18 Share Tips – 5th May 2025

Welcome to this week’s edition of 18 Share Tips – our weekly selection of top ASX shares, chosen by leading analysts, that we think are worth considering.

This week Niv Dagan of Peak Asset Management, Damien Nguyen of Morgans and James Nicolaou of PAC Partners share their ‘Buy’, ‘Hold’ and ‘Sell’ recommendations.

Please note these share tips are simply recommendations and are in no way intended as financial advice.  These share tips are general advice and don’t take into account any individual’s financial situation. Investors are advised to seek professional financial advice before investing.

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Niv Dagan, Peak Asset Management

BUY RECOMMENDATIONS

BUY – Livium (LIT)

Livium recently announced it had secured a recycling agreement in excess of $5 million with Sell & Parker. The agreement extends an existing relationship. This agreement is potentially Livium’s biggest ever recycling contract, with anticipated revenue of $3 million during the next 12 months, equivalent to 45 per cent of total revenue in fiscal year 2024. The company will also receive fees from Sell & Parker for providing recycling services for project related materials. We believe the agreement validates Livium as a recycler with high governance and safety standards. The shares were trading at less than a cent on May 1.

BUY – WhiteHawk (WHK)

The company recently announced it had secured a key cyber sub-contract position on a US Federal Government contract vehicle to the value of $US920 million over 10 years. WHK provides AI (artificial intelligence) empowered advanced cyber data analytics and platforms. As task orders are released and contracts confirmed by the US Government, WHK’s portion of the contract amount will be made known. WHK is working in conjunction with other firms. Investors responded positively following the sub-contract announcement. It paints a brighter outlook for WHK, in our view.

HOLD RECOMMENDATIONS

HOLD – Kincora Copper (KCC)

Kincora is an active copper and gold explorer. The company has 12 licences in Australia and two in Mongolia covering about 3500 square kilometres, which make up seven major project portfolios. The company recently announced it had secured a second major earn-in with AngloGold Ashanti. The company’s project generator model has unlocked more than $110 million of potential partner funding. Kincora believes there is ample scope to significantly grow this figure. The company is advancing discussions for further large scale partner agreements.

HOLD – ResMed Inc (RMD)

The shares closed at $33.25 on April 23, a day prior to releasing its third quarter results for fiscal year 2025. On April 24, the stock closed at $36.08. It was trading at $36.74 on May 1. ResMed makes medical devices to treat sleep disordered breathing, such as sleep apnoea. The company posted an 8 per cent increase in revenue in the third quarter when compared to the prior corresponding period. The gross margin improved 140 basis points to 59.3 per cent. Income from operations increased 14 per cent. Products used to treat chronic respiratory conditions are expected to remain exempted from US import tariffs under the Nairobi Protocol.

SELL RECOMMENDATIONS

SELL – JB Hi-Fi (JBH)

JB Hi-Fi is a consumer electronics giant that’s enjoying favourable momentum. The shares have risen from $86 on April 7 to trade at $104.76 on May 1. The company posted a strong set of results in the first half of fiscal year 2025. Total sales of $5.67 billion were up 9.8 per cent on the prior corresponding period. Earnings before interest and tax of $419.9 million were up 8.6 per cent. However, for a discretionary retailer to sustain sales and earnings during a cost of living crisis presents challenges, particularly as consumer confidence wanes. At these price levels, investors may want to consider taking some profits.

SELL – Super Retail Group (SUL)

The retail giant’s brands include Supercheap Auto, Macpac, Rebel and BCF. Total group sales were up 4 per cent in the first half of fiscal year 2025, but statutory net profit after tax was down 9 per cent. Segment earnings before interest and tax (EBIT) at Supercheap Auto were down 6.6 per cent in an environment of intense market competition. Segment EBIT at Macpac fell 57.6 per cent. Consumers are careful about spending in this challenging economy of soaring household charges. So other stocks appeal more at this time.

Damien Nguyen, Morgans

BUY RECOMMENDATIONS

BUY – Macquarie Group (MQG)

Macquarie is a global investment leader with strong exposure to infrastructure and renewable energy. Macquarie blends stable income with growth opportunities and paid an interim dividend of $2.60 a share in December 2024. We view the recent sell-off as overdone and see the stock as good value for long term investors. In a third quarter trading update in February, MQG noted fiscal year 2025 net profit after tax was broadly in line with the prior corresponding period. Macquarie plans to report its full year results on May 9.

BUY – GQG Partners Inc. (GQG) 

GQG Partners is a global investment firm specialising in active equity portfolios across developed and emerging markets. GQG has a strong track record of performance. It generated net inflows of $US1.8 billion for the month of March and $US4.6 billion for the quarter ending March 31, 2025. In our view, GQG offers value. At recent prices, the dividend yield was above 6 per cent. We view GQG as a quality holding for growth and income investors.

