Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hey James and Team. Thanks for a wonderful service. Both these stocks sold off after recent reports I assess both as quality business's. Do you share this view . Are they a buy at these levels General advice only Thanks
Hi David,
A very topical question after MM Bought CTD for our Active Growth Portfolio on Wednesday believing like yourself that its a solid company whose recent sell-off is delivering an good opportunity:
CTD $16.57 – The companies recent result was undoubtedly weak, with underlying earnings (EBITDA) of $100.7m a ~10% miss to consensus while the guidance for FY24 was also lowered. The stock deserved to be treated harshly but we believe a ~20% move is overdone providing an excellent risk/reward entry level. We switched our position in Lendlease (LLC) believing the travel business has far better prospects through 2024 – year to-date CTD is -15% and LLC -17%.
DTL $8.64 – this value-added reseller of software and infrastructure products to government and enterprise customers in Australia was dealt with harshly last month after delivering a reasonable operational result, but missing consensus EBIT by -6% bringing into play valuation concerns. We believe DTL’s growth trajectory is intact with company’s increased tender activity supporting this view. We expect DTL to remain supported by its exposure to software and major vendors like Microsoft but the key over the next 6-months will be the markets appetite for high valuation stocks.
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