This week ST Wong of Prime Value likes Baby Bunting (BBN). “Good short-term sales momentum has continued in the first four months of FY19 and competition has abated, thereby allowing for better gross margins,” ST says.
“Its share price has traded lower in recent weeks, due to concerns on consumer spending,” he adds.
Michael McCarthy from CMC Markets likes Flight Centre (FLT). “While the market outlook is clouded, the underlying trends in the Australian economy remains positive. In my view, the fears around the Australian consumer are overblown, and the $20 per share pull back in FLT’s share price since the August peak is a buying opportunity.
“The stronger Australian dollar may be the catalyst for gains in FLT’s shares,” Michael adds.
ST doesn’t like Metcash (MTS). “Improvements in both Coles and Woolworth’s supermarket sales and increasing promotional activity are likely to take market share from Metcash,” ST says.
“In the medium term, we expect the evolving strategies at both Coles and Woolworths to add cost pressures to Metcash operations, as Metcash responds to the competition,” he adds.
Michael doesn’t like Eclipx Group (ECX). “It’s hard to go against a takeover target but note that last week’s results announcement failed to impress a number of analyst. The takeover support is sliding, as MMS’s share price comes under pressure, and there are fears the integration of their two businesses could be messy. Add in rising interest rates and I see no reason to be in ECX,” he adds.
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