Given our rough day on the market, let’s start off with our dislikes. Morgans managing partner, Raymond Chan doesn’t like Myer. He’s got something in common with Roger Montgomery there, who last week posed the question of whether the company’s equity raising was just throwing good money after bad.
“The market position of Myer, the inflexibility of the department store format, and the increasing competition for the high-end consumer suggests that the end result is more likely to be weaker than management’s target,” Montgomery said.
Also on the dislikes, Michael McCarthy doesn’t like Blackmores. He says it’s not about the company, but about the share price and the “eye-watering highs” it’s been hitting lately.
At around $137 a share, Blackmores’s market capitalisation is $2.4 billion dollars, compared to a record full year profit of $46.6 million.
“Good growth story, but the share price has lost touch with reality (in my opinion, largely due to a lack of tradeable shares – a few large shareholders dominate). Sell now to buy back cheaper, later,” McCarthy says.
When it comes to likes this week, we don’t have much. Raymond Chan likes Telstra and Evan Lucas likes Woodside and Oil Search in the energy sector.
Evan says we should see an increase in the oil price over the coming month. “This is a seasonality event as the northern hemisphere drifts into winter and the consumption of heating oil and gas ramps up. Considering the high level of shorting and the mass selloff in this space over the last year, it’s likely to see some buying in the short term.”
Michael McCarthy says he likes TEN but he only means as a very short-term trade as traditional media remains under severe pressure.
“However, a surprising acknowledgement by the ACCC of potential damage to TEN if the Foxtel purchase is disallowed, and the potential for changes to media ownership laws, mean there may be a “pop” in TEN’s share price. Not a core holding, but a short-term opportunity to possibly juice up portfolio returns.”
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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