Viewpoint: Bullish
The ASX200 struggled higher on Monday following an early morning sell-off to finally close up +0.2% courtesy of a stellar performance by the Resources Sector e.g. South32 (S32) +6.2%, Fortescue Metals (FMG) +6.6% and OZ Minerals (OZL) +3.7%. The end of reporting season continued to deliver extreme moves on the stock level with Altium (ALU)…
FY21: The casino was out with results today that provided a good outline of the woes they’ve faced over the past 12 months thanks to lockdowns, lost revenue and Royal Commissions – can it get much worse? That’s ultimately the question for investors and today CWN did their best to paint a picture of better times ahead, that of course will be dictated by…
FY21 result: Shares getting hit today down 11% at time of writing after they beat consensus for FY21 and upgraded revenue guidance for FY22 however downgraded margin guidance, now expecting EBITDA margin between 34%-36% (vs prior target 36-39%), implying EBITDA for FY22 between $70-78. Consensus for revenue in FY22 was $202m…
FY21 Result: Slight beat for the online beauty products retailer at their first full year result today. Adore had revenue of $179.3m, coming in just above the top end of guidance, around a 3% beat to market. EBITDA grew more than 50% to $7.6m, though slightly below market expectations despite big jumps in marketing and staffing costs. With gross…
Last week crude oil rallied over +11% while the Australian Energy Sector fought hard to rally +0.8% illustrating a clear lack of belief towards the likes of Woodside (WPL) and Santos (STO). MM believes this is an example of pessimism having gone too far and the risk / reward favours accumulating the local names with Santos (STO) our preferred option.
Copper has been a standout in the recovery by the commodity prices over recent sessions, the industrial metals has already recovered 9% from its August low. We are looking for ongoing strength to ultimately break $US500/lb into 2022, assuming we are correct a great read through for the Resources Sector and in particular stocks such as OZ Minerals (OZL).
The Aussie along with copper is largely regarded as the perfect proxy for global growth and in-line with bond yields and the $US it bounced strongly last week. Our view is consistent here, we are looking for an eventual test of 90c in 2022 but whether we’ve now seen the bottom of its pullback from ~80c is still 50-50.
Not all equity indices move together and the Emerging Markets (EM) have corrected ~16% from their February high, very much in-line with a recovery in the $US and painful slump by Chinese names following their tightening of regulatory controls. Over the coming months we believe the recovery by EM will outperform the potentially stretched S&P500.
The ASX200 had a choppy but overall uneventful week on the index level but under the hood reporting season continued to deliver some fascinating volatility. History tells us that companies which rally strongly on good results generally outperform the index for months to come, a couple of lines from Jim Cramer’s Mad Money on CNBC over…
