5 Great Income Ideas for 2020

Monday 02 December 2019 5 great income ideas for 2020

Troubles in Hong Kong raise question marks about the trade deal but this shouldn’t stop you from buying good stocks now. In my article today, I give you a list of the stocks that are in favour with the experts right now.

In his eleventh review for 2019, Paul (Rickard) looks at how our model income and growth portfolios performed in November, which hold the majority of their exposure to the financial sector through the major banks, were hit by the Westpac scandal but still managed to post solid gains for the month.

Sincerely,

Peter Switzer

Inside this Issue 02 What stocks are in favour with experts right now? Trade deal? by Peter Switzer 04 Portfolio returns up despite Westpac woes Record highs by Paul Rickard 07 5 great income ideas for 2020 SGF, HLO, A2B, VHY & RDV by James Dunn What stocks are in 10 Buy, Hold, Sell – What the Brokers Say 11 downgrades, 10 upgrades favour with experts by Rudi Filapek-Vandyck right now? 13 My “HOT” stock — I like Ooh Media (OML) by Peter Switzer OML by Maureen Jordan 02

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before Switzer Super Report is published by Switzer Financial Group Pty Ltd AFSL No. 286 531 acting, consider the appropriateness of the information, having regard to the Level 4, 10 Spring Street, Sydney, NSW, 2000 individual's objectives, financial situation and needs and, if necessary, seek T: 1300 794 893 F: (02) 9222 1456 appropriate professional advice. What stocks are in favour with experts right now? by Peter Switzer

The silence from China since the Donald Trump (AMA) a big thumbs up. FNArena still thinks this decision to support the pro-democracy protestors in company is 21% short of the target set by the Hong Kong with two pieces of US legislation is a little consensus of analysts. too eerie for me. I hope it means that getting a trade deal is more important to the Chinese than it is to The year-to-date story has been positive, as the chart have dominance over Hong Kong, free of US below shows: interference. But that’s me in Dusty Springfield mode — “just wishin’ and hope’n”. AMA Group

And with our market now at record highs, I know lots of market players are wondering if they need to gear up for a sell off. If the trade deal falls over because of the Hong Kong affair, I’d expect a sizeable dumping of stocks but right now, no one of significance is predicting this and long may that remain that way.

AMP Capital’s Dr Shane Oliver is betting that Hong Source: au.finance.yahoo.com Kong won’t stop the trade deal. “Our assessment remains that the pressure on both sides to ease trade At the Wilson conference, Gabriel Radzyminski from tensions – even if it’s just for 6-12 months – is now Sandon Capital, plucked Consolidated Operations far more intense than has been the case over the last Group (COG) out of thin air. 18 months.” Consolidated Operations Group (COG) So based on this, what stocks are in favour with experts right now?

On Friday, the Wilson Asset Management Group put on an investment conference and Matt Haupt, who looks after the blue chip strategy, gave AMCOR (AMC) the thumbs up. He made the point that the stocks is trading about 16 times forward earnings, but Haupt expects growth of 10-12%, which is higher Source: au.finance.yahoo.com than what the company predicts at 5-10%. This company runs the largest broker network for Looking to FNArena for a leg up and the consensus is SME finance, with the AFR putting it at 16%. Gabriel a 4.9% upside view for the stock and if history is a thinks the face-to-face broker model still has an guide you’d expect at least a 4% dividend or higher. advantage over the fin-tech app model at this stage and if our economy improves over 2020 (as the RBA While on Wilson Asset Management and the founder expects), then small business borrowing should rise. Geoff Wilson on November 20 gave AMA Group

Monday 02 December 2019 02 FNArena doesn’t survey the company but the chart above shows when the economy was stronger, the share price reflected it. I suspect this stock will be very sensitive to an economic rebound of the Oz economy.

Last week I told you how Tribeca Investment Partners’ Jun Bei Liu liked a2 Milk (A2M) and here’s the five day showing:

a2 Milk

Source: au.finance.yahoo.com

Well last Friday at the Wilson conference, Jun Bei gave the big tick to Tyro, which lists on Friday and our own Paul Rickard has been on its board. Paul is too close to give a tip but it’s interesting to see the Tribeca team positive on the listing.

This is what the AFR’s James Thomson reported: “Bei Liu says the firm has won favour with retailers for providing a highly functional and integrated payments platform with less downturn than those provided by the big banks, and has already grabbed a 2.7 per cent share of a market she says is worth $651 billion, and growing at 7.5 per cent a year.

