By John Collett
Some of Australia’s best-known listed companies have share prices that are languishing – often for reasons not of their own making – with market analysts eyeing off a range of stocks trading at less than fair value for whom, they say, the worst may be past.
Hugh Dive, the chief investment officer at Atlas Funds Management, says Sonic Healthcare, one of the worst-performing shares over the past 12 months, could rebound by the second half of next year.
BHP’s share price is trading lower, but there are reasons for thinking that that could change.Credit: Krystle Wright
Its profits are expected to increase through acquisitions in the United States, Switzerland and Germany, and by organic growth, Dive says. Sonic will benefit from ageing populations, and as doctors schedule more tests to avoid malpractice suits, particularly in the United States, where the company is the third-largest pathology company.
Out-of-favour property developer and asset manager Lendlease says it will exit its loss-making international property construction business and conduct a $500 million buy-back. Dive says the measures should see a rebound in Lendlease’s share price.
Atlas Arteria’s shares were sold off on fears that toll roads in France would be nationalised. The company, formerly known as Macquarie Atlas Roads, owns and operates toll roads in France, Germany and the United States. The threat of nationalisation has receded with Marine Le Pen’s party not doing as well in the recent French parliamentary elections as expected.
Michael Gable, the founder of Fairmont Equities, says Santos′ share price has whipsawed over the past year and is trading for less than fair value. Its price should appreciate when the oil price starts increasing after years of underinvestment in the sector.
Gable also likes Charter Hall Long WALE REIT on expectations interest rates will most likely head lower in 2025. He says the company, with its diversified property portfolio, low vacancies and long leases, should do well.
The copper price is moving higher because of tight supply and high demand, and it is only a matter of time until the iron ore price gets moving on the back of an improving Chinese economy, Gable says. That could see a lift in BHP’s share price, which has major exposures to iron ore and copper.
Henry Jennings, senior market analyst at Marcus Today, says private healthcare operator Ramsay Health Care is facing higher costs in its United Kingdom and French operations. “With a new Labour government in the United Kingdom and its focus on improving the National Health Service and potential change to the health system in France also, we could see a recovery in the share price,” Jennings says.
The housing recovery in the United States and any cuts to interest rates there would help to improve the share price of building products maker James Hardie, Jennings says. “It’s a company with good management and good products, whose shares are trading at an attractive valuation,” he says. Along with Atlas Funds Management’s Hugh Dive, Jennings also likes Lendlease.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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