Viewpoint: Bullish
QAN is an obvious candidate in today’s lockdown environment and while it’s not often that your hear me or MM advocate airlines the risk / reward for QAN looks great under $5 – for the chartists out there the price action looks almost identical to SYD since 2019, will lightening strike twice?
Shopping centre operator VCX is cheap in our opinion and it’s forecasted yield well above 6% is again clearly attractive but after raising capital at $1.48 there remains a lid on the stock through 2021.
Queensland coal operator AZJ has largely disappointed investors over the last decade since its float but under $4 we see distinct value in this $7bn business.
Toll road operator TCL has understandably struggled through COVID as the traffic on our roads has fallen, dramatically at times as lockdowns continue to roll across the country.
MM was on the right end of takeover interest in Crown Resorts (CWN) although the regulatory risks and hassles have capped the stocks upside since May, if we had been nimble and had sold CWN above $13 we would be looking to re-enter at current levels below $12 as the risk / reward becomes more attractive as the stock slips lower on ongoing compliance concerns.
US stocks were closed overnight for Independence Day leaving the Dow less than 1% below its all-time high, an almost inevitable milestone considering the strength of the uptrend.
Conversely unlike Whitehaven the oil stocks are struggling to embrace the huge rally in the commodity post the pandemic e.g. oil is ~25% above its 2019 highs whereas heavyweight WPL is ~30% below its equivalent level.
WHC continues to shrug off average / poor operational news and follow the underlying coal price higher, the disconnect between the 2 remains firmly in play and we can see WHC punching well clear of $2 and potentially rallying towards $3 as we slowly move towards 2022.
Monday morning should have reminded us all that M&A is alive and well in 2021 as an infrastructure consortium bid $22.6bn for the embattled Sydney Airports (SYD), the 42% premium to Fridays close would have sent a sigh of relief through much of the local investment community who have been major supporters of this classic “yield play” stock since the GFC.
Vicinity Centres is an Australia-based company that is primarily engaged in property investment, property management, property development, leasing and funds management. The Company operates through two segments: Property Investment and Strategic Partnerships. The Property Investment segment includes investment in retail property. The Strategic Partnership segment includes fee income from property management, development, leasing and management of wholesale property funds. Its properties include Bankstown Central, Bayside, Buranda Village, Chadstone, DFO Perth, Emporium Melbourne, Queen Victoria Building, QueensPlaza and The Glen. The Company operates approximately 60 retail assets under its management.
