Magellan Financial Group (MFG) got an upgrade this week in Buy, Sell, Hold – what the brokers say and today CMC Markets’ Michael McCarthy also likes the stock. The 23% increase in the fund manager’s interim profit pleased McCarthy and he says the stock is well positioned to grow from “long-run demographic trends”.
McCarthy doesn’t like Santos (STO) given the company’s 91% drop in profits, but McCarthy also doesn’t like the energy company’s net debt exceeding its market capitalization. He believes investors can find other “bargains” in the energy sector.
Elio D’Amato from Lincoln Indicators likes the consumer discretionary stock SeaLink Travel (SLK). The business operates passenger ferries in New South Wales, Northern Territory, South Australia and Queensland. It reported a stunning 101% increase in net profit to $9.5 million on the prior corresponding period.
“We expect there will be an increasing number of international tourists attracted by the lower Australian dollar and the business will continue to benefit from lower fuel prices and increased tour sales,” D’Amato says. This week, however, D’Amato doesn’t like the diversified mining and material business Arrium Limited (ARI).
He noted that its reported revenue was down 14% on the prior corresponding period and the business also reported $142 million in impairments and $70 million in restructuring costs.
“The outlook for the business looks negative with a strategic review into options of divestment of businesses or assets,” he says.
Prime Value’s Shih Thin Wong likes Webjet (WBF), as the company continues to garner market share from both the retail and wholesale markets. “Further market share improvements are expected with growth in international ticket purchases augmented by growth in travel packages,” he says. Despite the growth in the Domain business, Wong doesn’t like Fairfax (FXJ). “Print and digital advertising continues to be weaker than expected. Notwithstanding significant growth in the Domain business, there is better value elsewhere, such as outdoor advertising,” Wong says.
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