Whereto For Worley?

This story features SANTOS LIMITED, and other companies. For more info SHARE ANALYSIS: STO

By Michael Gable 

A deal to lift sanctions with Iran is currently putting downwards pressure on oil. This is because here is a fear that a rush of new oil could trigger a fall in prices. Not all oil stocks will be affected. For example, our preferred energy stock, Santos ((STO)), will continue to do well. Another stock that we like, Caltex ((CTX)), can also potentially benefit because of how their business model has changed. Also in the news this week is Saputo sweetening its bid for Warnambool Ceese & Butter ((WCB)) by another 20c. As we noted in last week’s report, Saputo has much more capacity than 20c, so in our opinion it is a foregone conclusion. This week’s report we have identified a few popular, but overpriced stocks as well as a few others that look quite good at these levels.

A month ago, we shared with you our model portfolio – the ‘FE200’ – a portfolio that was designed to beat the market. This week we share with you what we are currently holding, and analyse what is working and what isn't. That way you can hopefully gain some insights that will help you with your own investing. It has been a great month for the portfolio – generating returns 2.5% in excess of the ASX 200! This is a result of investing in good quality companies with earnings prospects greater than many other stocks.
 

WorleyParsons ((WOR))

 

You will notice that WOR has been down trending since early 2011. A large sell-off that occurs when a stock has already been trending down is potentially a sign that the sellers have been exhausted. It certainly looks slightly oversold on this weekly chart. Chances are that WOR will bounce back a little more before tracking sideways for at least a few months. From there, we would like to see it eventually get through resistance at $22 which would indicate possible end to the downtrend.
 

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.

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