HOLD RECOMMENDATIONS

HOLD – Guzman Y Gomez (GYG) 

GYG is a Mexican themed restaurant chain with strong brand appeal and exciting growth prospects, particularly as it expands domestically and internationally. Focusing on fresh ingredients and efficient service gives it an edge. Early performance as a public company has been solid. However, it’s still early days, and the current valuation prices in a lot of future success. For investors already holding the stock, it’s worth watching its store rollout and financial performance before adding more. We suggest staying patient and holding for now.

HOLD – Coles Group (COL) 

Coles is a defensive stock with steady earnings and a solid position in the supermarket space. It’s a reliable performer, particularly during uncertain economic times, and remains attractive for dividend investors. However, rising costs and fierce competition limit its growth potential, and, in our view, there’s few near-term catalysts for share price upside. While Coles is a solid hold for income seekers, it may underperform growth-focused names if markets start to settle. We suggest investors retain Coles for income, but wait for better value or growth signals before topping up.

SELL RECOMMENDATIONS

SELL – Telstra Group (TLS)

Earnings growth should have been stronger in the first half of fiscal year 2025 given its dominant position in the mobile and broadband segments, in our view. Market competition and margin pressure may continue to weigh on future performance. The dividend is stable, but insufficient to justify holding in a low growth environment. Despite recent structural changes, the growth outlook remains modest and better opportunities exist elsewhere in the market. Investors holding Telstra for yield may consider rotating into stocks with stronger total return potential. We suggest taking profits or reducing exposure as headwinds persist.

SELL – Commonwealth Bank of Australia (CBA) 

CBA is a quality bank, but it’s trading at a significant premium to its peers. While it delivers strong dividends and has a solid brand, it’s facing the same macro risks as other banks — rising bad debts, slowing credit growth and margin pressure from interest rate changes. The high valuation leaves little room for upside and makes it vulnerable to any earnings disappointment. For investors who have enjoyed strong returns, it may be a good time to lock in gains and reduce exposure.

James Nicolaou, PAC Partners

BUY RECOMMENDATIONS

BUY – WIA Gold (WIA) 

This explorer is advancing its recent Kokoseb gold discovery in Namibia. WIA recently released encouraging assay results from a drilling campaign involving a total of 33 holes across 7414 metres. The 2.1 million ounce resource is already economic at $US1800 an ounce. A gold resource upgrade is possible in the third quarter of fiscal year 2025. The company announced it was expanding mineralisation beyond the existing mineral resource estimate boundary. Demand for gold in Namibia underpins appealing merger and acquisition activity.

BUY – BlueScope Steel (BSL) 

The steel maker generates reliable free cash flow. Steel spreads are improving, particularly in North America where company expansion should generate earnings growth in the years ahead. Higher margin coated products should lead to a market re-rating. The shares have been recently enjoying favourable momentum, rising from $19.80 on April 9 to trade at $23.93 on May 1. Appealing fundamentals provide a brighter outlook.

HOLD RECOMMENDATIONS

HOLD – Alfabs Australia (AAL)

Alfabs is a heavy fabricator and site installer of steel structures for infrastructure projects. Also, it’s involved in equipment hire. The company has performed well since listing in June 2024. The company enjoys robust margins and has a powerful growth pipeline across its leasing and engineering divisions, with management flagging expansion potential that should energise investors.

HOLD – Paragon Care (PGC)

The company is a healthcare manufacturer, wholesaler and distributor in the Asia Pacific region. It provides medical equipment, devices and pharmaceuticals, among other products. The group enjoys demographic tailwinds from an ageing population, with pharmacy revenue and complementary medicine demand still accelerating. Revenue of $1.85 billion in the first half of fiscal year 2025 was up 13.1 per cent on the prior corresponding period. Integration synergies are starting to dull freight and wage pressure, and net leverage continues to edge lower. A solid defensive holding with credible growth sparks ahead of fiscal year 2025 catalysts.

SELL RECOMMENDATIONS

SELL – Corporate Travel Management (CTD) 

CTD provides business travel management services. Revenue and other income fell by 6 per cent in the first half of fiscal year 2025 when compared to the prior corresponding period. Statutory net profit after tax was down 42 per cent. The unfranked interim dividend of 10 cents a share was down from 17 cents, or 41 per cent lower, on the prior corresponding period. The shares have fallen from $17.66 on February 21 to trade at $12.94 on May 1. The share price is fighting unfavourable momentum. In our view, the shares are trading on a lofty price/earnings ratio, leaving little room for error.

SELL – Lendlease Group (LLC)

LLC is a property developer and investment manager. The group is focusing on growing its Australian operations and international investment management platform. LLC recently announced it had completed the sale of its UK construction business for $70 million. However, the net cash outflow as a result of the transaction is about $100 million due to the unwind of negative working capital in the business. The sale completes the group’s exit from international construction. We find the simplified Australia-only pipeline hard to model at this point. Construction margins in the first half of fiscal year 2025 were thin. The shares have fallen from $6.77 on February 17 to trade at $5.26 on May 1. Challenges present when transitioning a company in a competitive sector.

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The above recommendations are general advice and don’t take into account any individual’s objectives, financial situation or needs. Investors are advised to seek their own professional advice before investing. 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.