Rudi's View | 3:51 PM
Freshly updated stock picked sector favourites, Best Buys and Conviction Calls in Australia.
By Rudi Filapek-Vandyck, Editor
Lower commodity prices and downward pressure on share prices of related producers are simply par for the course, according to the latest sector update by analysts at Morgan Stanley.
They blame profit-taking after what has largely been an 18-month-long uptrend, much to the delight of those on the shareholder register.
As has been the case after every pullback throughout that period, lower prices may offer the next opportunity, though maybe not for all commodities and producers.
Morgan Stanley's preference is for commodities with unequivocally strong demand fundamentals, such as copper and uranium.
On Thursday morning, the latest sector update included downgrades for Rio Tinto ((RIO)) and Deterra Royalties ((DRR)) to Underweight.
Highlighted Overweight-rated companies include uranium exposures Paladin Energy ((PDN)) and Boss Energy ((BOE)), as well as BHP Group ((BHP)) and Iluka Resources ((ILU)).
Not highlighted, but also Overweight-rated, are Whitehaven Coal ((WHC)) and South32 ((S32)).
Peers at UBS expect iron ore prices to remain less volatile ahead, but to step down by -US$10-15/t over the next two years as Simandou ramps up and the market is projected to move into a larger surplus.
The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE
If you already had your free trial, why not join as a paying subscriber? CLICK HERE