Likes
This week, CMC Markets’ Michael McCarthy likes rare earth miner Lynas Corporation (LYC). Its share price is down sharply after the announcement of an inquiry into their operations.
“However the activist minister heading the inquiry has offered to step down, potentially easing hostility. I see this as an opportunity to diversify mining exposures,” Michael says.
And our own Paul Rickard sticks by his “courageous” bank call of a few weeks ago. http://www.switzer.com.au/the-experts/paul-rickard/would-i-buy-the-banks-right-now/
“I have been on the ANZ bandwagon this year and in this respect, been proven to be right. However, it is now the second most expensive on forward multiples, and Westpac is (unusually) the cheapest. As the differences between the banks are so small, on value grounds, my vote goes to Westpac,” he said then.
And here’s an international like from Antipodes chief investment officer, Jacob Mitchell, who likes General Electric (or GE), which has been hit hard over the past two years and lost 60% of its value.
“What has been lost in the current share price malaise is the strength of some of the businesses inside the conglomerate, notably Aviation and Healthcare which are the assets in which the bulk of the value lies,” he says
He sees the shares as significantly undervalued at current levels.
“In a market that is prepared to pay a very high valuation multiple for structural growth, our investment in GE represents a remarkably cheap way of gaining such an exposure.”
Dislikes
Michael doesn’t like Fairfax (FXJ). He says that although the proposed “merger” with Nine will likely go ahead, the share price is under pressure, after Fairfax and Domain (DHG – FXJ owns around 60%) both disappointed last week.
“In particular, 1% revenue growth at Domain does not compare well to analyst consensus forecasts of long-term growth around 16%,” he says.
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