Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
To James and Crew, Here are a couple of questions for Monday, if you can. Does CSL commencing the production of a covid vaccine warrant a re-rating? With FMG announcing moves into energy production positive or negative in the short term? Any thought on why REA is up approx 17% this month. Many thanks.
Morning Cameron,
CSL $309.46 – After underperforming the ASX in noticeable fashion since March CSL is finally embracing the market optimism. At this stage I would regard the COVID vaccine for CSL as a tailwind as opposed to a re-rerating situation. MM now likes CSL for the first time in many months with stops below $304.
FMG $16.59 – We believe this major bulk commodity producer will be driven by the price of iron ore for the foreseeable future, we remain keen buyers into weakness but well under $15. In terms of their announced move into energy production and the broader concept of sustainability, it was a central component to their recent AGM, they are absolutely serious about it and the numbers they talked about are staggering, setting a zero operational emissions target by 2040. From a SP perspective, targets like this are a short-term negative, hence some pressure on the share price recently. Ultimately this could be the catatlyst we need to see the price nearer $15.
REA $138.17 – the property market in Australia continues to defy the bears and REA is well positioned to benefit from this backdrop as it enjoys a recovery in listings / turnover.
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