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 27 September 2021. You can access the full version of the article HERE.
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CSL’s has underperformed the market over the last year. However, I can now see some good buying support in the stock and it has broken above some important resistance levels. The technical set-up here for CSL is now telling me that it will start to rally strongly once again and I can see it surpassing its highs from early 2020.
The recent full year results were solid, but it appears as though the valuation for WES was stretched. This saw the share price fall back over the last few weeks. We are now at a level though where the valuation is more appealing and there also appears to be strong support at these levels on the chart. With a capital return due to shareholders later this year, it is now the time to get back into WES.
The recent drop in iron ore prices has surprised even the most bearish of analysts. This fall, however, does appear overdone and FMG shares are already finding some strong buying support at current levels. As the Chinese increase demand in iron ore again to maintain economic growth, the price of this commodity is bound to recover, and with it the FMG share price.
ALL is one of our favourite business and it has done very over the past year. Recent share price volatility suggests that we may see a softening in the share price. However, the overall uptrend is still positive. In a world where the market is going to be concerned about levels of economic growth, investors will be attracted to the dependable and high earnings growth of ALL.
Earnings momentum is slowing for this insurer, and cost savings might be needed to support volume growth. The share price has been in a downtrend for the last two years and recent selling pressure on high volumes suggests that the risk is still to the downside.
The recent announcement by the company that they are moving into plastic pallets now places extra uncertainty around the business. A significant investment here may not yield results for a while, and there is scope for costs to increase along the way or for the benefits to be downgraded. Recent selling in the stock suggests that investors are heading for the exit and the share price is likely to take another dip.
Michael Gable is managing director of Fairmont Equities.
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