Since the start of reporting season, we’ve seen the strong keep rallying while the weak get weaker – a messy way to describe a trend. Statistically, acting quickly after a stock beats &/or misses in a meaningful way pays dividends in terms of jumping on board the train as opposed to fading respective moves i.e. we get follow-through.
- We expect stocks to continue to embrace both good and bad earnings reports e.g. we are not looking to buy initial weakness in stocks such as Commonwealth Bank (CBA) and AMP Ltd (AMP).
Hence this morning we have focused on 4 stocks that have rallied following their earnings reports to evaluate whether we like them as an addition to the MM portfolio i.e. we have no issues buying rising stocks, we are far more interested in where they are going as opposed to where they’ve been.
MM is neutral to negative CBA over the coming weeks/months
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