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 28 February 2022. You can access the full version of the article HERE.
To stay up to date with our best recommendations, sign up to an 8-week FREE TRIAL of our weekly client research.
The outlook for earnings is strong for this mining services company and the valuation remains cheap. From a charting point of view, the share price had spent the last few months building a nice base before breaking higher after their half year results. We now expect the shares to enter a new uptrend.
A recovery is iron ore prices from their lows 6 months ago is now starting to be felt in the share price of MGX. The shares had spent the last quarter bottoming out on the chart but in the past couple of weeks they have broken free of this baseline on strong volume. MGX is now entering a new uptrend, supported by rising iron ore prices.
BHP shares remain in an uptrend since bottoming out in November 2021. Their recent half yearly result was robust and the market seems to be happy with the dividend announcement. BHP is well placed to weather high inflation as commodity prices should continue rising from here.
Their recent half yearly results have once again shown that CBA is the highest quality bank out of the big 4. Despite the share price falling in the past few days, we continue to see some very strong buying support on the share price charts whenever the stock trades in the low $90’s. Once general market uncertainty is out of the way, CBA shares are expected to trend higher again.
Although we were buyers of WPL at the start of January, it is now time to sell. With oil prices spiking into trendline resistance, and the recent moves higher containing a FOMO element to it, we believe that it is now time to take profits on oil stocks.
AUB is a the largest equity based insurance broker in Australia and New Zealand. Their half year results on 22 February missed analyst estimates with underlying earnings per share increasing by only 1.68% on the prior corresponding period. The share price therefore looks expensive for this rate of earnings due to it having a P/E ratio close to 22x FY22 earnings . The share price was trading at $21.50 on 24 February.
Michael Gable is managing director of Fairmont Equities.
Would you like us to call you when we have a great idea? Check out our services.
Disclaimer: The information in this article is general advice only. Read our full disclaimer HERE.
Like this article? Share it now on Facebook and Twitter!