Michael likes Computershare (CPU), though he points out that a number of brokers have downgraded CPU’s outlook on the margin impact of lower interest rates and the potential for the new CFO to “clear the decks”. “In my view, these analysts are jumping at shadows and ignoring the potentially positive impact of rising equity markets,” he says.
“While not a huge long-term fan, I am happy to get contrarian around $15 per share, which represents a below market P/E ratio between 14x and 15x. Full year result is due 14/8/19,” he adds.
On the other hand, Michael holds a different view on Mirvac Group (MGR). “I don’t like MGR,” says Michael. “At its full year result on 8/8/19, reported profits fell just 6% last year.
“A stronger office and industrial performance outweighed the weaker residential contribution.
“With residential pre-sales now down more than two thirds from their high. the earnings pipeline at MGR looks hollow to me.
“The post-result rally could be a good sale opportunity,” he adds.
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