Viewpoint: Bullish
ANZ is the only banking stock to shrug off the recent “Banking Crisis” to trade higher in 2023 albeit, by a minor +0.5%, the stock is forecast to declare an enticing 72c fully franked dividend in early May. ANZ still looks inexpensive in our opinion relative to its peers and when combined with its strong competitive position being more institutionally focused and wholesale funded keeps it as one of our preferred sector plays.
Cleanaway Waste Management is a leading provider of waste management and environmental services in Australia, it operates across 200 solid, liquid, and industrial service depots. Cleanaway’s primary business is the collection, processing, and landfilling/recycling of municipal, commercial, and industrial waste.
WHC -3.17%: hit today on a production downgrade, although the worst of it was seen early with the stock down ~7% at the lows. They said production would be lower than expected in the March quarter due to Labour shortages, and this has impacted FY23 guidance to the tune of 1Mt – or around 5.5% of total volumes.
EVN +3.85%: the second most talked about gold stock today, Evolution Mining, downgraded production expectations in a move that surprised no one. About a month after flagging weather issues impacting their Ernest Henry mine, Evolution quantified the lost production by downgrading production by around 8% to 660koz as a result of the downtime.
Diversified metals and mining company S32 has sat on our Hitlist for many months, we believe its slowly becoming attractive, it currently trades on an Est 9x valuation for 2023 plus it’s also forecast to yield more than 5% over the next 12 months. In our opinion S32 gives an excellent diversified resources exposure without the huge exposure to iron ore which comes with both BHP and RIO.
MIN is a volatile stock and investors shouldn’t be surprised by the iron ore/lithium miners more than 20% correction, it’s actually the 5th time since just mid-2021. We believe this is an excellent company which on an Est valuation of 11.2x for 2023 represents good value with both of its respective commodities enduring a short term downward cycle.
We are holding 5% in NCM, a position that has struggled over the last 18 months but it’s finally coming good aided by February’s all-scrip $24.4bn bid by Newmont (NEM US) – that bid of 0.38 shares for each NCM share is only worth $28.90 this morning, it’s our opinion the US suitor will need to offer in excess of $30 to vaguely excite the board and existing shareholders like ourselves.
SEK -0.95%: The online recruitment platform downgraded full-year revenue guidance today, but maintained FY earnings expectations showing their ability to pull the cost levers in response to softer demand for job ads.
US stocks rallied again overnight with the Energy Sector up almost 5% driving the Dows +327 point gain. We feel the upside bounce by stocks is slowing maturing and the press/pundits will start to quote “sell in May & go away” over the coming weeks, certainly the most comfortable option for investors after the recent uncertainty around the banking crisis.
