Stock Tips (CAJ, PDN & LLC)

Stock tips are collated every month from different analysts around Australia. This week we have two ASX specialist research companies and a technical analyst.

Feel free to ask a question in the comments below.

Australian Stock Report

Online Research

Chris Conway

Head of Research and Trading

Stock Tip: Capitol Health (CAJ)

Capitol Health is a stock we have traded with success in the past and it is presently providing us with another opportunity to be buyers.

At the recent AGM, Capital reported record interim and full year numbers, with a total dividend uplift of 64% on FY 2013.

Revenue increased 45% from FY13 to FY 14, whilst NPAT jumped 99% over the same period.

These are impressive numbers and numbers which have been well received by the market.

Looking ahead, we believe CAJ's strong financial performance will continue to provide the necessary support for the growth of the company's highly scalable business model.

A supportive regulatory environment and the attractiveness for multiple stakeholders - patients, radiologists and referrers - should also see CAJ continue to grow strongly.

On the technical front, since bottoming out around 54 cents in early October, the stock has since rallied to presently be trading towards 70 cents.

We have a solid bullish structure in place, with the shorter-term EMAs crossed higher and price action above the longer-term EMA filter, which is positive.

Whilst still at the speculative end of the opportunity spectrum, we believe the fundamental and technical stars are aligning for CAJ and are targeting a move from current levels into $0.80.

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Technical Analysis Research

Richard Lie

Technical Analyst

Stock Tip: Paladin Energy Ltd (PDN)

Japan's Fukushima nuclear disaster almost killed Paladin Energy, Australia’s biggest dedicated uranium miner.

The meltdown started a waterfall decline in both the price of uranium and Paladin’s stock price, which has lasted almost seven years.

In 2007, Paladin traded at $11.00, today it trades at just 40 cents. A “dog”, if there ever was one. That said, every dog has his day, and recent price action has been more encouraging.

Also, we just got news that Japan will restart its nuclear programme, an important source of demand. Now price needs to confirm the good news by carving out a new uptrend. 

I have identified the levels to watch below. 

1.     The momentum of the fall has waned in recent months. Price has twice found support at 30 cents, which has become a potential double bottom and trend reversal zone.  

2.      Volume has been constructive - there has been stronger demand on the up weeks than the down weeks, which shows that the bigger players are starting to pile in. 

3.     There is overhead resistance at 45 cents, 65 cents and $1.20, so plenty of work still to do. None of these levels have yet been breached, which is negative.

4.     The 45 cent level is critical on a weekly closing basis, as it would create a new trend of higher highs and lows. We’re close right now, but still no cigar.

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Online Research

Simon Herrmann

Private Client Advisor

Stock Tip: Lend Lease Group (LLC)

Buy Limit: $15.90     Stop Loss: $14.00     Target: $18.00

Lend Lease Group(LLC) is an international property and infrastructure group with operations in Australia, Asia, the Americas, Europe and the Middle East.

LLC’s core lines of business are development, construction, investment management, services and ownership of property and infrastructure assets.

LLC is focused on the creation of a global property group by managing a portfolio of four businesses diversified by geography, sector and risk profile. The strategy is aimed at securing multiple earnings streams from the five businesses by focusing on high quality retail assets and master planned urban communities, leveraging project management and construction skills and using asset creation and capital transaction capabilities.

CEO Steve McCann continues to grow the business through acquisitions and new development projects, taking advantage of opportunities in recovering markets as they improve over the medium- term. 

Short Term Case:

LLC has presented a buying opportunity with the stock price consolidating recently within it’s long term ascension causing the RSI to drop from 78 to 60 in the last few sessions.

The (5/25) DSMA has remained bullish for all but three months in the previous 12 and is widening providing fantastic acceleration of growth.

With the (21)Momentum Indicator increasing to the well-known 110 level by LLC we believe there is further opportunity to generate significant profits in a well-established secure company. 

Read the full Wise-Owl report on Lend Lease Group (LLC).

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