Morningstar analysts are bullish on current share market opportunities, stamping 150 stocks with buy or accumulate recommendations compared to 85 a year ago.
“In market downturns it’s only natural that you have more positive recommendations,” analyst Peter Warnes told the Morningstar Investment Conference in Sydney earlier this month.
A group of analysts revealed value in industrial, retail and resource stocks.
“In the defensive area, there is long-term value in Fosters. There is also value in Alesco, Boral, CSR, Crane and GWA,” Warnes said.
Retail had been completely out of focus with the market and there was still value in David Jones, Harvey Norman, Just, Metcash, The Reject Shop, Woolworths and quasi-retailer Wesfarmers, he said.
Analyst Mark Taylor sees opportunity in blue chips to micro-caps in the resources sector.
“Base metals and precious metals have had pullback. Iron ore has seen its price rise by 75 per cent in the last year, the coal price has doubled and coke has tripled.
“There are opportunities across the board: BHP, Rio, Alumina, Woodside, Australian Worldwide Exploration, Roc Oil, Arc Energy and Sally Malay, Kingsgate Gold and Mosaic Oil.
“If BHP is successful in its bid for Rio, it will combine two of the world’s premier mining portfolios to cherry-pick to give a super portfolio. If the bid fails, the market will reward BHP’s share price for its discipline not being willing to pay huge prices for shares.” Taylor said.