“Tribeca believes Tyro can get its market share to 5 per cent, which would triple its revenues.”

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.

Monday 02 December 2019 03 Portfolio returns up despite Westpac woes by Paul Rickard

Despite Westpac’s woes, the Australian share weighting of the ‘materials’ sector on the market followed the lead of Wall Street and tested S&P/ASX 200 is currently 18.9%, and under record highs in November. Healthcare continued to this rule, our possible portfolio weighting is in be the sector setting the pace. Our model portfolios, the range from 12.6% to 25.2% (i.e. plus or which hold the majority of their exposure to the minus one third or 6.3%); financial sector through the major banks, were hit by we require 15 to 20 stocks (less than 10 is the Westpac scandal but still managed to post solid insufficient diversification, over 25 it is too gains for the month. hard to monitor), and have set a minimum stock investment size of $3,000; In the eleventh review for 2019, we look at how our our stock universe is confined to the ASX 100. model income and growth portfolios performed in This has important implications for the growth November. portfolio, because the stocks with the best medium term growth prospects will often The purpose of these portfolios is to demonstrate an come from outside this group (the so called approach to equity portfolio construction. As the rule ‘small’ caps); sets applied are of critical importance, we provide a we avoid stocks from industries where there quick recap on these. Also, it is important to note that is a high level of exogenous risk, such as these portfolios are designed as “long only”. They airlines; don’t allocate to “cash” and don’t represent a view for the income portfolio, we prioritise stocks about the outright direction of the market. that pay fully franked dividends and have a consistent record of paying dividends; and Portfolio recap within a sector, the stocks are broadly weighted to their respective index weights, In January, we made some adjustments to our although there are some biases. Australian share ‘Income Portfolio’ and ‘Growth Portfolio’ Overlaying these processes were our predominant (see investment themes for 2019, which we expected to https://switzersuperreport.com.au/here-are-our-portfol be: ios-for-2019/ ) Economic growth to slow in the USA, Europe, The construction rules for the portfolios are: China and Japan, but not into recession territory; we use a ‘top down approach’ looking at the The US Fed moving to a more neutral stance prospects for each of the industry sectors; on US interest rates. If not pausing, only one for the income portfolio, we introduce biases or two more hikes in 2019 (but no expectation that favour lower PE, higher yielding sectors; of rate decreases); so that we are not overly exposed to a market Interest rates in Australia to remain at move, in the major sectors (financials and historically low levels, with the RBA unlikely to materials), our sector biases will not be more move rates higher (but again, no expectation than 33% away from index. For example, the of rate decreases);

Monday 02 December 2019 04 Aussie dollar around 0.75 US cents, but with All sectors are positive for the year, although the gap risk of breaking down if the US dollar firms; between the best (healthcare and IT) and the worst Oil price remaining well supported around (financials and utilities) widening considerably over US$50 per barrel. Base metal and iron ore the last couple of months. prices to soften; A positive lead from the US markets; Returns for the 11 industry sectors in November and Growth in Australia to ease to around 2.5%, calendar 2019, plus their respecting weighting as part with no real pick-up in domestic inflation; of the ASX 200, are shown in the table below. Housing prices in Australia to ease moderately, but not collapse.

Performance

The income portfolio is up by 22.04% and the growth oriented portfolio by 24.15% (see tables at the end). Compared to the benchmark S&P/ASX 200 Accumulation Index (which adds back income from dividends), the income portfolio has underperformed the index by 4.09% and the growth oriented portfolio by 1.98%.

Income portfolio

On a sector basis, the income portfolio is moderately Health care leads, financials lag badly overweight financials and utilities, and underweight materials and health care (where there are no Health care was again the sector setting the pace in medium or high yielding stocks in the ASX 100). November with a return of 8.9%. Year to date, it is the Otherwise, the sector biases are reasonably minor. best performing sector in the market with an astonishing return of 47.4%. Led by CSL, Resmed On paper, it is roughly index weight in industrials. and Cochlear, it is now the third biggest sector in the However, this exposure is being taken through toll S&P/ASX 200 with a weighting of 10.5%. road operator Transurban which is not your typical industrial stock. Information technology was the best performing sector in the month with a return 11.0%. Consumer In the expectation that interest rates in Australia are staples and communication services also enjoyed staying at record low levels, it has a defensive healthy returns. An increase in iron ore prices offset orientation and a bias to yield style stocks. In a bull weakness in the gold price to support the materials market, we expect that the income portfolio will sector, which rose by 4.7%. underperform relative to the broader market due to the underweight position in the more growth oriented At the other end, the biggest sector on the ASX, sectors and the stock selection being more defensive, financials, which comprises 29.7% of the S&P/ASX and conversely in a bear market, it should moderately 200 by weighting, lost 2.1%. This followed Westpac’s outperform. woes with an anti-money laundering scandal, and flow on impacts to ANZ and NAB. Year to date, the In November, the income portfolio returned 1.68%, sector lags badly with a return of 15.4%, 10.7% below underperforming the market by 1.6%. Year-to-date, it the overall market. The utilities sector also lost has returned 22.04% for a relative underperformance ground. of 4.09%. A key reason for the underperformance has

