“I like Challenger (CGF),” says Michael confidently, “because CGF’s prominence in annuities comes into focus in a lower interest rate environment.
“With expectations of rate cuts in Australia increasing, CGF could be a major beneficiary.
“Earnings forecasts were re-based in January, and upward revision could support a higher CGF share price,” he maintains.
“On the other hand, I don’t like the rail and freight operator Aurizon (AZJ),” he says.
“Aurizon has risen strongly since lows just six month ago and while the outlook for bulk cargo carrying has improved with the iron price and a better outlook for coal, the current P/E around 22 times makes AZJ look expensive to me,” he adds.
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