From thebull.com.au, last few paras of the article. Another...

From thebull.com.au, last few paras of the article.

Another opinion pointing to CSG (incl Arrow) as a good long term buy.

Link is here http://thebull.com.au/articles_detail.php?id=3228

You may need to go full width to copy/paste the link


"Lachlan McLean, investment adviser in the private wealth management arm of Wilson HTM, says investors are keen to return to the stockmarket “to pick up bargains”. But rather than look to use the market downturn to pick up bargains, he says it is also a good time to “think about the portfolio that you want to hold over the next five to ten years.”

Prior to the 2007–2009 market slump, says McLean, Australian retail investors commonly held big chunks of the four major banks. “In many cases they’d owned those stocks for up to 20 years, and the bank holdings had grown to make up the lion’s share of the portfolio. If you were constructing a portfolio now, that overweight wouldn’t be appropriate.”

McLean argues that a portfolio being put together now should reflect “where the growth is going to come from” over the next five to ten years. “We’ve been putting clients into some of the beaten-up industrials, for example Orica, Woolworths, Toll and CSL. We’re not against banks, but we would prefer to hold Westpac and Commonwealth at the moment – you don’t have to hold them all. We’re saying to clients that if there is to be an overweight, it should be in a sector where the growth opportunities over the next five to ten years are the strongest. We think that sector is energy.”

The main exposures McLean is using are the higher-quality energy stocks, with the strongest balance sheets, which means Origin Energy, Santos, Woodside Petroleum and BHP. “Woodside and BHP are a bit pricey at the moment, but on a five to ten-year view, that shouldn’t be a concern. We’re also very keen on the outlook for uranium, because China is signaling a greater reliance on nuclear power, so we like Energy Resources of Australia (ERA) as well.”

In that group of stocks, says McLean, an investor has the “core exposure” to the major growth area that can be expected on the Australian stockmarket. With that core in place in the majors, he says investors can look to pick up some of the small-cap energy stocks that should show good growth over the next decade. In that category, he nominates coal pair Whitehaven Coal (ASX code: WHC) and Felix Resources (FLX), and emerging coal-seam gas players Arrow Energy (AOE), Molopo Australia (MPO) and Bow Energy (BOW).

McLean would also back the resources exposure with mining services providers, such as engineers Ausenco (AAX) and Sedgman (SDM) and Runge (RUL), a specialist provider of IT services to mining companies. “You’re still weighting the portfolio toward that major theme, but you’re spreading the exposure a bit,” he says."