Resource stocks dig deep today…(AWC, HSO, TLS, BHP)
Another fairly subdued day on the index side however some decent moves in terms of stocks, particularly those that have reported. On the broader market today, the Materials sector led the way while most weakness was felt in the property stocks which lost 0.82% - an overall range of +/- 37 points, a high of 5753, a low of 5716 and a close of 5745, up +8pts or +0.14%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
It’s actually been an extremely busy / volatile reporting season on an individual stock level – more than we’ve seen in a number of years with the market showing very little tolerance for highly valued stocks that miss, or those that give lacklustre outlooks. One of those stocks yesterday was Healthscope (HSO) and today we bought it around $1.77. The volume was big today, bigger than yesterday with sellers on top early however by the close the buyers were finding some ascendancy. The stock closed at $1.785 down 3.77%. We like the longer term story and buying into what seems to be ‘panic selling’ we think should prove fruitful.
Healthscope Daily Chart
Telstra (TLS) was interesting today, and had a very strong close at $3.94 – the selling pressure has clearly been overdone and a close back up above $4 would be bullish for the stock. We bought at $3.85 this week as the majority dumped it on a bigger than expected cut to the dividend. We won’t fall in love here, however a run up to $4.20 would not surprise.
Telstra Daily Chart
Alumina (AWC) reported strong numbers this morning with an earnings beat ($148m versus $134m consensus) and a cracker of a dividend underpinning our decision to have the stock in both the MM Platinum and MM Income portfolio. The backdrop of a strong Alumina price and the pass through of cash from AWAC creates a very good story and one we should continue to hold. Alumina added +5.91% to close at $2.15
Alumina Daily Chart
Elsewhere in the commodity complex, BHP had a good session adding 2.15% to $26.60 and we remain happily long here, looking for $28, while out switch from RIO into BOQ is yet to pay dividends – RIO up 3.06% today to close at $66.96 – clearly we sold too early! More on that in tomorrow’s am report.
BHP Daily Chart
Have a great night
The Market Matters Team
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