Is Macquarie still a buy? Why has OncoSil’s share price been so volatile and what is our perspective on their prospects? What are the rules to follow to get the government super co-contribution for a grandchild? What is the price target for Wesfarmers?
Question 1: Do you think Macquarie is still a buy?
Answer: I nominated Macquarie (MQG) as one of my three “top picks” to buy in the dip post Donald Trump’s “Liberation Day (along with Goodman and Pro Medicus). They have rallied pretty well, from a low of $160 to about $220 today. That said, they are still a fraction lower than where they started the year ($221.60) and the late January high of $242.90. While US market direction will be incredibly important to the Macquarie share price, my sense is that they have had a pretty good run, and further gains could be hard work. I am not a seller, but I think (outside a portfolio position), it is too late to buy. The major brokers also share my thoughts. They have a consensus target price of $211.58. Interestingly, the range is pretty tight, from a low target of $199.00 from Morgan Stanley through to a high of $223.89 from Morgans.
Question 2: I have been following OncoSil (OSL) closely and noticed some unusual activity regarding its listing status and share price. Specifically, OncoSil was unlisted twice, and at one point, the share price showed as $1.05 per share (it was previously $0.003). I hold a significant number of these shares and some options that expire later this month. Could you provide insight into the reasons for this volatility and your perspective on the company’s future prospects?
Answer: OncoSil (OLS) has just completed a 400 for 1 consolidation (one new share for every 400 old shares held), and that is why the price is now around $1.00. The new shares are trading under the code OLSDA. You can see the on broker websites such as CommSec the price of OncoSil (adjusted for the consolidation) since listing. The high is around $6.00 and the low $0.95. Investing in a company like this (which is commercialising an implanted device delivering targeted radiation to pancreatic tumours) is highly speculative. I have no insight into the Company’s prospect of success. However, the long term share price performance, share consolidation and recent capital raise of just $8.7m doesn’t fill me with confidence.
Question 3: I have an 18 year old grandson. I have read about the government super co-contribution where the Government puts in $500 if he makes a personal contribution of $1,000. If I fund this contribution for him, what are the rules we need to follow?
Answer: The most important rule is that at least 10% his total income must be from an employment source, that is, he has had a job during the year. His total income must be under $40,000 to get the maximum co-contribution of $500. Therea are two other rules (under age 71) and have a total super balance of less than $1.9m that I am sure he passes. Importantly, the personal super contribution of $1,000 needs to be paid and receipted by the super fund before 30 June.
Question 4: I am thinking that Wesfarmers (WES) is starting to look a little toppish. What do the brokers have as a target price?
Answer: The major brokers feel that Wesfarmers is overvalued. The consensus target price (according to FN Arena) is $72.25, about 14.8% lower than the last ASX price of $84.79. The range of targets is a low of $66.70 from Morgan Stanley through to a high of $80.00 from Macquarie. All brokers have “sell” or “hold” recommendations.