This week, Elio D’Amato of Lincoln Indicators likes Spark Infrastructure Group as it displays strong financial health, with the objective to invest in regulated electricity distribution businesses in Victoria and South Australia.
“The balance sheet remains strong after the acquisition of Transgrid, with cash flows continuing to improve,” D’Amato says.
He sees the company as a ‘’typical defensive business’’, which “pays an attractive distribution”.
Michael Heffernan of Phillip Capital packed Pact Group into his likes list this week because of its ability to perform, despite shaky times on the local share market front. Heffernan says this major Australian packaging group has “sound fundamentals, an attractive dividend yield and a robust profit growth profile”.
And our technical chartist Gary Stone likes a trend when he sees one. He says the share price of Ramsay Health Care has “popped out the top of a down trending channel, being the fourth attempt to do so”.
He says the channel has been in place for 15 months and is part of a long-term flag pattern, that is, “a high probability continuation formation of the previous up trend”. That means it’s highly possible a new price advance could start from these levels in the near future.
[1]Prime Value’s ST Wong was impressed with Link Administration’s update last week, which showed its key growth initiatives were on track.
“The group continues to increase its penetration with key corporate clients, adding new clients such as Woolworths, Sirtex and Macquarie Group,” he says. “Link should meet and very possibly exceed its prospectus earnings forecast for FY16.”
Energy is largely out of favour with our stock selectors this week, with D’Amato expecting the power generation and retailing operations in company Origin to remain under pressure into the future.
Stone says Woodside Petroleum has fallen away again from a significant resistant zone of $28.50 to $30 and that “its share price is also caught in a clear down trending channel”.
“The lower channel line is in the low $20 range, meaning that WPL’s share price could head down to the $22 level or even lower from its current price of $26.91.”
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