Australia | May 30 2006
By Rudi Filapek-Vandyck
The FN Arena Bear/Bull Indicator remains under 50% for the second consecutive day as recommendation upgrades continue to significantly outnumber downgrades.
The first two days of the week saw the total amount of upgrades run up to 22 while only four recommendation downgrades were issued. Is there any explanation other than that the recent correction has, in the view of the leading equity experts in the country, brought back value opportunities?
Hills Industries (HIL) is the only stock that received both an upgrade and a downgrade. Three others were not so lucky: Mortgage Choice (MOC), Tabcorp (TAH) and IOOF (IFL) saw one broker issuing a downgrade over the past 24 hours. In all cases it was a matter of "valuation".
Are there any conclusions to be drawn from the 22 recommendation upgrades?
Resources are still receiving many of the upgrades, with BHP Billiton (BHP), Rio Tinto (RIO), Minara Resources (MRE), Newcrest Mining (NCM), Oxiana Resources (OXR) and Zinifex (ZFX) receiving one upgrade each.
Healthcare stocks are on the receiving end as well with one upgrade each for Cochlear (COH), DCA Group (DVC), Peptech (PTD), Sonic Healthcare (SHL) and Sigma Pharmaceuticals (SIG).
Other stocks that received a recommendation upgrade were James Hardie (JHX), now back at the top of our list of highest recommended stocks in Australia alongside Alumina (AWC) and BHP Billiton, McPherson’s (MCP), Tutt Bryan (TBG), AMP (AMP), Colorado (CDO), GUD Holdings (GUD), Jubilee Mines (JBM), Macquarie Goodman (MGQ), National Australia Bank (NAB) and PaperlinX (PPX).
The total number of recommendation upgrades over the past five trading days has now climbed to 40. There were only 14 recommendation downgrades over the period.