Stock Trading Recommendations for the Australian Stock Market.
Share to buy – APN Outdoor Media (APO)
The evolution of Billboards from static to digital has presented significant growth opportunities for APO.
The company, since IPO (Nov 2014), has secured both existing Static Billboards as well as development options to develop Digital Billboards.
Given the ability to modify advertising on-demand using sophisticated yield management techniques for digital formats, the potential revenue uplift is significant.
This can be observed by recent revenue trends whereby revenues have far exceeded the company's and market's expectation.
Given the scalability of digital formats, this translates strongly for profitability.
At their most recent update, the company has also upgraded guidance due to acquisitions, increased market share and an increase in penetration of digital formats.
The company also confirmed the renewal and expansion of key Airport related contracts, in particular with Sydney Airport.
Share to buy – Rio Tinto (RIO)
Since bottoming out near $38 in December, iron ore has rallied to presently be trading above $48.
- Overnight, the bulk commodity jumped 3%.
- The bounce in iron ore, unsurprisingly, has coincided with a bounce in Rio Tinto which has completed a basing pattern and now appears poised to push higher.
- We are looking for a short-term rally in Rio and active traders can consider being buyers.
Share to buy – Magellan Financial (MFG)
MFG's recent numbers speak for themselves:
- 41% increase in profit
- 38% increase in dividend
- exceptional net inflows and a reduction in employee expense to income
Technically, after a sharp pullback the stock found support around $20 and has bounced strongly.
The recent bullish candle was a confirmation candle and a signal that traders should be happy to buy into.
Share to buy – Toll Holdings Ltd
Toll Holdings (TOL) will sell five underperforming businesses, estimated to raise around $100m. We hail this as an improvement for operations and we’re now more confident the company can achieve its potential. Toll has an under geared balance sheet and as there is no need to reduce debt. As such, we suspect that there could be a capital return on the top of monetising the company's Singapore oil & gas supply base. On the technical front, TOL is displaying all the characteristics we would want to see. We have a solid bullish structure place, with the shorter-term EMAs crossed higher and the price action above the longer-term EMA filter, which is positive. Momentum is strong and amid an environment where yield plays are attractive, Toll Holdings fits the bills and should press higher. We’re targeting a move towards $6.80.
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