18 Share Tips _ 17th June 2024 _ The Bull

18 Share Tips | 17th June 2024 | The Bull https://thebull.com.
au/18-share-tips/17-june-2024/
ANTHONY BLACK
16 Jun 2024
Damien Nguyen, Morgans
BUY RECOMMENDATIONS
BUY – GQG Partners Inc. (GQG)
An update in May showed strong net inflows and a solid market investment performance
across all of its core strategies. Total funds under management (FUM) stood at $US150.1
billion on May 31, 2024, up from $US142 billion on April 30, 2024. We believe GQG’s share
price is poised to rise from FUM momentum leading to an earnings tailwind.
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18 Share Tips | 17th June 2024 | The Bull https://thebull.com.au/18-share-tips/17-june-2024/
BUY – Generation Development Group (GDG)
GDG recently entered into a binding agreement to acquire the remaining 61.9 per cent of
Lonsec Holdings’ fully diluted capital for $197.4 million. Lonsec has performed well since
GDG’s initial investment in 2020. The acquisition enables GDG to further capitalise on growth
opportunities in managed accounts, a high growth market. GDG’s own product suite, which
includes investment bonds, has structural tailwinds. GDG is a leader in terms of market share
and inflows in recent years.
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HOLD RECOMMENDATIONS
HOLD – James Hardie Industries PLC (JHX)
Shares in this building products company were sold off aggressively on May 21 on the back of
a weaker outlook in fiscal year 2025. Investors reacted to concerns that cost-of-living
pressures are expected to negatively impact discretionary spending on renovations. However,
we expect consumer spending to recover in line with an anticipated cut in interest rates.
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HOLD – Lovisa Holdings (LOV)
Investors sold down the stock on news high profile company chief executive Victor Herrero
was departing the company in May 2025. We believe the shares in this fashion jewellery and
accessories retailer were oversold. A change in leadership doesn’t signal a switch in strategic
direction, or affect the company’s potential global opportunities.
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SELL RECOMMENDATIONS
SELL – IDP Education (IEL)
This international student placements company provided fiscal year 2024 earnings guidance
that was below consensus. The short-term outlook appears challenging due to regulatory
concerns and tougher market conditions. IEL estimates the international education market
will decline between 20 per cent and 25 per cent in fiscal year 2025. We believe the entire
sector faces challenges, and it may take considerable time before IEL returns to sustained
growth.
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SELL – Telstra Group (TLS)
The positive outlook for its mobile and enterprise divisions still fell short of expectations.
Retaining ownership of its fixed infrastructure business InfraCo rather than selling it
prevented unlocking value in the share price. Telstra was recently trading on a higher price/
earnings multiple than its 10-year average and when compared to international peers. The
shares have fallen from $4.30 on June 30, 2023, to trade at $3.54 on June 13, 2024.
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Dylan Evans, Catapult Wealth
BUY RECOMMENDATIONS
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IC Markets - experienced and highly regulated - Read our review
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BUY – Lynas Rare Earths (LYC)
LYC is the only major rare earths supplier outside of China. LYC has a high grade mine with at
least a 30-year life. Long term, we’re excited about the company’s potential. It’s making good
progress on its plans to double production of neodymium, a key ingredient for producing the
magnets used in electric motors and generators. Demand for neodymium is expected to grow
and support the price of rare earths.
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BUY – Sonic Healthcare (SHL)
Sonic is one of the largest providers of pathology and clinical laboratory services in the world.
The stock price has fallen significantly during the past 12 months, with the most recent drop a
response to an earnings downgrade. Despite the bad news, we see SHL as a buying
opportunity at its recent price. Company earnings fell post COVID-19, and it’s taken longer
than expected to reduce costs. But it can regain momentum.
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HOLD – Endeavour Group (EDV)
Endeavour has a market share of about 40 per cent in liquor retailing, via outlets including
Dan Murphy’s and BWS. It also operates hotels and gaming facilities. The ever-present risk is
a potential tightening of gaming regulations. But, in our view, such a risk is more than likely
offset by the company’s liquor retailing division continuing to win market share.
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HOLD – ANZ Group Holdings (ANZ)
The ANZ offers the best value of the major banks, in our view. The acquisition of Suncorp’s
banking division paints a brighter outlook, as it will add important retail exposure to the mix.
The group was recently trading at a price/earnings discount to peers, and on an attractive fully
franked dividend yield above 6 per cent.
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SELL – IDP Education (IEL)
IEL is an international education organisation offering student placements in Australia and

