Rudi’s View: Lynas, Noni B And Citadel Group

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Sep 13 2018

In this week's Weekly Insights (this is Part Two):

-Momentum Change: Don't Panic
-August Reporting Season: The Final Snippets
-Conviction Calls
-Rudi On TV
-Rudi On Tour

[Non-highlighted parts appeared in Part One on Wednesday]

Conviction Calls

By Rudi Filapek-Vandyck, Editor FNArena

It'll happen, says mining analyst Christopher Ecclestone at London-UK based Hallgarten & Company; rare earths will have their second coming. Investors preparing for the next specialty elements boom just have to be a little more patient.

In Australia, UBS retains a positive view on come-back kid Lynas Corp ((LYC)) which shouldn't surprise given the broker's price target is no less than 78% higher than where the shares are trading at.

Earlier this year, it seemed Lynas was making a successful come-back from the darkest corners of the local share market, where one also finds Millennium Services ((MIL)) and Sundance Energy ((SEA)) to name but two, but that successful come-back has since turned into yet another nightmare for investors who stayed the course with the share price down around $1.80 from $3 in May.

At least the shares are still a long way away from the 38c they were trading at in the darker days.

Analyst Dylan Kelly at CLSA cannot believe it has once again come to this. On his calculation, the Mt Weld operation as a stand-alone business would fetch a valuation of $3 in the current context. He thinks investors are running scared because of potential for renewed political obstruction from the freshly elected Malaysian government (previously in opposition).

No double guessing as to why CLSA carries Lynas as a Conviction Buy, sorry, make that a High Conviction Buy, reiterated on Friday with a price target of $4.10.



Those who cannot believe why investors keep buying shares in CSL ((CSL)), and on my observation there is quite the number of naysayers out there, will be rubbing their eyes to read that sector analysts at Macquarie still have CSL as their most preferred healthcare exposure in Australia.

Say what?

Yes. Macquarie argues on the basis of the company's market position in plasma collection combined with an attractive earnings growth profile supported by solid fundamentals that CSL still is a solid buy at current share price level. The broker this week upped its price target to $230 from $223.50 after yet again digging deeper into Australia's foremost biotech success story if only to conclude the balance of risks remains to the upside.

The second most preferred healthcare stock is Ramsay Health Care ((RHC)), which is directly related to current market scepticism but Macquarie has been, and still remains, confident this quality ship will turn around assisted by brownfield development and incremental procurement savings.

Least preferred exposures are Cochlear ((COH)) and Primary Healthcare ((PRY)). The latter continues to perform weakly and exude ongoing uncertainty while the former constantly defies valuation limits amid challenges presenting themselves in developed markets.

Probably good to add here that healthcare analysts at UBS have also been lifting their price target for CSL recently and their latest adjustment has pushed the target to $232.

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