Viewpoint: Bullish
Laboratory testing, inspection and certification business ALQ remains 16% below its 2021 high, we feel as commodity prices continue to rally the backdrop for exploration remains strong. We’re bullish the Queensland based business targeting a a break of its 2021 high but the risk / reward is not particularly exciting hence if we were long it would be a hold but we need it under $11 to become attractive as a buy.
SUN surged over 5% yesterday following a strong 1H22 result which beat expectations. Cash earnings of $361m were well ahead of the anticipated ~$330m, plus the dividend of 23c was better than expected putting the stock on a estimated fully franked yield in excess of 5% over the next 12-months. While it was a challenging half the general insurance division…
The most important bank in Australia has released 1H22 earnings this morning that are ahead of expectations along with a $2bn on-market buy-back. Cash earnings of $4.75bn for the six-months to Dec was a 5% beat to consensus of $4.51bn, while the dividend of $1.75 was also a beat. Margins remained under pressure with Net Interest Margin (NIM) at 1.92% due to low rates, however…
MQG +3.89%: a record quarter for Australia’s largest Investment Bank today saw shares rally back above $200. The strong performance was driven by the market facing business that benefitted from strong investments and trading revenues with the company saying net profit YTD is “substantially up on FY21 YTD.” The annuity style business that houses asset…
PPT has certainly outperformed MFG over the last 6-months but it has also drifted lower , having said that it now looks solid around the $35 area. We believe the stocks fairly cheap at current levels with an estimated yield above 5% fully franked very attractive even as bond yields nudge higher. However PPT is going to find it tough to rally if we see ongoing volatility / weakness in global equities meaning it’s unlikely we will buy short-term although it does clearly appeal from a yield perspective.
Conversely we think the tech stocks will struggle to post fresh highs in 2022 after too many big names have been rerated on the downside, a great illustration around how stock / sector selection combined with some astute timing will be required to add decent alpha through 2022 – we shouldn’t expect to get everything correct but its shaping up to be an Active Investors dream for the next few years.
The story of 2021 / 22 has been the major rise in inflation and hence bond yields, I remind subscribers of 2 points that will hopefully add some alpha through 2022:
Coal is another fossil fuel which has been rallying strongly of late and like crude oil it looks likely to make new highs putting increased pressure on fund managers who have gone all-in on ESG names i.e. The rise of the environmental, social and governance (ESG) investment thematic in Australia over the past 12 months has been enormous but investors who didn’t get in early are starting to underperform.
Crude oil has been following the MM roadmap perfectly through 2021 and into 2022 although the easy money now feels behind us but another 5-10% upside feels very possible. Its been over 7-years since Brent Crude was trading above $US90/barrel but as demand outstrips supply helped by bad weather conditions in the US and ongoing political turmoil the…
The Euro’s surge last week following Lagarde’s comments helped MM’s underwater position in our Global Macro ETF Portfolio buts its clearly not out of the woods just yet. However our view that it cannot just be the US who start raising interest rates if inflation doesn’t prove transitory now looks on point and the relative strength of the greenback over…
