Likes
First up today, CMC Markets’ Chief Market Strategist, Michael McCarthy likes Seek Ltd (SEK), the online employment services group that is expanding both its product range and its geographical reach. “The re-investment in the business depresses short-term earnings but increases potential long-term earnings. In my view, the pullback from almost $23 a share to around $17 means it should be considered by longer-term investors.” he says.
Source: ASX
Next up, ST Wong, CIO & Portfolio Manager, Equities, Prime Value Asset Management Ltd, likes Alliance Aviation (AQZ), a 31 aircraft air charter operator, with a large exposure to operations in the resources sector. “Demand from the resources sector is strong, and growing, as mining activity improves after a long period of cut backs. With limited supply of new aircraft available in the Australian market, AQZ’s pricing position also improves, allowing for better profitability,” ST says. “Valuation is attractive as the stock is trading at 13x FY19 with a yield of 6%,” he adds.
Source: ASX
Dislikes
Michael doesn’t like the BWP trust (BWP). “This property group is trading at around 20x earnings, with long-term growth prospects estimated below 2%. In my opinion, this is wildly overvalued, as it approaches its all-time high. Growth for its tenants (Bunnings) is potentially limited by increasing competition and the unfranked dividend yield at around 5% is not compelling,” he says.
Source: ASX
Meanwhile, ST doesn’t like Janus Henderson (JHG), a global funds manager listed on both the ASX and the NYSE, which manages a broad range of asset classes for both retail and institutional investors. “Although JHG is trading on low PE multiples relative to its history, it’s difficult to pinpoint a positive catalyst in the near term,” ST says. “JHG continues to suffer net outflows in both equities and fixed income. Meanwhile, volatile equity markets and Brexit are likely to cap its share price performance,” he adds.
Source: ASX
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