Like
CMC Markets’ Chief Market Strategist, Michael McCarthy likes Bapcor (BAP). “The automotive parts distributor has a firm grip on both the retail and wholesale distribution of car and truck parts through a vertically integrated supply chain,” he says.
“Recent expansion into Japanese truck parts adds to the dominance of the group.
“While the current P/E multiple around 17x isn’t cheap, it may be justified by a higher long-term growth rate, and the share price pull back from near $8 to below $6 could be viewed as a buying opportunity,” he adds.
Source: Google
Dislike
Michael doesn’t like Cochlear (COH). “Although COH is an admirable business, its share price looks potentially vulnerable,” he says.
“Trading on a P/E to growth multiple higher than 3x means any missteps could see a severe reaction, and there is emerging currency risk.
“COH’s bottom line is hurt by a rising Australian dollar. Consensus at the moment is for further currency falls, but a long history of rejecting levels below 70US cents may mean it’s our dollar that knocks COH lower,” he adds.
Source: Google
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