Our stock selectors have been pretty busy over the past few weeks as they analyse the numbers coming out of reporting season.
One of our favourites this week, nominated by CMC Markets’ Michael McCarthy, is REA Group. He really liked the 40% profit jump in its full-year numbers.
“While the headlines focussed on the exposure to a lift in local house prices, REA is building a substantial international opportunity. Business leverage is higher in tech companies, and below $45 it’s at an estimated P/E to growth ratio around 1.25,” he said.
Another company that is expected to benefit from the housing and building boom and announce good results, according to Raymond Chan, is Beacon Lighting.
Michael Heffernan’s pick, James Hardie, will also do well from improvements in both the local and US industries.
“It has been performing excellently and has attractive fundamentals. The improvement in the US building industry is particularly positive for its future profitability,” Heffernan says.
Our chartist, Gary Stone, likes AGL Energy after it reached another all-time high close on Friday last week.
“The original breakout occurred on 26 May this year when AGL rose above its long time resistance zone of $15.35 – $15.70,” he says.
“This zone has been tested and retested three times when AGL returned down to those prices and has held each time supporting the start of AGL’s new trend. The last strong rising trend lasted six and half years.”
Our Super Stock Selectors is a survey of prominent analysts, brokers and fund managers. Each week we ask them to name a stock they like, and one they don’t like. We purposely ask for ‘likes’ and ‘dislikes’ instead of recommendations, so it provides an idea of what the market is looking at, rather than firm buys or sells.
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