Nickel miner, fintechs lead broker’s 2022 tips

Stockbroking house Morgans has released its ‘best ideas’ research note for September. The paper outlays some of Morgan’s best ideas that offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence.

Here are six of the firm’s best picks:

1. Universal Store (ASX:UNI) – UNI’s main activity is the selling casual youth fashion, with stores in most major malls. Morgans says the retailer’s recent result met expectations, with a strong recovery expected once lockdown restrictions ease. The retailer has a history of achieving 12%-plus like-for-like sales growth, which makes for a strong growth story. Target price of $8.72.
2. Beacon Lighting (ASX:BLX) – Morgans says there’s a “huge opportunity in a trade business” that has the “potential to grow at a compound annual rate of nearly 30% over the next three to five years.” There are also macro-economic factors that are all coming together in Australia, that should support customer demand for BLX’s products i.e., buoyant housing market and booming construction industry. ADD recommendation with a target price of $2.30 up from $2.01.
3. HUB24 (ASX:HUB) – HUB’s result was in line with expectations despite the platform’s revenue margin contracting more than expected, due to low interest rates. The wealth platform said FY22 has commenced strongly, with implied net inflows of about $1.6 billion so far in the financial year. Net inflow momentum supports HUB’s FY23 funds under administration (FUA) target of $63 billion-70bn (+60% over two-years from $41.4bn). Add recommendation with a target price of $31.65. Current price $27.90.
4. MoneyMe (ASX:MME) – Morgans says it was a solid year for digital consumer credit company MME, with a gross loan book at year end of $333 million, up 149 per cent, and $384 million in originations, up 115 per cent. The broker speaks about MME in quite a positive tone saying “MME continues to deliver strong book growth and we believe its new innovative product suite, targeting niche under-serviced markets, has the potential to drive further top-line growth.” Add recommendation with a target price of $2.28. Current price of $2.02.
5. PTB Group (ASX:PTB) – The specialist  aircraft turbine engine service company had a solid reporting season, reporting a profit result in line with expectations, but didn’t provide guidance. Morgans says the company will look to manage another 18 engines, which are to be flown by Trans Maldivian Airways. The broker has confidence in a strong recovery in earnings for the Australian-based business. Add recommendation with a target price of $1.18. Current price is 82.5c.
6. Panoramic Resources (ASX:PAN) – Morgans is positive on the nickel miner, saying, “a resumption of ore processing anticipated in November and first nickel sales forecast for December, PAN is on the cusp of production in a buoyant nickel market.” The broker has also made a few changes to the production assumptions on its near-term financial forecasts. That means PAN is now expected to move to profitability in the current FY. Morgans has kept its Add recommendation with a target price of 24c. Current price of 20.5c.

Ishan Dan

Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.