There is a lot on the radar following on from quite a positive few weeks of earnings reports (you can read James Dunn’s article today).
Online jobs site SEEK (SEK) was one of the best performers, it exceeded expectations with a 38% rise in revenue and a 29% increase in net profit, which resulted in a 40% increase in dividend payout. It’s also just announced the acquisition of JobStreet to further its expansion in Asia. It could be a little expensive though. FN Arena has a consensus target price of $15.59, whereas it is currently trading at in excess of $16. Time to take profit?
“Fund manager Rhett Kessler of Pengana likes two contrarian play stocks – Resmed and Seven West Media. Both are quality companies with good management,” Peter Switzer says.
Pengana Australia Equities Fund portfolio manager, Rhett Kessler, was on Switzer TV last week and explained his company’s conservative approach along with why he likes these two companies.
“Resmed [has had] 75 consecutive periods of growth and we think they’ve barely scratched their market,” Khessler said on the program.
The stock has been knocked about a bit lately due to the presumption that it may be about to go ex-growth following a couple of tough quarters. But Pengana believes the fundamentals – high single digit growth, a strong cash box i.e. no debt, being economically independent and well diversified geographically – make it a good buy.
“There has never been a bigger short position on the stock and we like that,” he said.
Seven West Media is also quite unpopular at the moment, which makes it cheap.
“If you can buy a well run business in a structurally sound industry TV…on ten times earnings … at the bottom of the advertising cycle in TV we think that’s a good bet,” Khessler said.
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Also in the Switzer Super Report:
- Peter Switzer: Stocks heading higher – thanks Joe Hockey!
- Paul Rickard: Banks still worth it
- James Dunn: Solid profit season moving to a close
- Rudi Filapek-Vandyck: Buy, Sell, Hold – what the brokers say
- Gary Stone: Has the commodity cycle turned?
- Tony Negline: How to segregate assets in an SMSF
- Brittany Ruppert: New record clearance rate high of 82%