CMC Markets’ Michael McCarthy is not “usually in the real estate investment trust space” but this week he likes Cromwell Properties (CMW).
Last week CMW bought a 9.9% stake in the Investa Office Fund. Dexus Property (DXS) had previously offered a takeover deal of the fund.
“The Dexus/Investa proposal should shake up the sector. I see plenty of potential winning scenarios for CMW shareholders from this development,” McCarthy says.
McCarthy doesn’t like the supermarket giant Woolworths (WOW), despite last week’s rally.
“Many investors are asking, “is it time to buy WOW?” The short answer is no,” he says.
“Increasing competition, a new senior team, lack of strategy and legacy drags on the balance sheet all need attention before this will stack up in my book.”
Chartist and Sharewealth Systems’ Gary Stone also does not see much “wow” in WOW.
“When WOW fell below $22.60 it broke out of a strong support zone to the downside,” Stone says.
“There’s not much support for quite some way,” Stone says.
If the stock falls way down to a zone between $13-$14, Stone says “it certainly would be “Wow!” if it’s gone down there.”
Stone likes Brambles (BXB) and he notes that the stock looks like it’s on its way to challenge its all time high of $13.89, set back in 2007.
“Currently trading at $12.07, its next milestone is $12.74,” he says.
[1]Lincoln Indicators’ Jacob Simonsen likes Technology One (TNE).
Participating in the growing technology sector, Simonsen says TNE typically trades at a premium to its intrinsic value, due to its long history of growth and excellent management.
“The business maintains a strong recurring revenue base, growing its annual license fees at an encouraging rate,” he says.
Simonsen doesn’t like Freedom Foods (FNP) due to some emerging business challenges associated with its expansion plans.
The company plans to capitalise on the changing nature of food consumption and its growing presence in overseas markets.
“Participating in a highly competitive industry, the business must maintain a substantial reliable supply chain in order to maintain manufacturing capacity to meet increasing demand,” Simonsen says.
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