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 7 November 2022. You can access the full version of the article HERE.
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This global building manufacturer is well positioned to benefit from an economy that recovers from a recession. If the recent share price drop is already pricing in a recession, then these are the levels to start buying again. The share price charts also show a stock that has potentially bottomed out.
CSL’s share price has been relatively flat in the past two years. Because CSL is a growth stock, interest rate rises have kept a lid on the share price. However, the recent acquisition of Vifor should add to CSL’s earnings next year, and a topping out in interest rates should also aid in a share price recovery.
ALL’s share price is down for the year because of the effect that rising interest rates has on high P/E stocks. However, the company continues to grow its earnings as gaming revenue continue to exceed pre-covid levels. Looking at the share price chart, it appears to have bottomed out in May and it is starting to edge higher again.
After merging with BHP’s energy assets, WDS is now a $63bn energy business and the largest of its type in Australia. Emerging supply constraints in the US and the Middle East should see oil prices recover from here. This should lead to a recovery in the share prices of major energy stocks like WDS. The share price remains in an uptrend and upside momentum continues to look strong.
In late May, the company announced that it was working with the US FDA to import their infant formula into the US. The share price shot up on the day, but it has been heading south ever since. The market got ahead of itself and the share price is continuing to drop back down to earth. The recent quarterly result was underwhelming and we expect the selling to continue.
SFR is a copper producer, but not even the recent takeover approach of Oz Minerals, another copper producer, has been enough to buoy the sector. On the share price chart, SFR was recently finding support near $3.60, but that ended up failing and the stock price is back into a downtrend. Copper prices are soft at the moment and it looks like the share price of SFR will get worse before it gets better.
Michael Gable is managing director of Fairmont Equities.
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