drug DMX-200. Based on encouraging clinical trial results to date, the recent $7.5 million in funding at 12 cents a share should leave the company well funded to further advance its trials. There’s been a recovery across the biotech sector, with three significant corporate transactions. DXB looks attractive on a risk/reward basis. The shares closed at 13 cents on March 22.
Minotaur Exploration (MEP)
MEP is a high quality junior explorer with backing from copper and gold company Oz Minerals. Exploration will take place in Queensland and South Australia. Minotaur also has a portfolio of industrial minerals yet to attract a market value. MEP has tended to be cyclical. The time to accumulate is when drilling begins following the wet season in Queensland.
Westpac Bank (WBC)
Major bank share prices have been struggling in recent years. I’m concerned about Westpac’s interest only loan exposure, particularly in light of a potential correction in Sydney and Melbourne’s residential property market. I believe taking profits would be prudent.
Bellamy’s Australia (BAL)
The milk/organic product sector has roared ahead following The A2 Milk Company’s stunning results. At March 22, the share price of infant formula company Bellamy’s had more than doubled since January 3, 2018. The shares closed at $22.23 on March 22. It might be prudent to take some money off the table as I’m expecting more market volatility.
Michael Gable, Fairmont Equities
BHP Billiton (BHP)
For those looking to trade the swings in BHP, we have picked the turning points well for readers. I had it as a buy last October, and then as a sell in January, with a view to buying closer to $28. Having hit my downside target near $28, we’re now recommending BHP as a buy with a new target closer to $35. The shares were trading at $28.49 on March 23.
St Barbara (SBM)
At the end of last year, this gold producer managed to push through its 2016 high. It then consolidated above that high before breaking free again to resume the uptrend. The all time high for SBM is near $5, so we expect the shares to now rally towards that level. The shares were trading at $4.075 on March 23.
Northern Star Resources (NST)
The trend for this gold producer has been positive for more than a year, but with some decent pullbacks along the way. The share price consolidated at the start of this year, but we have now seen it break free. NST is in blue sky territory, so it’s unknown how high it can go. However, for the time being, there’s plenty of positive momentum.
Corporate Travel Management (CTD)
The stock soared on February’s results to trade to an all time high on strong volume. It looks a bit overdone in the short term, so we expect it to ease back. After that, CTD should then trend higher. The shares were trading at $23.42 on March 23.
Mortgage Choice (MOC)
The peaks seem to be rounding out and the shares have fallen quite heavily to some minor support. The shares were priced at $2.53 on February 22. The shares were trading at $1.75 on March 23. The stock has broken through its 2016 low, which was below $1.80.
Starpharma Holdings (SPL)
This biotechnology company is giving us a textbook example of a trend reversal. After rallying strongly at the end of 2017, SPL recently formed a shooting star reversal. Price action continues to look weak and I expect SPL to remain in a downtrend – at least in the short term. The shares were priced at $1.64 on January 30. The shares were trading at $1.25 on March 23.
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