In our “HOT” stocks column, Michael Gable, Managing Director of Fairmont Equities, explains why he thinks Resmed (RMD) is a buy. And Julia Lee, Chief Investment Officer, Burman Invest says why she likes Harvey Norman (HVN).
ResMed is involved in the development, manufacturing, distribution and marketing of medical devices for sleeping related disorders. The company generates 60% of its revenues in the US. It has maintained strong earnings growth over the years. Most recently it has also benefited from the recall of a competitor’s products.
“The share price eased back in September, but it appears to be on the move again,” Michael said.
“After that dip into early October, RMD then started to base build in preparation of a recovery.
“During these past few weeks, we can see that it has been making “higher lows”, as indicated by the diagonal blue line.
“This means that each time the price takes a dip, it is met my solid buying.
“This is clearly a bullish sign for the stock and we expect it to continue rallying from here. “Naturally some resistance will come in at the old high near $40,” Michael added.
“Harvey Norman (HVN) sales have been under pressure due to the impact of lockdowns,” Julia said.
“Australian comparable sales were down 11.1% year-to-date to 21 November 2021. “Many of the items Harvey Norman stocks are premium big-ticket items that people usually want to see in the store before purchasing.
“As NSW and Victoria come out of lockdown with household savings strong, it bodes well for the crucial Christmas period.
“Internationally, all regions except Malaysia are seeing growth.
“November and December should be strong trading periods for Harvey Norman driven by special sales events like Black Friday and in the lead up to Christmas,” Julia concluded.
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