In this week’s likes and dislikes is a popular electronics retailer, a dairy company and satellite telecommunications.
Michael McCarthy of CMC Markets likes Harvey Norman (HVN) this week. “Harvey Norman sold down hard on multiple woes and cleared one hurdle last week with ASIC ending its investigation on HVN’s accounts,” says McCarthy.
“I see the current share price as an opportunity to buy an Australian retailer with an impressive track record.”
Source: ASX
A2 Milk (A2M) made McCarthy’s ‘not-so-good-book’ this week. “While I am an admirer of this business, the share price has run very hard. Last week’s price action showed increased volatility and large daily swings which can be a precursor to a correction.”
Source: ASX
Michael Wayne from Medallion Financial Group likes Speedcast International (SDA) who are involved in satellite telecommunications.
“The business is one of the worlds most trusted providers of end to end Communications and IT Solutions to businesses operating in remote locations. Debt is elevated but the company has demonstrated an ability to generate strong cash flow, which over time can be used to reduced leverage,” says Wayne.
“The company operates with attractive economies of scale as highlighted by growing earnings from transferring into expanding margins”.
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Source: ASX
Wayne says there isn’t much to say about Myer, who features in his ‘not-so-good’ books. “The company is in structural decline and the balance sheet continues to deteriorate”, he says.
“There is a chance the share price continues to fall away, however the prospect of a takeover should provide some support. Operationally, there is little to be excited about”.
Source: ASX
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