Among this week’s companies are an investment house, a beverages business, a packaging company and a supermarket operator.
Michael McCarthy from CMC Markets likes investment house Washington H. Soul Pattinson (SOL) this week. He says the company has a “spectacularly successful track record”.
“Record profits, a diversified portfolio and a share price that slid more than 12% in the lead up to the result; an opportunity to buy higher quality at lower prices”.
[1]Source: ASX
He doesn’t like Coca-Cola Amatil (CCL).
“Despite trading at 8-year lows and admirable product and geographical diversification, the flagship brands remain in decline,” he says. “A potential dividend trap.”
[2]Source: ASX
Michael Wayne from Medallion Financial Group says packaging business Orora (ORA) is a buy, arguing that the company has invested heavily in recent years and that “the fruits of that investment are starting to flow through in the form of strong cash flow generation and improving returns on investment”.
“The US operations generate 35% of group revenue, however as a small player in a highly fragmented market, the growth prospects in the US remain attractive, particularly when improving industry margins are accounted for.”
[3]Source: ASX
He is not as keen on Metcash (MTS), citing concerns about competition in the retail grocery sector.
“MTS has had a great run in recent years, however competition remains fierce in the retail grocery segment,” he says. “International entrants Aldi and Costco are formidable competitors to the long-established supermarket giants. Aldi already has a 10% market share in response to stiff price competition. Newer entrants may pressure the profitability of MTS and existing giants and continue to disrupt the competitive landscape.”
[4]Source: ASX
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