In this section we provide readers with three stocks that have attracted the interest of the broking community or the ‘herd’. Broker recommendations tend to be biased and highly optimistic. We try and breakdown these barriers and give our own honest opinion. It is important to keep in mind that technical analysis is only one part of the investment process and any recommendations do not give consideration to the underlying fundamentals of each business.  Macquarie (MQG) – Current Price – $97.16 – Has divested its 11.3% stake in Macquarie Atlas Roads (MQA). MQG sold 76 million securities in MQA at a price of $6.00 per security to a wide range of institutional investors via a bookbuild. That has netted the company $440 million. It still remains Australia’s largest global asset manager and investment bank. Broker View:  UBS (BUY $105.00) – The broker has released a bullish report on the investment bank. It says most Australian bank shares have underperformed when compared to their Asian counterparts. UBS expects a steady decline in mortgage funding over the next three years and have reduced their forecasts on the bank and the sector. It is tipping flat growth but out of the banks, Macquarie is the preferred followed by Westpac, CommBank, ANZ and NAB last. Unconventional View: We are more bullish than UBS. Whilst a cooling in the housing market is expected to cause a decline in mortgage funding, Macquarie’s asset management arm will more than offset any downturn in the other area of its business. The company has a robust balance sheet and is a stock that’s leveraged to stock market conditions. The company recently posted a 1H profit up 18% to $1.2bn and it upgraded its earnings guidance to be ‘slightly’ up on FY17. MQG has a tendency to issue conservative guidance which it usually beats. Slightly up can mean anything from up to 10%. That means the market is expecting $2.4bn in NPAT for fiscal 2018. With record fees of around $629m booked in the 1H, we think MQG will weather a softening in the housing market. MQG generates considerable income from global markets. According to Morningstar a whopping 62% of Macquarie’s total income comes from global markets. That is – 28% from Europe, 24% from Americas, 10% from Asia and 38% from Australia. It is a well- diversified business model that continues to perform. A 10% move in the Australian dollar has a 6% movement in NPAT. On the StockOmeter, the stock comes up really well. It scores 76 which is a screaming Buy. ROE is rising, PE is relatively cheap and EPS is growing. Yield is also very high. If you look at the chart below, you can see how correlated the stock is to the market. All in all, we think MQG has further upside to run. The stock is in a solid uptrend formation, albeit looking a little pricey. You may want to wait for a dip back a touch below $95. Otherwise it’s a Buy. Caltex (CTX) – Current Price – $35.58 – Is a transport fuel supplier, convenience retailer and an integrated oil refining and marketing…

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