Morning Report Tuesday 16 February 2016
Looking at Market Matters stocks that are struggling
Good morning everyone Overview As Market Matters continues to strive to improve both its offering from both a quality and service front one thing we refuse to do is boast about our winners, especially in this market! The current Australian market feels like a minefield at present; when stocks issue their profit reports, huge 10% swings are almost the normal - yesterday Amcor (AMC) +9.6% but Aurizon Holdings (AZJ) -17%. It would be far nicer and easier to look at Market Matters’ stocks that are performing but when investing it's how you look after your losers that determines the results in the long run. Turning to the Markets Market Matters is holding 3 stocks that fell yesterday when the market was up 1.6%, never a good sign. So, we will look specifically at these today. Henderson (HGG) $4.40 HGG reported last week sending the popular fund managers’ shares plummeting, basically just days after we purchased them. The company’s report was solid on the fees and dividend front but it is operating margins that are the concern. HGG is cheap compared to its peers but will suffer if market turmoil continues and it experiences fund outflows. Technically the reason to buy HGG has gone but a bounce of ~35c looks close at hand. Because the result was not scary we are not panicking on an exit; ideally, we will cut our position ~$4.70.
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