Cochlear: A Little More Upside?

This story features COCHLEAR LIMITED. For more info SHARE ANALYSIS: COH

By Michael Gable 

Holding stocks leading into reporting season can sometimes feel like Russian Roulette as it is often impossible to know whether your stock will report well or not. But we can move the probabilities a little more into our favour by sticking to the sectors that should do well and avoiding the tough ones. Yesterday saw a clear example as Aurizon dropped over 11% (exposure to resources) and Amcor was up nearly 10% (exposure to $US earnings). None of our clients hold Aurizon, some of them hold Amcor, but we can see the lesson there of being in the right areas should result in less exposure to potential disappointments. As we've been saying for a few weeks, companies whose reports beat expectations should outperform for the at least the next few months.

One such stock that reported well was Cochlear ((COH)).
 

Our last charting commentary on COH was on 17 November when it was at $86.93. We mentioned "a possible break to the upside could see COH resume the uptrend and attempt one final move towards $100 to complete the uptrend that commenced early last year." Now that COH has hit our target, we move to a neutral stance on the stock. Their first half result suggests that the stock is not expensive now but around fair value. Because of the their better numbers, it now looks like the stock can head even higher than first thought to just over $110 before profit taking comes in.

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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