Among this week’s likes and dislikes are a vet, a supermarket, an automotive parts provider and a department store.
CMC Markets’ Michael McCarthy likes Greencross (GXL) this week. He says the company is “attractive” and that “the technical picture is supportive”.
“This veterinary and pets supplies business has consensus long-term growth prospects around 11% and is trading on a PE of 14x,” he says.
Greencross (GXL)
Source: ASX
He doesn’t like Wesfarmers (WES), however, arguing that the company, while top quality, “is about to sail into rough water in its retail business”.
McCarthy says he is “taking advantage of recent share price strength to bail out.”
Wesfarmers (WES)
Source: ASX
Medallion Financial’s Michael Wayne likes Bapcor (BAP) this week, calling it “arguably one of the brightest prospects in the consumer discretionary space/”
“The business recently delivered an impressive report, which highlighted strong margin growth, same store sales and cash generation.
“Although debt levels remain relatively high after a series of acquisitions, impressive free cash flow generation ensures it can comfortably service debt. For a business with an impressive earnings profile and strong competitive advantage, the valuation multiple appears attractive at only 17 times 2018 earnings.”
Bapcor (BAP)
Source: ASX
Wayne is not as keen on Myer (MYR) this week. He believes the short sellers have got it right on Myer.
“Being among the most shorted stocks on the ASX doesn’t always mean a company is set for failure,” he says. “However, in MYR’s case, I feel the short sellers have got it right.”
“Although currently changing hands at just 8 times trailing earnings, MYR, in my view, has been a value trap for investors. The company has again downgraded full year guidance and it’s difficult to see things improving with the inevitable arrival of Amazon.”
Myer (MYR)
Source: ASX
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