Likes

Michael likes BlueScope Steel (BSL) and thinks it is defensively positioned around $11 and could surprise on growth again. “The full-year result confounded investor fears with a 17% increase in underlying profit,” he says.

“Initial market reactions suggest a focus on the headline drop of 35%, however, the comparison with last year is muddied by the one-off benefits that lifted the previous result,” he adds.

Source: Google

Meanwhile, Julia is keen on Baby Bunting (BBN), a stock she’s liked for the last couple of years. “All of Baby Bunting’s major competitors have gone bust and consumers want to try before they buy big ticketed items like prams,” she says.

“When analysing retail concepts, a combination of strong organic growth together, with a rollout of stores, is a winning combination,” she adds.

“This reporting season has shown that the growth in Baby Bunting isn’t over, with strong growth and a roll out of stores likely to support a continued rise in share price.

“In FY20, earnings are likely to grow 30%+ which is a positive anomaly in a difficult retail environment.

Julia says to watch out for a potential upgrade to their long-term guidance of hitting 80 stores, as this could be another positive catalyst for BBN’s share price.

Source: Google

Dislikes

Michael doesn’t like Saracen Minerals (SAR). “Despite record levels for gold in Australian dollars, SAR recorded only an 11% increase in earnings,” he says.

“Although SAR will pay its first dividend since 1996, some may view this as a disappointing result in what are boom times for gold miners,” he adds.

Source: Google

And Julia doesn’t like Ooh Media (OML). “Reporting season gives us insights into turning trends, new trends and on-going trends,” she says.

“Unfortunately for Ooh Media, the 1-2 year outlook is weak. This is a company which is reliant on strong business conditions and spending. Given the soft global growth outlook, global companies have already started to pull back on advertising. 3^rd quarter bookings are down on the previous period and 4^thquarter earnings looking weak,” she adds.

“It looks as if this company is now stuck in a downgrade cycle. The time to buy into this company is when strong economic growth looks to be on the horizon,” she advises.

Source: Google

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