Michael Gable, Fairmont Equities
Western Areas (WSA)
We continue to remain bullish on the resources sector and WSA is arguably Australia’s best nickel producer. Like most commodity stocks, the share price has recovered from 2018 lows. We continue to see strong momentum in the stock, with volume starting to pick up. The charts indicate an initial target above $3. The shares were trading at $2.38 on February 20.
Sandfire Resources NL (SFR)
This copper producer is benefiting from an uptick in copper prices. Earlier this year, the stock bounced off trend line support, and recently pushed through a major resistance level. I expect the share price to continue edging higher and threaten the old high near $10. The shares were trading at $7.90 on February 20.
BHP Group (BHP)
We’ve been bullish on this global miner for several months, and it finally pushed through key resistance levels between $35 and $36. The BHP share price has fended off the sellers and our upside target of $40 now comes into play. The stock should be well supported on any dips back near $35.
Origin Energy (ORG)
We remain bullish on the oil and the energy sectors. ORG has been making solid progress off recent lows. The shares have cleared major resistance near $7.50 and should continue heading higher from here. We expect ORG to climb back towards $9 during the next few months. The shares were trading at $7.60 on February 20.
This international building products provider downgraded guidance and there doesn’t appear to be enough bargain hunting in the market to lift it from current levels. The stock has been hitting resistance near $5, so, for the moment, it appears the downtrend is still in place and we expect BLD shares to drift lower. The shares were trading at $4.83 on February 20.
Pushpay Holdings (PPH)
This payment solutions company has been struggling for almost a year, with the share price falling from a high of $4.30 on April 11 last year to a low of $2.64 on November 21. After bouncing earlier this year, the shares corrected after what I consider a disappointing market update in early February. I believe recent weakness shows PPH is still in a downtrend and I can see the shares heading below $3 once more. The shares were trading at $3.16 on February 20.
Janine Cox, Wealth Within
Ramsay Health Care (RHC)
This private hospital operator is currently trading out of a significant low of $51.89 in October 2018 and is above the trend line on the monthly chart. From a technical perspective, RHC represents one of the better opportunities in the healthcare sector in 2019. The shares were trading at $59.58 on February 20.
Origin Energy (ORG)
Energy stocks are often more volatile than healthcare stocks and ORG is no exception. Solid opportunities to profit often present. ORG has recently rebounded following strong buyer support between $6.50 and $7.50, in preparation for a further rise over coming months. The shares were trading at $7.60 on February 20. HOLD RECOMMENDATIONS Tassal Group (TGR)
The salmon producer recently announced a 22 per cent increase in interim net profit to $31.7 million. The news was received well by the market, with a rise above an important resistance level at around $4.60 to the all time high price of $5.10 in January 2016. On February 20, the shares were trading at $4.925, but we expect it to challenge the all time high price again.
Woolworths Group (WOW)
In my view, WOW continues to be the preferred option to supermarket rival Coles. However, the stock must trade above $30.60 in coming months to continue towards a target range of between $36 and $37 in 2019. The shares were trading at $28.63 on February 20. SELL RECOMMENDATIONS Australian Pharmaceutical Industries (API)
Keep a close eye on this pharmaceutical distributor, as the share price recently fell to near the low of $1.227 in April 2018. If the stock closes any week below $1.29, the probability of a further fall increases. The shares were trading at $1.37 on February 20. Bendigo and Adelaide Bank (BEN)
Although BEN is a good company with strong customer values, what’s important to investors is buyer support above $10.40. If BEN closes any week below $9.80, customer values won’t halt a price decline, in my view. A strong rise above $10.40 is necessary to reduce the risk of a further fall to around $9. The stock was trading at $9.80 on February 20.
Tony Paterno, Ord Minnett
BlueScope Steel (BSL)
The global steel maker has completed major restructuring over recent years, including closing half its Australian manufacturing capacity. BlueScope is a key choice, as we see it generating material free cash flow through the cycle. Its focusing on high value added products – some sold at fixed prices.
Normalised first half net profit for this online business was below our forecast. We expected display advertising and Stratton Finance earnings to be soft, but they were far weaker than we anticipated. The core domestic classifieds business remained solid, with dealer and private revenues growing. Achieving earnings per share growth will be challenging, but we continue to see long term potential.
Tabcorp Holdings (TAH)
Underlying net profit missed our estimate by some way. Lotteries growth was strong and digital migration was promising, with cost saving targets from the Tatts acquisition likely to continue in an upgrade cycle.
Spark Infrastructure (SKI)
Owns energy sector assets. Spark consistently pays a dividend. The stock has been sold down, but hold for dividend yield and predictable cash flows in the absence of meaningful growth.
This investment manager reported first half normalised net profit in line with its pre-released guidance update. Return on equity and margins continued to decline. We believe pressure to potentially de-risk the business is a headwind for growth, but it provides some safety in what management sees as more challenging times.
ALE Property Group (LEP)
Owns a portfolio of about 86 pub properties across Australia. It reported a first half distributable profit short of our forecast due to higher corporate costs associated with the rent review process and lower net property income following delays in reaching a rent agreement with its key tenant. We still see the trust’s valuation as full.
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