18 Sharing Tips – May 24, 2021



Elio D’Amato, Spotee.com.au

PURCHASE RECOMMENDATIONS

Basic lithium (CXO)

This lithium explorer is expected to start production in 2022. It is in the process of signing offtake agreements, progress leading to more secure funding. A bonus is its uranium assets in South Australia. Given the recent surge in spot uranium prices amid rising exploration potential, the company is considering several options to realize value. A speculative purchase.

Vital metals (VML)

This emerging producer of rare earths has started work on his project in Canada. The project is expected to operate for over 20 years at this point. The company plans to start production in 2021. It aims to produce a minimum of 5,000 tonnes of contained rare earth oxide by 2025. Inventories of rare earths have been lower recently, so VML can prove to be a good entry point at this stage of the cycle.

MAKE RECOMMENDATIONS

West Bank (WBC)

The company achieved statutory net profit of $ 3.443 billion in the first half of 2021, up 213% from the second half of 2020. Net interest margins improved and the bank restored a more sustainable dividend of 58 cents per share. From a Tier 1 capital perspective, the bank is unquestionably strong. Compared to its peers, WBC has been the best performer of the recent reporting season, in our opinion.

James Hardie Industries PLC (JHX)

Building materials has been a strong industry, especially for companies with exposure to the United States, like JHX. Its preliminary report showed that JHX recorded 9% profit growth to $ 262.8 million for the 12 months ending March 31, 2021. The company was optimistic about its outlook across its divisions and expects a strong growth next year. Any weakness in prices can be seen as an opportunity to accumulate stock, in our opinion.

SALE RECOMMENDATIONS

Perenti Global (PRN)

This mining services company cited COVID-19, wage costs and a stronger Australian dollar for the recent downgrade. This downward revision contrasted with the more positive outlook offered earlier this year. In my opinion, investors are questioning the outlook and recently sanctioned the share price. Mining service companies can be cyclical businesses, so any demotion puts investors on high alert.

The A2 Milk Company (A2M)

Since the identification of A2M as a sell in September of last year at $ 17.16, the stock price has plunged. In our opinion, poor inventory management combined with a weak Chinese daigou channel have led to numerous degradations and a questioned economic model. As investors, we can choose to allocate our capital anywhere. It is difficult to identify a catalyst that will improve business performance in the short term. In our opinion, better opportunities exist elsewhere.

Michael Gable, Fairmont Equities

PURCHASE RECOMMENDATIONS

BHP Group (BHP)

In my opinion, strong commodity prices combined with government stimulus measures and possible inflation are positive winds for resource stocks. Prior to the recent liquidation, BHP closed at $ 51.65 on May 10. We expect the company to resume its bullish trend, and a weaker stock price provides a buying opportunity for a global miner with good prospects. The shares closed at $ 48.28 on May 20.

Evolution mining (EVN)

The prospect of inflation and a weaker US dollar should support the price of gold going forward. This gold miner recently established a new uptrend. As a low cost gold producer, EVN enjoys higher margins than its peers, so it is more protected against any volatility in the price of gold.

MAKE RECOMMENDATIONS

Aristocratic hobbies (ALL)

This games company recently improved its profit forecast and aims to generate higher profits than the market anticipated. The share price recently hit all-time highs. Given the potential earnings growth and the stock’s strong chart profile, we believe that positive momentum can support the stock price.

Worley (WOR)

This engineering services company is heavily exposed to the energy sector. The weakness in the share price since January has recently given way to renewed buy support, and Worley’s shares look much stronger on a chart basis. We expect crude oil prices to rise and, in turn, support Worley’s share price as demand for the company’s services continues to rise.

SALE RECOMMENDATIONS

Kogan.com (KGN)

The stock price of this online retailer closed at $ 25.10 on October 20, 2020. The shares closed at $ 10.15 on May 20, 2021. Inventory issues weighed on the stock price. action. KGN, like other online retailers and tech stocks, is vulnerable to potentially higher interest rates. In my opinion, KGN is still trading at a relatively high price / earnings multiple, which exposes it to perhaps more selling if something goes wrong in the short term.

Sigma Healthcare (SIG)

This large network of pharmacies is facing increasing competition. The chief executive announced his resignation in April. This created uncertainty and weighed on the share price. Another concern is the lack of buying pressure on the chart and this could weigh on the share price. Other actions attract more.

Angus Geddes, big prophets

PURCHASE RECOMMENDATIONS

James Hardie Industries PLC (JHX)

This construction products supplier posted strong preliminary results for the full year, posting a 9 percent increase in net income to $ 262.8 million and a record operating cash flow of $ 786.9 million. of dollars. While facing some cost pressures, management has raised the long-term margin guidance for North America, Asia-Pacific and Europe for the next three years. Housing markets are expected to remain dynamic in a low interest rate environment and JHX is able to gain more market share. The outlook for sustained earnings growth is in my view positive.

Amcor API (AMC)

This global packaging company is a key player in the sector. It has tremendous pricing power and should work well in what we expect to be a more inflationary world. The stock has consolidated below key resistance at $ 16.50 for many years, but I expect a major break above that level. Dividends are also attractive.

MAKE RECOMMENDATIONS

Mainstream Group Holdings (MAI)

A bidding war continues to unfold for this fund administrator service provider. The latest takeover bid on May 20 is priced at $ 2.65 per share. Bidders appreciate the quality of Mainstream’s activities and its potential. It operates in Australia, the United States and several other countries. The group was providing administrative services to 1,364 funds in March 2021. Shareholders should keep abreast of the news. There could be other auction actions.

BWP Trust (BWP)

The units of this real estate investment trust weakened following the publication of its first half results in February. Total revenue managed to hold steady at $ 76.1 million, but investors may have been concerned about the lack of growth and the rising yield curve. The yield curve has sloped, which has given stocks a boost in recent weeks. BWP is well positioned to generate consistent revenue and distribution growth over the next decade through high quality business assets, prudent management and a predominant exposure to Bunnings – one of the top retailers in Australia.

SALE RECOMMENDATIONS

The A2 Milk Company (A2M)

The former darling of the market cut its revenue and profit forecast. EBITDA margins have more than halved and overall profit guidance has been revised to between NZ $ 132 million and NZ $ 150 million, from NZ $ 549.7 million in 2020. This is massive downgrading, and it’s no secret that A2 has been severely hampered by border restrictions. Trade with China through its Daigou channels has been significantly impacted. The company has a good brand, but we are concerned about its exports given the escalating trade tensions between China and Australia.

After-payment (APT)

I continue to remain bearish on this stock, which has fallen considerably since its highs in February. Competition in the buy now, pay later industry is fierce. In addition, the industry faces increasing competition, making valuations of existing companies difficult to justify. APT broke support at $ 95, and I think there is a chance that the stock will drop even more, maybe to a fairer value between $ 40 and $ 45.

The above recommendations are general advice and do not take into account any individual’s goals, financial situation or needs. Investors are advised to seek their own professional advice before investing. Please note that TheBull.com.au simply posts broker recommendations on this page. The posting of these recommendations does not constitute a recommendation on the part of TheBull.com.au. You should seek professional advice before making any investment decisions.



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