Simon Herrmann, wise-owl.com
Steadfast Group (SDF)
This insurance provider has delivered 15.5 per cent underlying revenue growth to $582.5 million over the past 12 months, while underlying earnings per share grew 9.5 per cent to 9.71 cents a share. We continue to believe Steadfast offers an attractive value proposition. Earnings per share growth trends are attractive, while management has successfully integrated acquisitions to date. We remain attracted to the company’s market position and growth outlook and reiterate our buy advice.
Fleetwood Corporation (FWD)
After announcing several acquisitions and restructuring initiatives, this consumer and housing solutions company looks poised for a turnaround. Acquisitions are revenue and earnings per share accretive, and the capital raising was well supported by institutional shareholders. In my view, the smart money has moved into the stock and management has a favourable track record of value creation.
Crowd Mobile (CM8)
It’s been a tough year for shareholders, with the stock plummeting to an all time low of 3 cents after the company encountered operational challenges and announced a $26 million write-down of its subscription division. While the company’s performance has been disappointing, the Crowd Media division continues to gain momentum and recent initiatives to revive the business have the potential to drive a turnaround in this software company.
This bio-analytics company has made significant progress with its flagship product Onco-PDO, a personalised cell based scaffolding technology gathering patient specific cancer information to guide oncologists in drug and therapy selection. The company’s partner focused expansion strategy could drive awareness in key markets and ultimately deliver growing revenues. Plenty of risks involved, but Invitrocue has managed to raise funds at a premium to market price. SELL RECOMMENDATIONS
Village Roadshow (VRL)
An international entertainment and media company, with core businesses in theme parks, cinema exhibition and film distribution. We see this company operating in a challenging space and believe better opportunities exist elsewhere. The shares were priced at almost $4 in January this year. The shares closed at $2.33 on November 8.
Peninsula Energy (PEN)
An Australian minerals company focused on uranium, with operations in the US. The consolidated group posted a loss after tax of $US1.17 million for the year ending June 30, 2018. We’re concerned uranium prices may weaken and present challenges. The shares have fallen from 34 cents on July 27 to close at 21.5 cents on November 8.
Tony Locantro, Alto Capital
Minotaur Exploration (MEP)
This diversified explorer recently advised that drilling into the Jericho copper-gold system is underway again for the Eloise joint venture with Oz Minerals in North Queensland. The company’s market capitalisation is about $11 million. A speculative buy. In my view, the stock is well undervalued on assets and project generation. The stock was trading at 4.2 cents on November 8.
A clinical stage biotechnology company focused on developing new therapeutic treatments. With DMX-200 entering phase 2a/b trials for treating chronic kidney disease, the stock offers value, in my view. It reached a high of 21.4 cents about a year ago, but has since drifted back to trade at 9.6 cents on November 8.
The company announced it had completed phase 1 clinical trials in humans and dogs with its lead drug candidate Monepantel. PAA announced all trials achieved their primary clinical end points in terms of safety and reduction in key clinical biomarkers. In my view, the stock offers value. Those without exposure may want to consider buying the stock. The shares were trading at 4.1 cents on November 8.
Alto Metals (AME)
This emerging gold junior dominates the Sandstone belt in Western Australia and provides exposure to an existing resource base with significant exploration potential. The shares were trading at 4.9 cents on November 8.
Corporate Travel Management (CTD)
The stock has been under siege from short selling after a hedge fund questioned the company’s business model, governance and financial reporting. CTD responded, saying the hedge fund essentially misunderstood the corporate travel sector and the CTD business model. The stock was trading substantially higher on November 8, but was way off its 52-week high of $33.87 on September 4. Prefer others.
Commonwealth Bank (CBA)
Michael McCarthy, CMC Markets
AGL Energy (AGL)
This integrated energy company is under sustained pressure, and the share price is down more than 35 per cent from the April 2017 high. Underpinning this stock is, in my view, a vast distribution network and real cost advantages. The recent dividend yield (including franking) was more than 8 per cent. AGL is in my buy zone. Lovisa Holdings (LOV)
The fast fashion jewellery company targets younger consumers and has demonstrated a way forward for bricks and mortar retailing. It owns and operates more than 320 stores in Australia and overseas. The price was far too frothy above $12 a share, but at $7 levels, it appears a potentially attractive price. The shares closed at $7.69 on November 8. HOLD RECOMMENDATIONS The A2 Milk Company (A2M)
Another stock with a good track record that’s well down from its highs earlier this year. A2M’s marketing has excelled, and management seems focused on retaining first mover advantage in the company’s markets, while building production and distribution infrastructure. Happy to hang in for what I see as superior longer term growth prospects.
This blood products company was buffeted by investor concerns about higher multiple/higher valuation stocks. CSL is well down from its highs. However, the growth story and research and development pipeline remain intact. Retain this top Australian stock despite potential short term share price wobbles.
SELL RECOMMENDATIONS AMP (AMP)
In my view, it’s absurd that Macquarie Group would launch a bid for AMP ahead of potential sweeping regulatory change next year. The recent AMP share price bounce followed unconfirmed media reports of a potential takeover bid. Speculation could represent an ideal opportunity to exit this stock for those who have hung in this far. I wouldn’t be surprised to see professional investors increase their short selling in this wealth manager. Washington H Soul Pattinson (SOL)
Don’t be mistaken, this investment house is a top performer and consistently delivers strong returns. The problem is many investors appear to have realised this at the same time. The share price around $30 looks over cooked to me. I’m happy to take profits here, with a view to buying back in at lower levels. The shares closed at $30.35 on November 8.
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.