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 9 May 2022. You can access the full version of the article HERE.
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The CSL share price has been range bound for the last 2 years. It recently bounced off the lower part of its trading range and this upwards share price momentum continues to look positive. With plasma collections still improving, this buying support is likely to continue.
The recent quarterly result was solid with prices heading higher and cash costs heading lower. Production is still expected to ramp up further over the course of the year. The share price is back to the bottom of the trading range that has been in place since late December 2021 and this is therefore an opportunity to buy PLS at these cheaper levels.
We continue to be bullish on large resource stocks such as BHP. After being sold down from nearly $54 to nearly $45, BHP has seen some solid buying support re-emerge. Recent price action on the share price chart leads us to believe that BHP shares should recover from here and retest their all time highs.
The ALL share price has fallen substantially after peaking in November 2021. For a business with double digit earnings growth, it is now very attractively priced. Our analysis of the share price chart also indicates a slowing down of this downtrend and a high potential for the share price to start recovering from here.
Gold prices are easing back again and this has contributed to a recent fall in the share price of NST. The share price continues to have a poor correlation to the gold price because of recent production issues. The March quarter results were below analysts expectations and this should further weigh on the share price.
Businesses such as KGN are heavily exposed to rising costs and weakening demand for their goods. This adds a lot of risk to earnings and margins. Their recent sales numbers were well short of analyst expectations. We expect that the trading environment is likely to get tougher before it gets better.
Michael Gable is managing director of Fairmont Equities.
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