Viewpoint: Bullish
US stocks were dragged higher by the Tech Sector overnight following Netflix’s result which led to a +7.4% relief rally by the beleaguered streaming company. It was a choppy session for the index as we saw ongoing switching from defensive names in the likes of utilities and healthcare into recovery stocks primarily in tech and consumer discretionary. In aftermarket trading…
This plumbing business has been out of favour since late 2021 having endured a 48% correction with higher input costs plus the common concern around the strength of the consumer as interest rates rise weighing on the stock. With revenue estimated to grow by over 9% to $1.304bn in 2023 we feel the stocks fairly cheap on an Est P/E of 16.4x for 2022.
To reiterate/clarify the roadmap MM believes stocks will follow in this fascinating market which overall we do believe is “looking for a low”:
DSK 8.88%: the candle & home fragrance retailer looks to come in ahead of expectations at their full-year result following a strong FY22 update today. Sales are expected to hit $138m, and while down 7% on FY22, it remains 37% above FY20. LFL sales fell 10.% in the year after comping some strong FY21 numbers and battling store closures. EBIT is expected around $26.5m which…
MP1 +23.03%: the network connectivity business was out with their 4th quarter update today with the company’s performance bouncing back after a slow start to the year. Revenue in the final 3 months was up 10% on the third quarter, adding 533 new ports and posting a positive EBITDA in the quarter for the first time. After only growing monthly recurring revenue (MRR) by $300k in the…
ILU +7.19%: A strong quarterly production update today from the leading mineral sands company globally with their products being used in all sorts of applications, from paints to tiles, batteries and many essential things in between. Prices remained high as supply stayed tight, a theme we expect to continue over the medium term even though Chinese property has been weak. Moreover, CY22 has seen…
FCX is a major global Copper miner that has halved in price over the past 6 months as recession fears mount. MM sold its position in FCX above $US50 in March and we once again see value in this well-managed, geographically diverse miner.
Oil has pulled back and found strong support around US$90/bbl and has now resumed its uptrend. Exxon, being the world’s 2nd largest energy company (behind Saudi Aramco) has followed suit. Recession fears drove the recent ~25% decline however ultimately, we think supply-side constraints caused by ESG concerns plus importantly, the rising costs of new development will keep energy prices high for an extended period underpinning very strong cash flow across the sector.
The uranium miner announced plans to restart production at the Langer Heinrich mine in Namibia in early 2024 after what will be 6 years of care and maintenance. The restart is now estimated to cost $US118m, up from previous estimates of $US87m, with the company prepared to fund the full project restart if need be with $US177.1m of cash in hand. The project has around a…
Our most recent purchase in the Income Portfolio seems to be once again in the sights of Perpetual (PPT) with the company going in and out of a trading half yesterday on rumours that PPT was back at the table. As a refresher, Pendal is the renamed BT Financial that was spun out of Westpac and back in April of this year, Perpetual launched a $2.4bn takeover attempt…
