In hot stocks this week Julia Lee of Bell Direct likes Flight Centre. She believes that Flight Centre is in the midst of an upgrade cycle, driven by a structural upcycle in international visitors, cost discipline and a rising Australian dollar.
“A rising $A should help its key Australian business, which has dragged on performance,” she says.
“While there are risks, given relatively high multiples and a new system rollout in Australia, a result on the upper end of guidance for the first half of profit before tax of $120-135 million should provide comfort that, not only are cost initiatives and productivity helping results, but demand is stronger than what the market has priced in.”
Flight Centre
Source: ASX
Michael McCarthy from CMC Markets likes Westpac (WBC). He says the three-month cautionary sell down ahead of the 2018 Royal Commission into the financial sector pushed stocks such as ANZ, NAB and WBC to attractive levels.
“The WBC chart points to outperformance – of interest to any investors underweight the sector and/or growth exposures.”
Westpac
Source: ASX
However, Michael doesn’t like Mirvac Group (MGR).
“The sector is likely to face further pressure from rising interest rates, compounded for MGR by a softer outlook for property prices and therefore development,” he says.
This means there is potential for a retreat to $1.65 from current levels around $2.20.
Mirvac
Source: ASX
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