There’s a bit of a food theme in our likes list this week with Elio D’Amato from Lincoln Indicators picking Collins Foods, and Ric Spooner from CMC Markets liking Tassal Group.
Collins Food is an operator, manager and administrator of restaurants in Australia and Asia, including KFC, Sizzler and Snag Stand.
D’Amato was impressed by the strong sales growth in their recent full-year results.
“We continue to view the outlook for the business as positive as they grow the KFC brand through new store rollouts and revamp existing restaurants,” he said.
He was also pleased that the group announced further consolidation of its restaurants, including the closure of a Sizzler restaurant.
“The group has signalled that it will look at closing further restaurants moving forward and this should free up working capital for other operations.”
And Spooner says that consumer staples, like salmon farmer Tassal Group, are a good place to be when consumers get cautious.
“Meat prices have recently increased as the weaker $A sees exports improve. Tassal, on the other hand, competes against imported salmon so a weaker dollar should improve its sales. Recent deals with Woolworths and Aldi have also improved visibility on sales security over the next one to three year period,” he says.
Our dislikes list is pretty much dominated by resource-related companies, as the general outlook for that sector is poor. But, as Tony Featherstone points out today, that does make it ripe for the M&A picking.
Most of our super stock selectors cite the downside risk of commodity prices – especially oil and iron ore – but there are also other factors at play as chartist Gary Stone points out with his dislike of Beach Energy.
“Beach Energy’s share price has fallen below a support and is heading for the 80c – 85c support zone. If this doesn’t hold then the next support zone below that is way down at around 70c,” he says.
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
