Like
Michael McCarthy thinks that the short-term reaction to A2 Milk represents a long-term opportunity. “I like A2 Milk (A2M),” he says. “Despite a 48% lift in profitability, A2M’s shares plummeted in post-result trading.
“Pressure on margin could be the trigger, as they slipped from 31% closer to 28%.
“However this is explained by increased investment for expansion and further corporatisation,” he adds.
Dislike
On the other hand, Michael doesn’t like Qantas (QAN).
“I don’t like QAN: a 17% drop in profit is cushioned by a $400 million buy back,” he says. “Analysts are looking for positive outcomes based on lower oil prices and competitors cutting capacity but QAN can’t control either of these.
“This stock is flashing red in my view and may have seen peak earnings,” he adds.
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