Michael McCarthy likes Whitehaven Coal (WHC). “The rebound in global coal prices that began in mid-August is yet to turn up in WHC’s share price,” he says.
“In my view, Australia is at “peak renewables” and the increasingly harsh economic realities (read higher power prices for everyone) will see a swing back to coal and gas that will suit current producers,” he adds.
Julia Lee likes Nanosonics (NAN). “Its key product is Trophon; a device that looks at infection control and cleaning for medical probes, such as ultrasound probes,” she says.
“The key growth market has been the US but there’s largely untapped potential in Europe and the UK.
“There’s a large research and development spend and the expectation is that the company will continue to develop and release products in the area of sterilisation and infection control,” she adds.
“A key risk comes if the existing product sales fail to meet expectations, or if new product launches are delayed or lacklustre,” she warns.
Michael doesn’t like TPG Telecom (TPM). “The 56% slump in profit was slightly better than expectations but the cost cutting that drove that improvement is in my view at odds with a business that needs to invest to grow.
“Optimism about the court case surrounding a potential merger with Vodafone is potentially an opportunity for investors to exit,” he says.
Julia has Cimic (CIM) on her dislike list. “It’s exposed to mining contract work and construction infrastructure. The upside in share price comes when contract wins are higher than expected,” she says.
“Its last result in July highlighted strong mining and weak construction.
“With public infrastructure unlikely to grow significantly from these current $40 billion levels and with many large energy infrastructure projects completed or nearing completion, growth is increasingly dependent on new wins in mining.
“At the current time, I can see few avenues of accelerating growth and the performance about executing current work in hand,” she adds.
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