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 4 March 2024. You can access the full version of the article HERE.
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Buy Recommendations
ASX:SFR
We remain positive on the prospects for copper as low supply and global demand should see higher prices over the next few years. SFR is the largest pure-play copper producer on the ASX. The stock is now starting to break above a 3 year resistance level on the chart which means that it is now starting a new uptrend.
ASX:MQG
It was interesting to see that despite the recent quarterly update being described as “weak” by analysts due to lower than expected profits, the share price has rebounded strongly. This is a bullish sign as it shows that the share price was factoring in a lower result. The stock has managed to remain in an uptrend and it should do well, along with the broader market, for the rest of the year.
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Hold Recommendations
ASX:RMD
Since the lows in 2023, RMD has been in a sustainable uptrend and we don’t see any warning signs yet from a charting perspective. The shares still look undervalued as the recent decline in share price unwinds. This weakness was driven by concerns that the business will be negatively impacted by weight loss drugs.
ASX:BPT
We maintain the view that energy prices will head higher as demand should stay robust but supply will continue to be a problem over the next few years. BPT is experiencing strong growth and the share price chart has turned positive, indicating a recovery is now underway from here.
Sell Recommendations
ASX:WOW
The earnings growth for Woolworths is too low for its valuation. The recent 1H results also showed profits and margins being under pressure. Valuations held up during the past two years as investors flocked to defensive stocks, but that premium is now starting to be unwound and the shares are expected to under perform the broader market again.
ASX:LLC
The share price has been trending lower and that doesn’t appear to be ending any time soon. Their recent half year result was a big miss compared to expectations. Earnings were down and gearing was up. With management unable to turn the business around, the share price should continue to slide from here.
Michael Gable is managing director of Fairmont Equities.
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