Your Money

Shortlisted – Dick Smith, Telstra

by Penny Pryor

It’s still a pretty choppy market but there are always opportunities. Something on Peter’s watch list is Dick Smith (DSH), after it reported a lift in sales for the March quarter. Peter had dinner with chief executive officer Nick Abboud a few weeks ago and was impressed with his plans for the company.

CIMB Securities also likes Dick Smith and thinks there’s a buying opportunity to be found. It has a price target of $2.70 on the $2.24 stock.

CIMB likes the number of initiatives the company has rolled out for FY15 in order to grow sales. The broker thinks there’s potential for the payout ratio to increase to 70% from 60% or the company to assess acquisitions. It has an Add rating on the stock and Macquarie has an Outperform rating.

Paul Rickard has Toll Holdings (TOL) and Telstra (TLS) on his buying list. 

 

“Telstra performed well last week and seems to have found strong support around $5.00,” Paul says.

Toll Holdings is currently out of favour with the market and Paul is not expecting any rapid recovery in price, but he is not sorry he bought it at $5.17 at the beginning of the month. It is currently trading around $5.25 with a target price on FN Arena of $5.43.

Brokers are neutral to underweight on Toll with five neutral/hold ratings, one outperform and two underweight/underperform ratings, according to FN Arena. 

 

Yellow Brick Road’s Mark Bouris was on Switzer TV last week and while he revealed The Apprentice would be back on our screens this year, he also said he wasn’t too worried about a housing bubble right now as long as certain pockets, particularly in Sydney, didn’t get too carried away.

His most sage piece of advice was this: “The yarn is don’t pay too much money for something.”

But he also said we should expect a tough budget, even if we don’t want one, and for interest rates to be on hold.

“I don’t want another cut. I don’t think we need another cut,” he said.

“I don’t expect we need a series of rate rises.”

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 regards to your circumstances.

This article originally appeared in the Switzer Super Report. Click here for your free trial.

Published on: Thursday, April 24, 2014