Monday 02 December 2019 05 been the absence of any healthcare stocks (the best The underperformance in November was primarily performing sector on the ASX), plus in November, the due to an overweight position in the major banks mark-down in banking stocks following Westpac’s (Westpac, NAB and ANZ). Reliance slipped, while anti-money laundering scandal. Link also struggled. This was offset to some extent by the ongoing performance of CSL. The return includes both capital and income. On the income side, the return is currently 5.75%, franked to No changes to the portfolio are contemplated in the 87.8%. When final distributions from Transurban, short term but we will be reviewing and re-balancing Dexus and APA are received, the income return for the portfolio at the end of December. the year on the original $100,000 will be 6.15%, franked at 82%. This will comfortably exceed our Our growth-oriented portfolio per $100,000 invested original forecast of 5.78%. (using prices as at the close of business on 29 November 2019) is as follows: No changes to the portfolio are contemplated in the short term, but we will be reviewing and re-balancing the portfolio at the end of December.

¹Does not include the tax benefit of accepting the ¹ Aristocrat ($4,000) purchased 1/1/19 @ $21.84, sold Woolworths off-market share buyback 31/5/19 @ $29.12 for profit of $1,333 ² Challenger ($4,000) purchased 1/1/19 @ $9.49, Growth portfolio sold 31/5/19 @ $8.07 for loss of $599 ³ Following sale of Aristocrat and Challenger, The growth portfolio is moderately overweight proceeds re-invested on 31/5/19 into $3,734 NAB @ financials and energy, and underweight materials, $26.49, $2,000 CSL @ $205.49 and $3,000 consumer staples and real estate. Overall, the sector Bluescope @ $10.54. biases are not strong. Important: This content has been prepared without The stock selection is marginally biased to companies taking account of the objectives, financial situation or that will benefit from a falling Australian dollar – either needs of any particular individual. It does not because they earn a major share of their revenue constitute formal advice. Consider the offshore and/or report their earnings in US dollars. appropriateness of the information in regard to your circumstances. In November, the portfolio returned 2.31% for a relative underperformance of 0.97%. Year-to-date, it has returned 24.15% for an underperformance of 1.98%.

