Stock Tips: Never mind the alpha, what's the Sigma play this week?
Sean Conlan – Leyland Private Asset Management
BUY
Sigma Healthcare (ASX:SIG)
We believe SIG will grow into its current PE multiple by refurbishing existing Chemist Warehouse stores, opening 20 new stores per annum across Australia and by exporting the brand offshore.
Judo Capital Holdings (ASX:JDO)
Improved funding costs give us more comfort on the near-term margin outlook. With forecast a~34% earnings CAGR over the next three years, and trading at only 12x FY26 P/E we think the valuation is attractive.
HOLD
Treasury Wine Estates (ASX:TWE)
TWE has trimmed guidance for FY25 earnings growth, citing lower-than-expected wine sales in the US where economic uncertainty is hurting consumer demand.
Austal (ASX:ASB) We remain positive on the long-term outlook for ASB, considering the macro tailwinds and attractive growth profile, however, we are conscious of its current valuation.
SELL
Bank of Queensland (ASX:BOQ)
While BOQ's simplification strategy and pivot towards business is bearing fruit, we think it will continue to struggle to make returns above the cost of capital over the medium term.
Lovisa Holdings (ASX:LOV)
We are concerned about the quality of stores recently opened and think that higher-than-normal rates of discounting may be driving strong LFL sales.
Chris Watt – Bell Potter Securities
BUY
CAR Group (CAR)
Resilient RV sales, solid international operations and strong earnings momentum support continued growth. The company continues to benefit from a scalable global expansion strategy that allows it to replicate its model across international markets.
Treasury Wine Estates (ASX:TWE)
While the US premium wine market is weak, core luxury brands remain strong. DAOU Vineyards synergies and broader international opportunities provide upside despite recent downgrades.
HOLD
Technology One (ASX:TNE)
A strong first-half result confirms the business is executing well, with growing recurring revenue and cash flow. However, recent share price gains limit short-term upside.
James Hardie (ASX:JHX)
Strategy execution in US new construction is on track, particularly in the southern states. That said, macro softness and affordability challenges persist.
SELL
IDP Education (ASX:IEL)
Deteriorating student volumes and shifting global immigration policy have led to significant earnings downgrades. Visibility remains poor, and risks are elevated.
Cettire (ASX:CTT)
Weak margins, US tariff headwinds, and a soft cash position point to a challenging outlook. The path to profitability appears longer and riskier.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead does not provide, endorse or otherwise assume responsibility for any financial advice contained in this article.
Originally published as Stock Tips: Never mind the alpha, what's the Sigma play this week?
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