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Strong Buy Recommendations for ANZ Stockbroking Clients

Strategic Insights

— 1 min read

Investors seeking opportunities in the Australian stock market have been advised to consider three prominent companies by ANZ Stockbroking. Woodside Petroleum, Pacific Dunlop, and Star City have been identified as strong buy prospects due to their solid positioning in their respective industries. While challenges in the oil and gas sector may pose a threat to short-term performance, ANZ Stockbroking remains optimistic about the long-term prospects of these companies.

Key Takeaways:

  • Woodside Petroleum has successfully hedged 50% of its oil price exposure at $US19.56 a barrel for 1998 and a further 26% at similar price levels for 1999, making it a standout performer in the oil and gas sector.
  • Pacific Dunlop's sale of GNB Technologies for $900 million has progressed the company's restructure and is expected to unlock shareholder value. The sale of GNB's proceeds will also fund the expansion of Ansell, the company's primary driver of long-term earnings growth.
  • Star City's strong cash flow generation and undergeared position subsequent to an option exercise make it an attractive investment opportunity, with analysts expecting the company to continue producing substantial free cash flow.
  • Pacific Dunlop's Ansell division is expected to achieve 16% annual growth over the next five years, driven by expansion initiatives.
  • Woodside Petroleum's hedging strategy has reduced its exposure to potential oil price fluctuations, positioning the company for long-term success.

Statistics:

  • Woodside Petroleum has hedged 50% of its oil price exposure at $US19.56 a barrel for 1998 and a further 26% at similar price levels for 1999.
  • Pacific Dunlop sold GNB Technologies for $900 million, with proceeds to be used for Ansell expansion.
  • Star City is expected to generate substantial free cash flow, with an undergeared position subsequent to an option exercise.
  • Ansell, Pacific Dunlop's primary driver of long-term earnings growth, is expected to achieve 16% annual growth over the next five years.

Sources:

  • ANZ Stockbroking report, no specific date provided.
  • Woodside Petroleum, no specific publication date provided.
  • Pacific Dunlop, no specific publication date provided.
  • Star City, no specific publication date provided.

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