Despite some big challenges in the oil and energy sector, this week CMC Markets’ Michael McCarthy likes Woodside Petroleum (WPL).
McCarthy says it is a company with an excellent strategic and operational reputation, which he says is “well-deserved”.
“WPL has global assets, excellent prospects, a balance sheet in order and a steady hand on the tiller in Peter Coleman.
“With current low oil prices, WPL is trading at 12-year lows,” McCarthy says.
McCarthy is not making a toast to Treasury Wine Estates (TWE) because the price of the stock is expensive.
“The management here should be applauded for the earnings turnaround. However, last weeks earnings report has pushed them to an all-time high and a P/E ratio above 30. Time to take profits,” McCarthy says.
Lincoln Indicators’ Elio D’Amato does not like Santos (STO) despite the oil company trading at a discount. D’Amato does not like the outlook for the company given the depressed energy prices.
“The company continues to undertake a number of capital intensive projects that may see value in the future, however, currently we believe there are better exposures to be had in other sectors,” D’Amato says.
D’Amato likes AP Eagers (APE) in the consumer discretionary sector.
APE is Australia’s second largest automotive retailer. The company has a well-diversified portfolio of automotive brands including top selling car brands such as Toyota and Mazda and luxury car brands such as BMW, Land Rover and Porsche.
D’Amato particularly likes an acquisition that APE has recently made. The business announced the purchase of Crampton Automotive Group.
He says that the acquisition is expected to strengthen AP Eagers’ presence in South West Queensland.
“According to APE the acquired business is an extremely well-managed dealership operation that has achieving above benchmark returns,” D’Amato says.
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