abroad. The shares have been drifting lower since August 2023, driven by investor fears of
lower international student numbers and English testing volumes. In a recent update, the
company expects the international education market to decline between 20 per cent and 25
per cent in the next 12 months. If this proves correct, profit in 2025 may fall below market
expectations.
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SELL – Santos (STO)
We prefer to have limited exposure to oil and gas given developed countries are beginning to
transition from fossil fuels to cleaner energy, albeit slowly. There’s little doubt LNG will
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continue to be an important energy solution for years to come. However, gas prices are closely
linked to oil markets, which were recently showing signs of oversupply as demand falls. OPEC
is reluctant to cut supplies to support prices as it doesn’t want to run the risk of losing market
share.
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Angus Geddes, Fat Prophets
BUY RECOMMENDATIONS
BUY – 29Metals (29M)
10 of 19 18/06/2024, 7:47 am
The company provides leverage to elevated copper prices. Copper has entered a new bull
market, a trend that could persist for years as demand is forecast to substantially outstrip
supply from the massive energy required to provide computing power for artificial
intelligence. The shares have risen from 18.5 cents on February 16 to trade at 47.7 cents on
June 13. We have a speculative buy on the stock.
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BUY – Gold Road Resources (GOR)
Gold price dips, such as the recent one, presents an opportunity to buy some gold mining
exposures, as we expect the bull market to continue in the longer term. Gold Road Resources
has quality assets and a solid balance sheet. The valuation is undemanding under our
assumptions of continuing elevated gold prices. The company has cash and listed investment
options. It offers growth potential, in our view.
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HOLD – HUB24 (HUB)
HUB operates an investment and superannuation platform. It has captured market share in
the huge and growing Australian superannuation market and this is likely to continue. The
platform is often rated among the best in the industry, leading to impressive inflows through
the cycle. Management is skilled at executing the company strategy.
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HOLD – Amcor Plc (AMC)
AMC has established itself as a giant in the packaging world via a mix of organic growth and
acquisitions. The packaging market remains fragmented, so there’s scope for more
consolidation. Customer preferences are changing, and Amcor’s scale assists innovation in
packaging. The company posted a stronger performance in its most recent quarter.
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SELL – The Reject Shop (TRS)
The discount retailer operates in a fiercely competitive market. Sales were up 4.2 per cent in
the first half of fiscal year 2024 compared to the prior corresponding period, but statutory net
profit after tax was down 11.1 per cent. Consumers are continuing to deal with an ongoing
cost-of-living squeeze. The shares have fallen from $5.40 on January 4 to trade at $3.12 on
June 13. Other stocks appeal more at this stage of the cycle.
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SELL – Temple & Webster Group (TPW)
TPW is an online furniture and homewares retailer. It’s a well-managed business. Solid
branding and positioning have delivered impressive returns for shareholders during the past
five years. We expect the company to continue performing well compared to competitors.
However, it was recently trading on triple-digit historical price/earnings ratio. The price/
earnings ratio is uncomfortably high given the broader backdrop, as we expect consumers to
continue tightening their belts. A stock to consider selling and possibly buying later at a
cheaper price for longer term growth prospects.
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18 Share Tips | 17th June 2024 | The Bull https://thebull.com.

Damien Nguyen, Morgans

BUY – GQG Partners Inc. (GQG)

BUY – Generation Development Group (GDG)

HOLD – James Hardie Industries PLC (JHX)

HOLD – Lovisa Holdings (LOV)

SELL – IDP Education (IEL)

SELL – Telstra Group (TLS)

Dylan Evans, Catapult Wealth

IG - Extensive product array and user-friendly platforms - Read our review

BUY – Lynas Rare Earths (LYC)

BUY – Sonic Healthcare (SHL)

HOLD – Endeavour Group (EDV)

HOLD – ANZ Group Holdings (ANZ)

SELL – IDP Education (IEL)

IEL is an international education organisation offering student placements in Australia and

SELL – Santos (STO)

Angus Geddes, Fat Prophets

BUY – 29Metals (29M)

BUY – Gold Road Resources (GOR)

HOLD – HUB24 (HUB)

HOLD – Amcor Plc (AMC)

SELL – The Reject Shop (TRS)

SELL – Temple & Webster Group (TPW)

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