Share Tips: This week’s buy, hold and sell recommendations
Every week two experts from our Share Tips columnist pool give us their buy, hold and sell recommendations.
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It’s no easy gig analysing share prices and company performance but somebody’s got to do it. Every week two experts from our Share Tips columnist pool give us their recommendations.
Jed Richards – Shaw and Partners
BUY
Financial services software company Iress presents a good buy due to its strong recurring revenue, strategic focus on core Australian markets, expected 3.7% annual earnings growth and a forecast 19.4% return on equity over the next three years.
This marketing company is a strong buy due to its consistent earnings growth, 21.9% forecast return on equity, strategic acquisitions and a solid FY25 outlook with a 29% NPAT increase and solid dividends.
HOLD
While this skilled services company has delivered strong strategic growth since listing and boasts a forecast 20.9% annual earnings growth, recent price volatility and a 27% pullback suggest a hold is prudent. With a dividend yield above 3.3% and recent acquisitions resulting in growth, we prefer to wait for clearer momentum before adding to positions.
Resmed’s core sleep apnea and respiratory care business remains strong, supported by global demand. However, valuation seems high, and near-term growth may be tempered by competitive pressures. Long-term fundamentals remain intact but patience is warranted.
SELL
Despite long-term demand for iron ore, FMG shares have dropped nearly 35%, reflecting pressure from China’s property slowdown and volatile iron ore prices. I prefer diversified mining operations like BHP’s.
Despite good quality infrastructure assets and a 4.5% dividend yield, this stock appears overvalued (trading ~20% above fair value). Investors bought up while the market was volatile and this has resulted in excessive share price. As growth remains modest, I can’t see value here.
David Thang – Sequoia Wealth
BUY
A leading provider of critical radio technologies, Etherstack has strategic partnerships with Samsung and AT&T. It has expanding recurring revenue streams with support contracts spanning over 15 years.
Polynovo offers wound care technology that’s gaining traction globally, particularly in the US. Strong sales growth and increasing adoption by surgeons support its multi-year growth trajectory.
HOLD
A market leader in family safety and location services, this company has reported a solid result, achieving positive net income and growth in operating cash flow.
Leading energy infrastructure company with stable earnings. Investors are rewarded with a 7 per cent dividend yield, which is 10 per cent franked.
SELL
The healthcare company has issued a soft trading update and lower earnings guidance. There are potential profitability concerns in its core business. We favour others.
Group revenue declined year-on-year. The pet-sitting company operates at a loss, indicating ongoing cash burn. Other companies appeal more.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead does not provide, endorse or otherwise assume responsibility for any financial advice contained in this article.
Originally published as Share Tips: This week’s buy, hold and sell recommendations
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