Monday 02 December 2019 06 5 great income ideas for 2020 by James Dunn

With no sign of interest rate rises, and term deposit is limited. rates barely keeping up with inflation at less than 2%, income-oriented investors still find themselves drawn 1. SG Fleet Group (SGF, $2.69) to the share market, where the average grossed-up Forecast FY20 dividend yield: 5.3%, fully franked dividend yield is more than 4% – with plenty of stocks Forecast FY20 grossed-up yield: 7.5% “offering” yields quite a bit higher than that. (The Forecast FY20 dividend per share: 14.2 cents caveat, of course, is that dividends are wholly at the Forecast FY20 free cash flow per share: 23 cents discretion of the company, and can be cut, or (source: StockDoctor) dispensed with altogether, if the financial Forecast FY20 dividend payout ratio: 66% circumstances dictate. But while dividends can never Analysts’ consensus valuation: $2.76 (Thomson be considered as guaranteed, they can be a very Reuters), $2.877 (FN Arena) handy generator of income for a portfolio, especially when the turbo-charging impact of franking credits is Fleet management services group SG Fleet provides considered.) motor vehicle fleet management, vehicle finance and salary packaging services in Australia, New Zealand What income-oriented investors need to look for is and the UK. The company did not, on first viewing, companies that have the free cash flow to back their have a great FY19: revenue declined by 1%, to dividends comfortably, and also, which have a payout $509.7 million; net profit fell 10%, to $60.5 million; the ratio (proportion of the net profit that is paid-out in dividend slid 4%, to 17.7 cents; and total fleet size dividends) that does not put pressure on them to was down 5%, after it lost 7,153 vehicles managed on crimp the dividend if there are competing priorities for behalf of the Western Australian government. cash, such as reinvestment. Across the Australian Securities Exchange (ASX), the dividend payout ratio But in other ways, investors in SG Fleet saw the currently averages about 70%, according to AMP future: the company launched its new Inspect365 Capital, so we want to see companies with a lower heavy vehicle inspection and compliance system, its ratio than that, which means they can be considered eStart electric vehicle transition planning service, and to be on the safer side – even with the ever-present also bought a stake in Collaborate, a peer-to-peer volatility of company earnings. marketplace platform that offers a car subscription product. SGF has invested $2.2 million and will also In contrast, many of the top dividend payers on the provide about 100 vehicles to Collaborate to boost Australian stock market have payout ratios that have the growth of its Carly car subscription division. SGF edged up to about 85% – and even higher – so there says these innovations are part of a clear strategy to is very little room for disappointment in terms of a diversify its revenue streams. lowered dividend. FY20 is also unlikely to be a stellar year for the Here are 3 smaller-stock situations where, even with company, either. But for alert yield investors, the the equity risk, I think income-oriented investors could expected rebasing of SGF’s dividend – down to find attractive opportunities – with the added bonus of somewhere in the range of 13.9 cents (FN Arena’s a bit of potential share price upside, or at the very expectation) and 14.2 cents (Thomson Reuters’ least, an expectation from analysts that the downside expectation) – gives a yield of about 5.3%, which

Monday 02 December 2019 07 grosses-up to 7.5%. On a payout ratio of 66%, and dividend of 22.5 cents. Importantly, the anticipated well-covered by free cash flow, this dividend has free cash flow easily supports this dividend, and the room to grow, and that’s what analysts expect in payout ratio is undemanding. Rounding out the FY21, where the potential yield (at this share price) attractions of this stock, analysts are quite bullish on rises to 6.1% (grossed-up to 8.7%). its capital-gain prospects, too.

2. Helloworld Travel (HLO, $4.42) 3. A2B Australia (A2B, $1.57) Market capitalisation: $551 million Forecast FY20 dividend yield: 5%, fully franked Forecast FY20 dividend yield: 5.2%, fully franked Forecast FY20 grossed-up yield: 7.1% Forecast FY20 grossed-up yield: 7.4% Forecast dividend per share: 7.8 cents Forecast FY20 dividend per share: 23 cents Forecast free cash flow per share: 12.6 cents Forecast FY20 free cash flow per share: 32.4 (source: StockDoctor) cents (source: StockDoctor) Forecast dividend payout ratio: 63.9% Forecast FY20 dividend payout ratio: 63.9% Analysts’ consensus valuation: $1.655 (Thomson Analysts’ consensus valuation: $5.40 (Thomson Reuters), $1.65 (FN Arena) Reuters), $5.73 (FN Arena) As might be expected after Uber burst on to the Analysts reckon that integrated travel services Australian market – specifically to disrupt the taxi company Helloworld should be able to show industry – the former Cabcharge has had a torrid few double-digit growth in earnings per share (EPS) over years, going backwards for investors over the last the current financial year (FY20) and next, and also one, three and five years. That is only to be expected increase its dividends. That augurs well for yield from a company that lost a lucrative near-monopoly, hunters. but those travails are dissipating, and the name change to A2B Australia in November 2018 indicated What the “integrated” means with respect to a new confidence. Helloworld is that it is a travel retailer (it was formerly known as Harvey World Travel), a wholesaler of A2B is leveraging its 13cabs and Silver Service domestic/international/inbound-tour travel products brands (which boast 9,500 cabs) as highly popular and also provides corporate travel services. Each of apps, and has diversified its revenue streams through the company’s main measures are on the rise: total Cabcharge Payments and Mobile Technologies transaction volume (TTV), revenue, EBITDA International, bought in 2018, which is a (earnings before interest, tax, depreciation and software-as-a-service (SaaS) application that powers amortisation), net profit, and dividend. In FY219, TTV the processing and dispatch systems used by most of grew by 9.1%, to $6.5 billion; revenue rose 9.8%, to the taxi companies in Australia, as well as taxi fleets $357.6 million; EBITDA swelled 20.8%, to $77.3 in North America, Europe and New Zealand – the million; net profit surged 23.8%, to $38.2 million; and company believes it has strong prospects to grow this the fully franked dividend was lifted by (14%) to 20.5 business in other countries. A2B recently launched a cents, the fourth straight year of rising dividends. new cut-price taxi brand called CHAMP, and will shortly launch a new service called “MyDriver” And the portents for this year, so far, look good. In nationwide, after a successful trial in Newcastle, in September, Helloworld gave EBITDA guidance in the which 40% of passengers chose to select a preferred range $83 million–$87 million for FY20, up from the driver. $77.3 million reported for FY19. After a healthy September 2019 quarter, the company upgraded this The Cabcharge platform is now a technology to a range of $86 million–$90 million. powerhouse, and A2B is moving into machine learning and internet-of-things (IoT) applications to Analysts polled by Thomson Reuters expect EPS to optimise and grow the business. Analysts like the rise by 31% in the current financial year, to 36 cents, basis on which to grow profits and dividends. FY19 allowing a dividend lift to 23 cents. FN Arena’s saw a record result for revenue, up 7% to just under collation projects EPS rising to 35.4 cents, with a $200 million, and underlying net profit up 10%, to

