Michael McCarthy likes Challenger (CGF). “This financial products group is under share price pressure, after guiding analysts’ profit estimates lower last week, and is trading at four-year lows,” he says.
“However, one of its greatest successes over the last decade was higher yielding, capital stable products.
“As growth concerns mount and central banks leap into action, these products could represent a competitive edge for CGF, which may mean CGF earnings are at a turning point, and the share price could follow,” he adds.
Although an admirer of the business, Michael doesn’t like the outlook for Fortescue (FMG).“The ‘catch up’ in share price as iron ore prices rose has pushed the share price to 11-year highs,” he says.
“At levels close to $9, FMG could be vulnerable to a significant correction.
“Active investors may seize the opportunity to take profits now and buy back at lower levels,” he adds.
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