Viewpoint: Bullish
GM disappointed investors overnight after delivering a $US2.8bn profit accompanied by a cautious tone, the stock fell the most in 12-months with concerns around chip supplies an issue for 2nd half production – there are plenty of companies with the same problem at the moment including Deere & Co (DE US) we discussed yesterday, ultimately this will present an issue for company guidance by the look.
When things look their worst opportunities often arise and this was definitely the case with UK based fund manager JHG. Operationally this business looks to have risen from the ashes like a phoenix, last month it produced a quarterly update which almost doubled its profit compared to last year while also announcing a $200m buyback, the stock looks bullish until further notice.
Mining services stock MND has bounced 22% from its mid-June low, a move we flagged close to the low but felt unable to exploit due to our large weighting towards the sector. The company continues to land new construction and maintenance contracts and although skilled staff are becoming harder and more expensive to secure the net…
The ASX200 enjoyed a solid session on Wednesday basically closing on its all-time high, although only 55% of stocks rallied when the major banks and miners advance it’s going to be another win for the bulls. Fresh bad news is rapidly becoming increasingly thin on the ground clearing the way for further gains into Christmas for an index which has already rallied +13.9% so far this year.
General Motors Company designs, builds and sells trucks, crossovers, cars and automobile parts and provides software-enabled services and subscriptions worldwide. The Company provides automotive financing services through its General Motors Financial Company, Inc. (GM Financial) segment. GM North America (GMNA) and GM International (GMI) develops, manufactures and/or markets vehicles under the Buick, Cadillac, Chevrolet and GMC brands. The Company’s segments include GMNA, GMI, Cruise and GM Financial. Its Cruise segment is engaged in the development and commercialization of autonomous vehicle technology. It offers OnStar and connected services to approximately 22 million connected vehicles globally through subscription-based and complimentary services. It is also developing hydrogen fuel cell applications across transportation and industries, including mobile power generation, class seven/eight truck, locomotive, aerospace and marine applications.
MNY +2.26%: managed to negotiate to double its available financing facility in the auto lending book it acquired earlier in the year. The facility has been scaled up to $100m now for AFS with some substantial growth seen in the business since the book was purchased. Finance markets remain strong with MNY flagging $1b loan book in the near term, rounding out FY21 at $601m.
GMA +7.55%: The Mortgage Insurer released 1H21 results this morning that showed improvement and importantly a strong capital position. We’ve owned GMA in the past for the income portfolio and made money, however it’s a notoriously difficult business to asses. In simple terms, this result was largely inline in terms of half year profit which came in at $76.4m while the dividend of 5c was welcome but below expectations.
BWP Trust (the Trust) is an Australia-based real estate investment trust, which is engaged in investing in and managing commercial properties throughout Australia. The Trust aims to provide unitholders with a secure and growing income stream and long-term capital growth. The Majority of the Trust’s properties are large format retailing properties, in particular, Bunnings Warehouses, leased to Bunnings Group Limited (Bunnings). Bunnings is a retailer of home improvement and outdoor living products in Australia and New Zealand, and a supplier to project builders, commercial trades people, and the housing industry. The Trust is the owner of Bunnings Warehouse sites in Australia, with a portfolio of approximately 65 stores. Seven of the properties have adjacent retail showrooms that the Trust owns and are leased to other tenants. The Trust also owns about six large format retail showrooms and has three vacant properties. The Trust owns approximately 74 investment properties.
The portfolio added +1.10% in the week while cash sits at ~5%. No major change here which is common with macro portfolios, by definition we are only likely to significantly adjust holdings once or twice per year. Our primary view around interest rates is not yet supported by a position being that bond yields are looking for a low, we’re very close to pulling the trigger here and potentially leaving a resting bid in the market below recent lows.
Deere & Co manufacture and distribute a range of well-known agricultural, construction and forestry equipment. It’s a defensive style industrial business that trade on a Est. P/E on 20x. We are looking for DE to make fresh all-time highs into Christmas with technical projections of ~25% higher, obviously this is a call with the trend which increases the chances of success.
