Viewpoint: Bullish
The closely watched US S&P500 continues to struggle on the upside whenever it tests the overhead resistance line illustrated below, another attempt in March is likely to see MM reduce our market exposure in line with our volatile outlook for 2021
As we mentioned earlier US 10-year bonds surged higher last night unsettling stocks along their way, however they have backed off from the ~1.6% level breached early this morning, my “Gut Feel” is that our short-term panic blow off is in place with a pullback / consolidation now feeling likely in yields.
US stocks were hammered overnight as bond yields pressured risk assets, the short-term support from Jerome Powell’s (Fed) reassurances around interest rates didn’t last for long and is an eye catching concern for MM moving forward.
MM has been showing a few different Resources Stocks over recent weeks to illustrate our view that their surge higher had further to unfold
RHC was one of the markets best performers yesterday rallying almost 8% following a strong 1st half result aided by strong cost cutting across Europe and the UK, we feel this puts the business in a strong position for the new post COVID environment.
“Long and wrong” is unfortunately the first thing that comes to my mind when I consider our recent purchase of a2 Milk (A2M) following another poor report yesterday and perhaps more importantly clouded outlook
3P Learning (3PL)provides educational services. The Company owns and operates a website for students, teachers, and mathematics coordinators with a focus on e-learning of mathematics. 3P Learning serves the kindergarten through twelfth grade curriculum worldwide.
The numbers were strong – Zip are good at keeping the market informed with almost monthly updates so they shouldn’t have come as much of a surprise. Transaction volumes a huge 141% ahead of 1H20, dropping down to revenue of +130% meaning revenue margins were a bit tighter.
EBITDA for the half fell marginally to $1.04b, covering more than half of the market’s full year expectations. In part the EBITDA line was held up by Government grants and agreements which will slowly roll off, as well as a small gain realised on the sale of assets in Australia & Europe.
A very strong 1H21 result from the integrated marketing business and the stock should track higher from here. While top line revenue of $340.8m was pretty much inline, they’ve managed costs very well, margins have been improving and they’ve managed to pay down a lot of debt ($47m) during the half.
