Stock Tips: Analysts turn to safe hands and travel plans in rough seas
The broker was taking this whole "liquidity" thing too literally. Pic: Getty Images
It’s no easy gig analysing share prices and company performance but somebody’s got to do it. Every week two experts from our Share Tips columnist pool give us their recommendations.
Chris Watt – Bell Potter Securities
BUY
CSL’s core plasma business is recovering well, and recent guidance points to steady profit growth ahead. A $750 million share buyback and the planned spin-off of its vaccine division (Seqirus) add extra value levers.
Orica is benefiting from a strong mining sector and is doing a solid job of growing its earnings in safer, more stable regions. Its digital blasting technology is gaining traction, and management is focused on improving returns across the business.
HOLD
HUB continues to attract solid inflows onto its investment platform, showing it’s winning new business. The high valuation leaves us on the sidelines.
Sigma is entering a new chapter following its merger with Chemist Warehouse. The deal brings significant scale benefits, but successful integration will take time. While the long-term story is attractive, the short-term remains uncertain.
SELL
Lynas has ambitious long-term goals, but for now it faces weaker commodity prices, high operating costs, and large capital spending. Its recent rally looks overdone given the risks ahead.
The ASX is battling higher costs and limited earnings growth. While market activity has picked up, the share price already reflects a lot of optimism. With few clear growth drivers on the horizon, the current valuation looks stretched.
David Thang – Sequoia Wealth Management
BUY
Offers steady earnings, underpinned by defensive packaging demand and long-term customer contracts. A reliable dividend yield of 6.50 per cent is attractive in a volatile market.
Global travel agency providing leisure and corporate travel retailer is undervalued relative to its historical multiples and peers. Margin expansion from cost cutting and digital transformation should accelerate future earnings growth.
HOLD
The only significant non-Chinese rare earth producer with integrated upstream and downstream operations. Its Kalgoorlie processing ramp-up is looking promising.
Strong operational performance and lower costs at the Langer Heinrich Mine highlight this uranium production and exploration company’s potential growth. The strategic sales agreements position it well to benefit from rising uranium prices.
SELL
A leading provider of vehicle parts and automotive solutions across Australia, New Zealand, and Thailand issued a sizable earnings downgrade. We favour others.
Softer sales growth and lower gross profit margins has resulted in a softer outlook. Other companies appeal more.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead.
Stockhead does not provide, endorse or otherwise assume responsibility for any financial advice contained in this article.
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