This week, Evan Lucas from IG Markets likes the banks and believes there is an overreaction to concerns about bad and doubtful debts in the sector.
“The fact that all four are showing signs of renewed strength and are mitigating the headwinds of the sell-off in 2016 is likely to close up,” Chan says.
Jacob Simonsen from Lincoln Indicators likes the telecommunications retailer Vita Group (VTG). The business includes six brands including 100 Telstra shops and 21 Telstra business centres.
“The company has a financially healthy, strong balance sheet with no net debt,” Simonsen says.
“A number of small acquisitions in the small-to-medium size business sectors is anticipated to drive scale, a strategic focus of the business,” he says.
However, Simonsen does not like the wagering business Tabcorp Holdings (TAH). While initiatives to maintain domestic dominance continues, he notes that the business still faces increasing competitive pressures in the online gaming market.
“We still believe that in the immediate term competitive pressures remains too strong for the mature business to be viewed as a comfortable income stock,” he says.
For Morgans’ Raymond Chan, it’s all in the pricing. This week he likes Rio Tinto (RIO) because of the recovering in the iron ore pricing. However, he doesn’t like Qantas (QAN) because the “higher oil prices could create headwinds” for the business.
Our chartist Gary Stone does not like Australian Pharmaceuticals Industries (API) as the stock has failed to break through resistance at $2.00 to $2.15.
It “looks like it could retrace to a former support/resistance zone between $1.45 and $1.55,” he says.
While Medibank Private (MPL) scored an upgrade in this week’s Buy, Sell, Hold – what the brokers say report, CMC Markets’ Michael McCarthy doesn’t like the health insurer.
“The price spike induced by the announcement of contribution increases from April 1 looks to me like a perfect opportunity to exit,” he says.
Instead of a stock pick, this week, McCarthy nominates a type of trade that he likes.
The type of trade he likes, is “buying top 20 stocks, and buying a put option in the same stock to give downside protection should the worst case scenario unfold.”
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