Monday 02 December 2019 08 $14.9 million. The full-year dividend was maintained at 8 cents, and it is this dividend that most interests us – it will probably come under slight pressure in the current year, but A2B’s full franking, strong cash flow position, low payout ratio should give investors comfort that this is a sound yield stock – with analysts’ expectations showing a grossed-up yield of 8.1% for FY21, at the current share price.

Lastly, income-focused investors could do a lot worse than take a close look at some of the dividend-income-based exchange-traded-funds (ETFs), which are structured to offer participation in portfolios of shares that offer above-average dividend yields.

A good option here is the Vanguard Australian Shares High Yield ETF (VHY). At a share price of $61.54, and a trailing (FY19) dividend of 356.73 cents, VHY, if it repeated that dividend, would be offering a yield of 5.72%, which with its FY19 level of franking, at 85.7%, would represent a grossed-up yield of 7.8%. VHY could easily do better than this for FY20.

A similar situation is the Russell Investments High Dividend Australian Shares EFT (RDV), which at a share price of $30.60 and a trailing (FY19) dividend of 209.18 cents, which, if repeated in FY20, would generate a yield of 6.9%, 78.8% franked, equivalent to a grossed-up yield of 9.4%.

Monday 02 December 2019 09 Buy, Hold, Sell – What the Brokers Say by Rudi Filapek-Vandyck

Changes in recommendations for ASX-listed stocks In the good books by the seven stockbrokerages monitored daily continue to carry a slight bias towards downgrades. COLLINS FOODS LIMITED (CKF) was upgraded to For the week ending Friday 29 November 2019 Add from Hold by Morgans B/H/S: 1/1/0 FNArena registered 10 upgrades and 11 downgrades with Telstra the sole recipient of two upgrades, both The first half highlighted strong momentum in the to Buy. base KFC Australia business while Europe continues to underperform. The company has highlighted Only three out of the 10 upgrades stopped at same-store sales growth in the second half to date of Hold/Neutral, while four companies received a fresh 4.5% for KFC Australia. Store roll-out expectations Sell recommendation: AMP, IOOF Holdings, have been reiterated. Morgans expects FY20 Perpetual and Sigma Healthcare. operating earnings (EBITDA) of $122.3m, up 7.5%. The broker notes the stock trades at a discount to With the out-of-season corporate reports now winding listed peers and points to de-gearing of the balance down, and quarterly updates on commodities still sheet to the top of the target range with the potential ahead, it is no surprise overall activity in further for further accretive acquisitions. Rating is upgraded adjustments to earnings estimates remains rather to Add from Hold and the target raised to $11.76 from benign. Though it has to be pointed out that corporate $8.20. Australia is still issuing profit warnings. See downgrade below. For the week, Caltex Australia took the honours in positive amendments to earnings forecasts, at a distance followed by Mineral Resources, and further down Fisher & Paykel Healthcare (FY19 release), and IOOF Holdings. The negative side of the ledger, on the other hand, has plenty of action on display with Orocobre’s forecasts getting yet another chainsaw treatment, followed by equally significant reductions for Nearmap, Nufarm (yet another profit warning), EBOS GROUP LIMITED (EBO) was upgraded to Superloop, Sims Metal Management (was that Buy from Neutral by UBS B/H/S: 1/2/1 another profit warning?), and Westpac. UBS upgrades to Buy from Neutral as the stock now The greatest discrepancy for the Australian share offers a 16% total return based on the current target. market remains the fact that fresh money keeps The broker’s FY20 operating earnings (EBITDA) flowing in, pushing indices to new all-time highs, while forecast now sits at $294m. Given the strong capital momentum for earnings estimates remains (quite allocation record, UBS would expect the company to, noticeably) weighted to the downside. One cannot at a minimum, achieve its stated 15% return on help but wondering what the implications are for the capital target on future acquisitions. Assuming EBOS upcoming February reporting season. This, however, Group does deploy $300m of capital into acquisitions might remain a question for next year. by the end of FY20 it could add 14% to group

