It’s not surprising that Slater and Gordon (SGH) – a stock that has garnered most (negative analyst) attention last week is on the dislike list of one of our super stock selectors.
Elio D’Amato from Lincoln Indicators says that while the company looks cheap at these levels, “we feel there is currently not enough risk involved to outweigh the potential gains”. D’Amato feels there are better opportunities for growth in the consumer discretionary sector and prefers AP Eagers (APE). The company operates 105 car dealerships.
“We expect strong earnings growth for APE to be driven by positive macro factors, acquisitions and organic growth given continued strength in both the new and used car markets,” D’Amato says.
Evan Lucas of IG Markets likes the infrastructure stock Transurban (TCL) that is described by Citi analysts as the only “cash cow” in the ASX. “Future revenues look assured and the prospect of a progressive dividend policy will make it attractive to long-term investors,” Lucas says.
Lucas still does not like BHP Billiton (BHP) with the miner facing the added pressure with the Brazilian government looking to sue BHP and Vale for $7.2 billion
Michael McCarthy from CMC Markets likes Seven West Media (SWM) despite substantial write-downs.
“Changes in the political landscape point to potential legislative changes and the business is well-placed to either buy or divest,” McCarthy says. McCarthy does not like Mesoblast (MSB) following the botched Nasdaq listing.
“While it has promising areas of development, the lower share price and diluted shareholder base means the risks if it doesn’t deliver, are company threatening.
Our Super Stock Selectors is a survey of prominent analysts, brokers and fund managers. Each week we ask them to name a stock they like, and one they don’t like. We purposely ask for ‘likes’ and ‘dislikes’ instead of recommendations, so it provides an idea of what the market is looking at, rather than firm buys or sells.
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