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 20 March 2023. You can access the full version of the article HERE.
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Buy Recommendations
ASX:NCM
We have been positive on gold stocks these past few months and still believe that NCM is a buy at current levels. The share price has been trending well since September and it remains in a reliable uptrend. An easing in rate expectations and a decrease in the US dollar will be a positive for gold prices. We also have the potential of a new takeover bid.
ASX:S32
The price action for S32 is looking very bullish on a weekly chart. it has recently broken above a major resistance level and is retesting it successfully. There is a high chance that S32 continues to trend higher from here. Low inventories in base metals should lead to a spike in prices when demand picks up later this year.
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Hold Recommendations
ASX:FMG
Every other analyst is bearish on FMG but we believe that iron ore prices can remain strong as the Chinese economy recovers and further restocking of iron ore takes place. We have also observed very strong buying support for FMG in the past few weeks and the chart therefore continues to look bullish.
ASX:CBA
As CBA approaches the lower end of its recent trading range, it starts to look as cheap as mid-2022 when uncertainty over interest rates and the state of the economy was at its worst. Although CBA is the most expensive bank, we believe that the price premium is justified because of its quality. Over the long-term, it outperforms the other big 4 banks.
Sell Recommendations
ASX:BOQ
The share price of BOQ has underperformed the market for a number of years now. A number of headwinds due to higher interest rates are set to hit the business. We also have uncertainty around the business direction due to the recent sudden departure of the CEO. The share price chart also remains in a downtrend.
ASX:CKF
The shares are trading at a high P/E for such low earnings growth, and even then the stock is pricing in a significant recovery over the next couple of years. We fail to see any catalysts to support this and the share price remains in a downtrend so the path of least resistance is for the share price to head lower.
Michael Gable is managing director of Fairmont Equities.
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