Likes
This week CMC Markets chief market strategist, Michael McCarthy likes a2Milk (A2M). He says it had the best result of the season.
“The company delivered great numbers and a plan to maintain growth with strategic alliances. The share price has settled after wild response from investors. I would prefer to buy a dip but I’m not sure there’ll be one,” he says
Switzer Super Report executive director Paul Rickard is more upbeat on the latest CBA Hybrid issue – PERLS X
Last month, I advised hybrid investors to avoid Westpac’s new Capital Notes 5, saying that it was too expensive (see https://switzersuperreport.com.au/westpacs-new-hybrid-no-bargain/ [1] ). Last week the benchmark issuer, Commonwealth Bank, announced a $1.25 billion PERLS X issue. It is paying a margin of 3.40% (20 basis points higher than the Westpac issue) and is 6 months shorter both to the call date and the mandatory exchange date.
While still a touch expensive, this issue is likely to receive a better reception than the Westpac issue when it finally debuts on the ASX. Applications open on Thursday (15 March), with ASX listing set for 11 April.
Dislikes
Michael does not like Bluescope Steel (BSL).
“A good turnaround but I think the positives are priced in. In my view, a likely loser in a more competitive steel environment, with few competitive advantages other than the US operations,” he says.
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