The Bull: Buy – Hold – Sell 2.7.18

BUY RECOMMENDATIONS
InvoCare (IVC)

Chart: Share price over the year

 

Provides funeral services in Australia, New Zealand and Singapore. The stock is down about 25 per cent since its high of  $18.15 late last year. The company closed sites to complete refurbishments as part of its ‘Protect and Grow’ strategy. Investors reacted by over selling the stock, in our view. While the share price may not bounce right away, IVC is positioning to capitalise on a growing and lucrative market over the longer term.  Shares in this market leader were trading at $13.76 on June 28.
Speedcast International (SDA)

Chart: Share price over the year

 

Momentum is favouring this emerging business that provides satellite-based communication networks and services. The shares were priced at $5.09 on April 3. On June 28, the shares were trading at $6.26. SDA buys satellite capacity from operators and then resells the satellite usage and telecommunication services to more than 100 different customers primarily operating in remote locations, such as ships and offshore oil rigs. The company continues to reduce debt and is winning new global contracts in a growth industry.
HOLD RECOMMENDATIONS
Paragon Care (PGC)

Chart: Share price over the year

 

PGC is a leading provider of medical equipment, devices and consumables, mostly for the Australian and New Zealand healthcare markets. The company has progressively acquired 13 quality businesses in the past seven years, and all have a strong market presence with their respective offerings. This aggressive acquisition program enables Paragon to provide end-to-end solutions in an industry set to grow rapidly along with the ageing population.
NextDC  (NXT)

Chart: Share price over the year

 

This data centre provider offers a range of services to corporate, government and information technology companies. Data centre businesses tend to enjoy strong operating leverage, as, once built, operating costs remain relatively fixed, while additional revenues are earned at minimal extra cost. The shares have risen from $5.46 on January 22 to trade at $7.71 on June 28.
SELL RECOMMENDATIONS
Greencross (GXL)

Chart: Share price over the year

 

A veterinary services giant, with more than 150 practices and more than 240 pet speciality retails stores in Australia and New Zealand. Recently, the company came under pressure after issuing a profit warning worse than market consensus, and earnings per share have dropped consecutively for the past three years.
CSR (CSR)

Chart: Share price over the year

 

Makes and supplies building products in Australia and New Zealand. Higher than expected supply chain costs in the aluminium division led to a downgrade of fiscal year 2019 estimates. Given a slowdown in Australian housing construction, we believe the sector may be close to the top of its earnings cycle.
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By | 2018-08-27T04:49:32+00:00 July 2nd, 2018|Articles|