There is certainly a fair bit of negative news out there, with the mounting concerns about China, a falling iron ore price and the market shedding points. It’s no wonder investors might be getting scared.
But here at SSR we believe you should put those concerns on hold. A falling Aussie dollar will be good for a host of companies, for a start.
“A lower dollar should help Navitas (NVT) as an education supplier, which is now earning more overseas. The lower dollar should also bring more students,” Peter explains.
Tom Elliot, over at Beulah Capital, is another analyst, who has similar views to the Switzer Super Report house view when it comes to banks and dividends.
“Telstra’s yield is still very good, the banks’ [yields are] still very good and if you can buy them at cheaper prices that’s certainly something we would do,” he said on Switzer TV on Sky last week.
He also says it’s a good time for acquisitions, with credit still cheap and limited opportunities for companies to expand organically.
A theme he likes is media ownership. He predicts that media ownership laws will be reformed soon, which will remove the limitation on TV stations reaching more than 75% of the Australian market.
“I reckon some of the regional subsidiaries will be taken over and one we like is Southern Cross (SXL),” he says.
SSR expert James Dunn says that for investors always on the lookout for an Australian company doing well overseas, financial services software provider GBST Holdings Limited (GBT) fits the bill.
GBST’s systems and software are used in the international capital markets and the company reported a strong result for FY14, with net profit up 66% to $10 million, on the back of a 19% rise in revenue, to a record $98.5 million.
That result was driven by international growth and investors need to see this progress continue. Importantly, about two-thirds of all revenue is now annuity-style income, from software licences.
“At $3.86, GBST is trading on 19.7 times forecast FY15 earnings and a lowly expected fully-franked yield of 2.7%, but it certainly looks capable of continuing to improve its margins and continuing its excellent growth track record,” James says.
Rudi Filapek-Vandyck mentions Flight Centre (FLT) and Ainsworth Game Technology (AGI) as companies worth watching.
Ainsworth Gaming has been able to grow revenue, mostly sourced both domestically and internationally from poker machines, for the past five years and Flight Centre also reported a good profit, after buying Topdeck Tours, based in the UK.
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