Share tips and stock recommendations for the Australian (ASX) share market – buy, hold, and sell. Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.
This post is an extract from the newsletter dated 19 September 2022. You can access the full version of the article HERE.
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Aristocrat is a high quality business with a great track record of double digits earnings growth over the years. Although the broader share market bottomed in June, Aristocrat shares were already on the way back up from their low point in May. The share price has continued to edge higher since then, despite boarder market volatility. This is a very bullish sign from a charting point of view.
We believe that rising energy prices will be with us for some time and Santos will therefore continue to benefit from these higher prices. The share price is down from the June peak because of a short-term pullback in the oil price. However, this looks like a buying opportunity as the share price has firmed up down here and it is starting to get back into an uptrend.
This coal miner is benefitting from higher prices for thermal coal and we believe that coal prices will stay elevated for a while longer. The valuation for TER continues to look attractive when compared to some of the larger listed companies. The current uptrend in the share price remains very strong and sustainable.
Worley’s earnings outlook remains positive as capital expenditure in the oil and gas sector and therefore demand for Worley’s services is expected to remain strong. The share price has recently taken a breather from the strong uptrend that was in place in the first half of this year. However, good buying support is now evident at these levels and we expect the share price to resume the uptrend.
The lithium sector has been a great sector to trade, but it can run ahead of itself due to exuberance around the future for lithium. We have reached another one of those points where the vertical move now in PLS is unsustainable and we expect profit taking to kick in up here and bring the share price back down to lower levels.
The share price still looks expensive based on NAN’s expected earnings growth. Any potential benefits from the change in the company’s distribution model is still a while away and that leaves investors with too much uncertainty. The charting profile also looks weak due to a lack of buying support at current prices.
Michael Gable is managing director of Fairmont Equities.
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