With many economic clouds still looming over Australia, it is still critical to buy the right stocks.
So it may help to see what the professionals have recently bought and why.
Shaw and Partners portfolio manager James Gerrish, in a Market Matters Q&A, this week let slip two stocks that his team has picked up recently:
Image source: Getty Images
'Undervalued' while the business is doing fine
The market has been unkind to media conglomerate Nine Entertainment Co Holdings Ltd (ASX: NEC) this year.
The share price has tumbled 30% since its April high, even though the business is not doing too badly.
Gerrish's team bought Nine shares last month for its emerging companies portfolio.
"Market Matters likes Nine Entertainment here," he said.
"In our view, the market is too bearish on its broadcasting division — plus we also see further upside in their Stan investment with rising average revenue per user (ARPU), as well as strong momentum in sales."
There is a possibility that its streaming service Stan could be offloaded.
"Nine have also flagged the potential to divest some of its interest here which could further unlock value for shareholders."
With this year's plunge in stock price, Gerrish reckons it's a value buy at the moment.
"At just 11x expected FY23 PE, Nine is undervalued and recent numbers suggest the underlying business is holding up better than expected."
Other professionals largely agree. According to CMC Markets, nine out of 11 analysts that cover Nine recommend it as a buy. Eight of them even say it's a strong buy.
Two gold shares, we bought one
The gold price has been rising, so Gerrish was asked whether he favours Evolution Mining Ltd (ASX: EVN) or Regis Resources Limited (ASX: RRL) for buying now.
It was then he revealed his team had purchased one of them just recently.
"We like both gold stocks, although we now hold Evolution in our flagship growth portfolio after purchasing it on Thursday," he said.
"With the main difference between the two being their theoretical risk profile, or beta."
Gerrish explained that there is not much between the two ASX shares.
"Following gold's bullish move after Jerome Powell's relatively dovish comments last week, both stocks immediately rallied strongly with Evolution +6.3% and Regis +3.6%," he said.
"Through November they surged higher almost in tandem i.e. Regis +27% and Evolution +29%."
The Evolution Mining share price is down 31% year to date, even after a stunning 55% climb since mid-October.
