The financial services and mining sectors dominate this week’s stock selectors list.
CMC Markets’ Michael McCarthy finds favour with the millionaires’ factory Macquarie Bank (MQG).
Macquarie is “leveraged to markets and deals and the time to get involved is when pessimism is high,” McCarthy says.
“On a forward PE (price-to-earnings) of 11x, with long-term growth estimates around 9%, it looks good value to me,” he says.
McCarthy doesn’t like the gold miner St Barbara (SBM) because of its high costs and a fall in the spot price could cut the miner’s free cash flow.
Prime Value’s ST Wong likes the superannuation administrator Link (LNK) despite the stock price coming under pressure in the wake of a possible sell-down by its private equity owners and Macquarie.
A partial sell-down was executed last Friday. ST Wong says this is expected to lift pressure off its share price, “particularly when Link’s first half results revealed that the company’s progress was tracking well against estimates outlined in its prospectus.
ST Wong does not like Iluka (ILU) as market developments may result in lower-than-expected zircon sales.
Lincoln Indicators’ Elio D’Amato likes the consumer discretionary stock Corporate Travel Management (CTM).
The business has a solid history of offshore expansion by acquisition as well as partnering with Flybuys.
“We anticipate the company’s successful combination of strong organic growth and successful complimentary acquisitions to continue,” D’Amato says.
Liquefied Natural Gas (LNG) is not in favour with D’Amato this week.
“Current weakness in energy markets is likely to affect the company’s progress in the development of export LNG plants particularly in the US,” he says.
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