Likes
Four of our analysts have shared their likes and dislikes today. First up, we have CMC Markets’ Chief Market Strategist, Michael McCarthy. He likes Ainsworth Gaming Technology (AGI), saying that the pokie manufacturer delivered a reasonable result in a competitive environment. However, a downbeat outlook for the next six months saw share price pressure continue. “Management is confident its investment in the America will deliver the desired growth, and at 6-year lows, I think it’s worth taking a gamble,” he adds.
Next up, ST Wong, CIO & Portfolio Manager, Equities, Prime Value Asset Management Ltd, likes Technology One (TNE).
ST says that TNE reported a strong FY18 result that highlight a high proportion of recurring revenues and a sense that there is increasing momentum in new customer wins, particularly in customers moving onto its cloud platform. “The stock fell 7.8% on the previous Friday due to management sell down of shares – however, the fall was greater than the 5.5% discount the shares were placed out at the day before – hence, investors will be able to acquire TNE shares at a price lower that the $5.50 institutional placement price.
And very well-known to this Report, Julia Lee, of Bell Direct sees Nufarm (NUF) as a BUY.
“Agricultural stocks such as Nufarm are cyclical and the time to look at buying is usually during tough times such as drought. While glyphosate and the safety of the herbicide is still a risk after a US case, which ruled Monsanto liable for causing cancer through its glyphosate based weedkiller, there is also potential upside from its Omega 3 Canola product,” she says. “Omega 3 is important for human health and also fish. While wild fish accumulate Omega 3 through eating other marine organisms, when it comes to farmed fish, they need to be fed Omega 3 feed. The new Omega 3 Canola product is an exciting alternative in feed for fish farming,” Julia adds.
And finally Michael Gable of Fairmont Equities likes Stock is keen on Woodside (WPL), which has fallen from about $39 to nearly $31 in the last two months. “I believe that the fall in the oil price is now overdone and it will shortly find support. The WPL share price is showing some technical signs that the recent slide is slowing down,” he says.
“Buying momentum has actually trended higher in the last month, despite the fall in the share price. This is a positive sign and indicates that we should see some buying support very shortly. With a fully franked yield of nearly 4.3%, I think current levels are an opportunity to purchase WPL for investors looking to time their entry levels,” he adds.
Dislikes
While respecting that it’s a well-run company, Michael doesn’t likes Qube Holdings (QUB). “The share price is too rich for me. I see strong resistance at $2.70, limiting upside, whereas trading at a PE that’s more than 30 there is, in my view, significant downside,” he says.
ST doesn’t like WorleyParsons (WOR) saying that it has a “High correlation to the oil price, which has been declining sharply and the recent proposal to acquire Jacobs Limited is likely to weigh on its share price,” he adds.
In Julia’s books, SDA (a company that provides telecommunications for remote locations for sectors such as defence, cruise ships, resource projects) is a SELL. “With energy in a slump, the higher gearing becomes a greater risk to the business,” she says.
“The key for this stock is energy but given the outlook for energy has deteriorated over the last couple of months, it’s time to reduce risk and exit this stock. This view would change if oil prices turned to move upwards again and oil companies started to expand capex and exploration plans,” she concludes.
And finally Michael (Gable) doesn’t like Afterpay (APT). “It has a great story to tell and the growth potential ahead of it is enormous but price action during the last few months tells a different story,” he says.
“The selling has been quite heavy since the August peak. Any buying has been short lived. As I look at different support levels get broken and resistance levels failing to be breached, I can see that the APT share price is likely to keep falling. For the moment, there is more heat to be taken out of the share price and there’s a good chance that we see the stock trade under $10. Once it has done that, then I’m happy to come back and consider it,” he adds.
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