Uranium shares in line for a rebound after year of price falls

Uranium stocks have had a rough year but feature highly in this week’s “buy” recommendations from our Share Tips columnists.

The price of uranium has fallen 14 per cent from its highs hit in early January, but that hasn’t stopped both our Share Tips columnists slapping “buy” recommendations on uranium companies.

Explorer Elevate Uranium and Perth-based mining giant Paladin Energy have both had serious share price falls this year, prompting experts to believe they are currently undervalued.

Their other buy recommendations were more traditional ASX stocks CSL and James Hardie Industries, while gaming machine company Aristocrat Leisure earned itself two “hold” recommendations following solid recent results.

Cumulus Wealth partner, wealth management, Mark Goulopoulos:

BUY

CSL (CSL)

It is a global healthcare leader in blood plasma, boasting a robust research and development portfolio and forecasted double-digit earnings per share growth in the coming years.

Elevate Uranium (EL8)

An undervalued uranium explorer with multiple defined resources and further exploration upside. It is currently developing a pilot plant for its U-pgrade uranium beneficiation process.

HOLD

Aristocrat Leisure (ALL)

It recently delivered solid results in line with market expectations and reaffirmed a positive outlook, particularly in its North American business.

RPM Global (RPM)

A high-quality software provider for blue chip mining companies, it is bolstered by a strong balance sheet and a solid growth outlook.

David Thang from Sequoia Wealth Management

Mark Goulopoulos from Cumulus Wealth

SELL

Reece (REH)

The plumbing supplies company is very fully valued, with high expectations factored in despite it being a cyclical business. Forecast earnings per share growth is modest.

Westpac Banking Corporation (WBC)

The share price is up 50 per cent over the past 12 months but faces growth pressures. A recent profit decline underscores challenges, while the valuation remains high.

Sequoia Wealth Management senior private wealth adviser David Thang

BUY

James Hardie Industries (JHX)

The global building products provider recently reported earnings that were 5 per cent better than market expectations, due to higher-than-anticipated market share growth and improved operational efficiencies.

Paladin Energy (PDN)

Production challenges due to lower-than-expected grades from existing stockpiles and water shortages led to a significant drop in the share price. However, the balance sheet remains firm, and there are no concerns about fulfilling commitments to customers.

Paladin Energy's Langer Heinrich uranium mine in Namibia. Picture: Supplied

HOLD

Life360 Inc (360)

The US-based technology platform that designs and owns tracking software has released solid numbers with increased earnings, operating cash flow and subscribers.

Aristocrat Leisure (ALL)

A leading global developer, manufacturer and distributor of gaming machines and software, it has a strong market position. High barriers to entry ensure earnings stability.

SELL

Super Retail group (SUL)

It operates a chain of retail stores throughout Australia and is facing increased operating costs. Supply chain challenges and inflation have hurt profitability and investor confidence.

TPG Telecom (TPG)

Profit is down amid rising costs from leasing agreements and high interest rates. Other companies appeal more.