Australian Stock Report - Share Tips

Shares to buy: Boral Limited (BLD)

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Publish date: Tue, 14 Feb 2017, 05:01 PM
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Our stock analysis blog provides information on stocks to watch and helps you figure out which are the best stock to buy. We use fundamental and technical analysis to identify the stocks tips that will supercharge your portfolio. We don't believe in choosing stock tips on rumours or hearsay. Our share tips use fundamental analysis, like price-to-equity ratios, cash flow analysis and net tangible assets, to identify the best share trading opportunities. We then use technical analysis, which is the study of price charts, to determine the best level to buy shares. We believe using the two school of investment analysis allows us the increase the chances of our share tips being successful.

BLD is trading at a steep 25% discount to the All Industrials ex-financials on FY18 price/earnings estimates, which is significantly below the historical trading range.

This is largely attributable to the proposed acquisition of Headwaters, reflecting the size of the transaction and concerns around coal-linked fly ash and regulatory approvals.

In our opinion, investor concerns are overstated.

The catalysts that could drive a re-rating include regulatory approvals, delivery on FY17 expectations and evidence of synergy execution.

On the technical front, since November last year an uptrend has developed, characterised by a series of higher highs and higher lows.

We like the recent compression in the shorter-term EMAs (red) and bounce from the longer-term EMAs (green). This suggests those active in the stock are willing to bid up dips and that longer-term momentum is becoming more bullish.

We are targeting a move to $6.50.

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