Viewpoint: Bullish
The ASX200 is set to open below 6500 this morning within striking distance of this year’s low, we remain keen buyers into the current weakness with a number of our previously flagged stocks reaching our optimum buy areas e.g. Seek (SEK) and GPT Group (GPT). When markets are falling aggressively we generally like to adopt an accumulation approach hence subscribers are likely to receive a few alerts over the coming weeks:
SPK which is formerly Telecom Corp. of NZ has been the standout sector performer over recent years but it’s not particularly cheap above $5 however the trends friend especially in a market as nervous as today i.e. SPK is performing strongly and is in a relatively recession-proof industry. We like SPK on its improving outlook for mobile revenue and prospect of higher dividend growth – they recently reported a strong FY22 EBITDA of $1.150bn which was in line with guidance.
US stocks have been in reverse since the FOMC but as far as we are concerned the major question for now is will the sell-off cycle by equity markets bottom out above, or below, June’s low i.e. 3636 for the S&P500.
The ASX200 was smacked over 100-points on Wednesday as nobody wanted to go home long ahead of a 2-day break which included the FOMC meeting. We feel this uncertainty means the vast majority of any potential buying which may hit the market from the $18bn tsunami of recent dividends from the likes of BHP Group (BHP), RIO Tinto (RIO) and Telstra (TLS) is still waiting on the sidelines.
SOL +27.10%: the investment company rallied to a 5-month high today on the back of strong performance in underlying investments. The company now runs nearly $10b across equities, property and private equity with a strong NAV per share increase of 13.8% in a market that fell. The total value of the portfolio increased by 72% largely on the back of their merger with Milton. They finished the year in a net cash…
WHC +3.82% : Rallied today as they announced their intention to seek approval to increase share buy-backs at the AGM on 26th of October. While this was widely expected, the size being sort is big, up to 25% of issued capital / ~240m shares which comes on the back of a 10% buy-back which is almost complete. Assuming they get approval and buy back the 25% on market…
Airtasker was a hot IPO in 2021 however fortunes have turned as the market shied away from unprofitable tech companies. Management are doing the rounds after their FY22 results and we caught up with them earlier in the week. Airtasker is a founder-led marketplace for local services. It’s a product I have used and had great experiences with, however, their business took a hit in FY22…
The owner & operator of gas transmission and distribution assets in Australia offers two key things we like in this uncertain environment. Predictable earnings that rise with inflation (90% of earnings linked to CPI) and a dependable dividend that is now back up above 5% given the share price weakness. We sold APA Group from this portfolio last month above $12, and now have interest again around…
BHP will reward shareholders with an unprecedented $12.5bn dividend payout this week with the $2.5518 fully franked dividend swelling plenty of bank accounts across the country. We believe that BHP will ultimately buy OZL for closer to $30 per share than its original $25 bid which means investors can simply buy / add to BHP position to increase a portfolios copper exposure albeit in a very diluted fashion i.e. BHP Groups (BHP) market cap is $198bn compared to OZ Minerals (OZL) currently ~$8.8bn.
US indices fell overnight with “risk off” washing across financial markets, even Bitcoin dipped back under $US19,000 taking it within striking distance of its June 17,600 low. Even with bond yields again making multi-year highs the Tech Sector outperformed aided by Apple’s advance, the selling was more focused in the Real Estate & Materials Sectors.