Monday 02 December 2019 10 earnings (EBIT). Target is reduced to NZ$25.50 from NZ$25.90.

TELSTRA CORPORATION LIMITED (TLS) was upgraded to Outperform from Neutral by Credit Suisse and to Outperform from Neutral by Macquarie B/H/S: 4/1/1 PERPETUAL LIMITED (PPT) was downgraded to The company’s investor briefing flagged declines in Underperform from Neutral by Macquarie B/H/S: the near term for mobile revenue per unit amid 0/6/1 competition in enterprise. However an improving trend has been noted. Credit Suisse suspects capital Perpetual reaffirmed business-as-usual cost and cost intensity is likely to improve while the dividend savings guidance at its AGM. Macquarie suggests the appears sustainable at $0.16 per share. While organic and inorganic pipeline for Perpetual Private is recognising the stock has had a good run over the encouraging. Perpetual Investments is still looking for past 12 months, as momentum is positive Credit an acquisition as outflows continue. Those outflows Suisse upgrades to Outperform from Neutral. Target are likely to sustain pressure on the stock’s relative is raised to $3.90 from $3.70. multiple to peers thus the broker downgrades to Underperform from Neutral, noting Perpetual has It appears the usual uptick in competitive behaviour joined in a recent re-rating for the sector. Target rises among mobile providers in the run-up to Christmas is to $35.50 from $32.00. absent this year. Macquarie hasn’t changed its Telstra forecast, but is more confident in its FY21 Earnings forecast mobile growth forecasts. Leading indicators suggests a competition inflection point in the next twelve Listed below are the companies that have had their months. Mobile improvement, as well as reduced forecast current year earnings raised or lowered by capital intensity, provide scope for dividend growth the brokers last week. The qualification is that the down the track, the broker suggests. Upgrade to stock must be covered by at least two brokers. The Outperform from Neutral, target rises to $4.00 from table shows the previous forecast on an earnings per $3.75. share basis, the new forecast, and the percentage change. In the not-so-good books

COLLINS FOODS LIMITED (CKF) was downgraded to Neutral from Buy by UBS B/H/S: 1/1/0

The first half result would have beat UBS estimates had the Netherlands not underperformed. Customer uptake at the new Taco Bell locations remains strong and the broker considers this a core driver for medium and long-term growth. Nevertheless, after a material re-rating the broker considers the valuation fair and downgrades to Neutral from Buy. Target is raised to $10.60 from $8.75. The above was compiled from reports on FNArena. See upgrade above. The FNArena database tabulates the views of seven major Australian and international stock brokers: Citi, Credit Suisse, Macquarie, Morgan Stanley, Morgans, Ord Minnett and UBS. Important: This content has

Monday 02 December 2019 11 been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.

Monday 02 December 2019 12 My “HOT” stock — I like Ooh Media (OML) by Maureen Jordan

Michael likes Ooh Media (OML). “Its share price is trending upward from a lower base after a reset of earnings expectations,” he says.

“Unfounded and denied speculation of a Management Buy Out continued the lift, but could Source: Google also highlight potential value in the stock. A PE of around 15 times compares well to longer-term growth Important: This content has been prepared without expectations around 9% pa,” he adds. taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.

Source: Google

DISLIKE

Michael doesn’t like Telstra (TLS). “The share price rallied around TLS’s investor day last week,” he says. “Management confirmed previous estimates and its broad strategy.

“A number of brokers upgraded their valuations, however this put many of them in the vicinity of $3.90, roughly where TLS finished the week. Implied in that confirmation is a lower dividend to come, and $4 was a bridge too far for TLS in its previous rally.

“In my view, a good opportunity for long-suffering shareholders to bail out,” he adds.

Monday 02 December 2019 13