After last week’s Crown debacle, which saw 18 employees held in detention in China and shares in the company sold down heavily, Michael McCarthy has pinned it to his likes list.
“The majority shareholder, James Packer, previously expressed interest in privatising the group,” says McCarthy.
“Plans announced last week to spin off a property trust are, in my view, a step in that direction, limiting downside risks.”
A potential initial public offering of a 49% stake in a property trust that owns some Crown Resorts’ Australian hotels “could realise significant value for Crown Resorts shareholders,” said a company statement to the ASX.
Shares in Crown were trading on Monday off 3% at $10.58.
Crown Resorts (CWN)
Source: Yahoo!7 Finance
Charlie Aitken said he’d be taking advantage of another stock that wobbled on the back of the Crown arrests – Star Entertainment Group (SGR) – which he likes for the medium-term.
“We are taking advantage of short-term pain hopefully to generate longer-term total return gain,” he says. [1]
“SGR shares have fallen back to a P/E of 17.5x FY17 consensus earnings. We think that will prove too cheap and we expect more clarity at the SGR AGM on October 28”.
Star Entertainment Group (SGR)
Source: Yahoo!7 Finance
Star shares have dipped to around $5 from $6 levels earlier this month.
On the dislikes list for McCarthy this week is Fortescue Metals Group (FMG). While there are a lot of positives to note, there’s one trend in particular that he’s not fond of.
“I like the quarterly production numbers, I like the ongoing cost cutting, but I don’t like the way the stock is flattened every time it reaches for $5.20,” he says.
“Looks to me like a large seller, meaning risks are on the downside after a better than tripling of the share price this year.”
Shares in Fortescue were trading on Monday at $5.08.
Fortescue Metals Group (FMG)
Source: Yahoo!7 Finance
The big banks are set to reveal their profits over the coming weeks, kicking off with National Australia Bank on Thursday. Investors will be looking out for any changes to dividend payments.
Westpac is the preferred pick for Raymond Chan, who this week placed the stock on his likes list. The bank will report their full-year results on November 7.
He says Westpac has a “relatively low risk profile in terms of loan book positioning and a low reliance on treasury and markets income.”
Westpac
Source: Yahoo!7 Finance
Regis Healthcare remains on his dislikes list on the back of regulatory uncertainty.
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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