This week, our experts are banking on the banks.
Michael McCarthy of CMC Markets says that ex-dividend selling in the Commonwealth Bank (CBA) has pushed it back in line with peer valuations. He’s also a believer in CBA’s enduring technology edge over its competitors.
“In my view, [CBA] still has a technology edge, and will recapture a share price premium. A happy buyer around $71,” he says.
CBA
Source: Yahoo! Finance
Evan Lucas of IG Markets also sees a fundamental reason to move on the banks, but prefers CBA and National Australia Bank (NAB) over Australia and New Zealand Banking Group (ANZ) and Westpac Banking Corp (WBC).
“Value and low news will help and the “discount” (lower premium price) attractive,” Lucas says.
NAB
Source: Yahoo! Finance
Lucas sees further downside in gold exposed stocks as the USD becomes more attractive. He’s keeping an eye on Newcrest Mining (NCM).
Also in the likes list this week is Australian leisure and entertainment business, Ardent Leisure Group (AAD). Morgans’ Raymond Chan notes how the company results exceeded market expectations. Shares in the company are now at levels around $2.50.
AAD
Source: Yahoo! Finance
Our resident chartist, Gary Stone of Share Wealth Systems, likes what he’s seeing in the share price trend for Monadelphous Group (MND).
He notes that after falling over the last two weeks (on the back of a results announcement on August 23), MND entered a support zone between $8.30 and $8.65, and bounced higher on Friday. He says it’s likely the share price can go higher from here.
“There is a high probability that MND can rise again to the resistance zone from which it fell, that of $11 to $11.50. A fall below $8.30 would indicate further sustained weakness in the MND share price, but a 3:1 risk/reward ratio may be good odds for those that are prepared to take a managed position over the next month or two,” he says.
MND
Source: Yahoo! Finance
A stock for the dislikes list this week is Village Roadshow (VRL). Stone says the share price has dropped out of a support zone between $5 and $5.30, which has held ground since March this year.
“The next major support zone is $3 to $3.20”, he says, and notes that while it’s unlikely to fall that low, it remains a technical possibility.
VRL
Source: Yahoo! Finance
Ramsay Health Care was out-of-favour with Michael McCarthy this week.
“I like the business, but not the share price,” he says.
“Sell at $81 to buy back between $69 and $75”. If you haven’t read Paul Rickard’s take on Ramsay Health Care as Australia’s best company, click here.
Our Super Stock Selectors is a survey of prominent analysts, brokers and fund managers. Each week we ask them to name a stock they like, and one they don’t like. We purposely ask for ‘likes’ and ‘dislikes’ instead of recommendations, so it provides an idea of what the market is looking at, rather than firm buys or sells.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
