Stockbroking analysts continue to seek for value and buying opportunities through the rubble that is the Australian share market post the September-October global correction for risk assets. In Australia, the focus has clearly shifted towards energy stocks and miners, both sectors have had to endure tougher times than others in the share market thus far in 2014.
In the good books
AGL Energy (AGK) was upgraded to Outperform from Neutral by Credit Suisse. Surplus generation capacity has pushed wholesale electricity prices down to marginal cost levels and Credit Suisse observes this limits the downside to wholesale price as the supply curve cannot be compressed any further. AGL is the clear winner in this regard, with the downside priced in. The company has a fixed price coal supply and a large generation footprint and remains the most leveraged to the upside in power prices.