Viewpoint: Bullish
US stocks experienced another choppy session overnight as traders weighed up the prospects for an economic soft-landing as the Fed becomes increasingly hawkish. Retail investors are one group who have taken a bearish view with the bull-bear spread at its most pessimistic stance since the start of 2023.
Earlier in the week printed circuit board design software provider delivered its 1H23 result which was a touch light for the pedantic investor but they maintained their FY23 guidance for revenue of $255-265m i.e. a growth rate of 15-20% on FY22.
Logistic software giant WTC continues to invest heavily in R&D ($755mn in 5 years) and the result is a great product with compelling pricing power. The markets embraced its latest result which saw revenue grow 35% to $378.2mn, our only concern is that after 43 acquisitions in 6 years, it’s going to become incrementally harder to lift the impact of future purchases making its 81x valuation for 2023 a touch daunting.
CAJ -3.64%: first half numbers were a touch light, but the trend is turning with momentum building for the diagnostic imaging company. EBITDA of $20m was a 5% miss to consensus however this includes some stale analysts that hadn’t updated post-recent industry data prints.
NEC -2.91%: the media group struggled today despite a decent 1H, weighed on by non-committal guidance at the result. Revenue of $1.4b was in line with consensus, as was NPAT at $189.5m with the result driven by market share gains in free-to-air and a beat by streaming platform Stan while radio was in line and 9Now missed slightly.
PPT -2.81%: While the result was inline in terms of underlying profit, the composition of earnings were weaker, particularly in the prized Trust business where costs were higher. While these were offset by lower costs in Perpetual investments, it seems like cost growth is tracking along at a higher rate overall than the ~6% they guided to.
SIQ +7.38%: The car leasing and salary packaging company reported FY22 earnings that were as expected today, with full year revenue of $224.7m meeting expectations while underlying net profit of $61.2m was inline. The final dividend of 29c took the FY payout to 49c, ahead of expectations while they talked fairly favourably about a number of growth initiatives in the business.
US stocks closed mixed overnight with the Dow falling -0.3% while the NASDAQ edged higher +0.1%, concerns that rates will stay higher for longer continue to weigh on investor sentiment – several officials said an “insufficiently restrictive” policy could stall the recent progress of tempering inflation.
EVN has followed in the footsteps of many companies who’ve disappointed with this season’s earnings i.e. they’ve struggled to bounce. First-half numbers came in this month on the light side just after the share price had almost doubled i.e. a dangerous combination.
Australia’s largest gold producer NCM delivered a solid report last week but at the same time, they rejected a takeover offer from Newmont (NEM US) although they did offer the suitor the ability to look into its financials to try and entice a higher bid – at least encouraging that there’s probably nothing too untoward lurking in the shadows of its accounts, but less encouraging that no further announcement has been made about this arrangement.
