Viewpoint: Bullish
WHC has corrected over 18% in just 3 -weeks not helped by China now considering intervention in the market as Beijing attempts to rein in rising prices – while never a positive we cannot imagine even their rhetoric will have a substantial impact on prices moving into 2022. It’s a going to take a while and plenty of investment elsewhere to address the current supply and demand issues. A couple of points we feel are worth noting:
The ASX200 rallied over 0.5% yesterday although it was up over 1% moving into lunch before we saw some weakness creep into the Resources & Energy Sectors. However it was still a solid session for the local index which enjoyed over 65% of stocks on the main board advance with a few noticeably accelerating north i.e. 6 stocks rallied by over 5% while only 1 culprit retreated by the same degree.
Freeport-McMoRan Inc. (FCX) is a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company’s segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company’s segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.
KGN +6.68%: The online retailer was out with a business update today which sent the stock to 7 week highs. The new financial year has started strong with sales up 21% on 1Q21 and while profit was down marginally vs the same period last year, it was 31% higher than the previous quarter. Kogan has been struggling with inventory issues however these…
WHC -7.85%: Coal stocks generally were hit today after China’s top economic planner said it is studying ways to intervene in the coal market as the government tries to rein in rising prices and curtail shortfalls. Intervention can be a negative (clearly) however ultimately it speaks to the tightness in the market however it’s difficult to see what they can…
The independent investment platform rallied more than 10% this week following a strong 1st quarter update. Funds Under Administration (FUA) hit a new record at $45.6b, up 46% in 12 months, adding another $1.66b in the first quarter. The sector was alight as well – peers Netwealth (NWL) & HUB24 (HUB) also posted strong quarterlies, between the 3 of them…
Hamish Douglass and the Magellan team have been copping plenty of criticism in recent times about underperformance over the past 12 months or so. Their flagship fund is up +7.57% for the year and is up 13.80% on a 5 year basis. That performance is weak (MM Flagship Growth is +30%) however, we believe the Magellan team are good managers, Hamish…
US stocks rallied overnight with the broad market finally closing only 0.6% below its September all-time high. A new milestone feels inevitable in the coming weeks but I wouldn’t be chasing strength too aggressively remembering the “3 steps forward 2 back” rhythm we see rolling through stocks.
Z1P along with a few other downtrodden names of recent months found some love yesterday which ties in with our bullish outlook into Christmas – these moves are usually characterized by a lack of selling and a surge by some of the “dogs” of recent quarters. We have a short-term target of 10-15% higher but we wouldn’t be surprised to see acceleration by this BNPL name towards $10, especially following Mondays strong quarterly report.
The miners struggled on Tuesday with RIO the worst of the large iron ore names falling over 3.25% while BlueScope Steel (BSL) went one step further tumbling over 3.5% to test the psychological $20 area. Like other stocks exposed to the bulk commodity BSL looks like it’s got further to fall but as an aggressive play we like it under $19 targeting an initial bounce of 15%.
