Viewpoint: Bullish
In August this integrated property company reported FY22 earnings up 24% on FY21 which was a strong result plus they talked to a strong development pipeline for the year ahead. Management guided to 11% growth at the EPS line which is slightly below where the market was positioned for FY23, however, they do have a habit of under-promising, and over-delivering. We simply feel that GMG’s share price decline of 40% this year is well overdone for this quality business.
Independent platform provider HUB announced an excellent quarterly update last week which included net flows of $3.0bn and FUA of $68.4bn, taking it to the number one listed platform position for such net flows. HUB might not be a cheap play being priced as a growth stock but we believe it’s delivering on performance to justify its current valuation.
Overnight we saw Coca-Cola (K US) beat 3rd quarter profit estimates and the beverage giant raised guidance for the year. Interestingly this is one company that has benefitted from rising inflation as value-conscious consumers don’t forgo their sugar fixes as they successfully bundled different sizes and mixes for today’s consumer. The company now sees organic revenue growth of 14-15% which sent shares up around +2.5%.
US indices rallied again overnight led by the Tech Sector as earnings helped sentiment plus bond yields slipped lower. Among companies beating expectations and subsequently rallying was Coca-Cola (KO US) but heavyweights Alphabet (GOOGL US) & Microsoft (MSFT US) disappointed and fell in after-hours trade. About 25% of companies have reported earnings so far with more than half outperforming which is a win in today’s bearish environment i.e. things aren’t as bad as many feared.
The ASX200 rallied another +0.3% on Tuesday as it continues to toy with the psychological 6800 area, as we’ve said previously the market set-up is evolving with an uncanny resemblance to its look & feel through late June, into July. Four months ago once the consolidation was over the market rallied strongly without a backward glance, we are currently wary that many investors are too pre-occupied with the Fed’s interest rate decision and rhetoric next Tuesday when a more…
Sleep disorder business RMD has enjoyed one of its major competitors, Phillips, suffering a significant product recall enabling RMD to increase its market share. Conversely, the business has struggled like many with the shortage of computer chips but this is improving at the same time Philips is likely coming to the end of its issues which is arguably creating a balanced picture.
CSL is arguably now an operational recovery story even though its share price is well above levels through most of 2019. During Covid, donors were apprehensive as virus fears loomed everywhere day to day plus of course, stimulus put plenty of $$ in people’s pockets but both of these headwinds have now largely been removed as donation centers again get busy which should flow down to increasing profits for the blood plasma company over the coming 6-12months.
The Australian Healthcare Sector has been a standout performer over recent decades but as we start a new era of rising interest rates the goalposts appear to have changed with the sector treading water for over 2-years albeit in a very choppy fashion. Traditionally healthcare stocks have been regarded as defensive but with interest rates weighing on high-valuation…
Overnight we saw US stocks add to Friday’s gains with the broad-based S&P500 closing up +1.2% driven by gains in the Healthcare & IT Sectors i.e. traditional growth areas. On balance, we now believe the S&P500 is set to correct its 28% correction year to date with our ideal target area back towards August highs ~4300.
