Viewpoint: Bullish
MFG -8.41%: the fund manager is continuing to refocus its business, today announcing the sale of its 11.6% stake in Mexican fast-food chain Guzman Y Gomez. They’ll book a 36% profit in just under 18 months, selling the stake to Magellan backed Barrenjoey for $140m, with an additional $6m linked to the company’s performance. The proceeds will go towards ongoing capital management with Magellan shares currently 70%…
A simple glance at the CRB Index over the last few years illustrates why inflation was the hot topic in last night’s political debate – not that either party can do a great deal about the rising global problem. How far & fast commodities rally over the coming years is largely guess work but at MM we do believe a new “Commodities Super Cycle” is a distinct possibility and the inevitable pullbacks in most…
MFG has certainly occupied a huge amount of real estate in the financial press over the last few months but we now believe the investment management company is looking good as a quasi-growth play. We really like the risk / reward initially looking for ~30% upside, we have refrained from calling this falling knife a buy throughout 2022 but its been attracting bargain hunters over the last 2-months as the combination…
Firstly identifying a classic Australian tech stock as our 1st pick was a tough ask after so many good companies have been hammered over the last 6-months on valuation concerns. We finally opted for Xero (XRO), a stock we hold but as a stand alone right here right now scenario we believe XRO is the best pure local play, especially as its likely to gap lower this morning – we believe the next 20% for XRO from todays open will be on the upside.
Overnight we saw US tech stocks post a slight fresh 12-month low, not a great vote of confidence in our view but things do look their worst around bottoms. At this point in time we are going to fall back on simple technicals to identify the risk / reward towards our short term bullish stance on tech – a move back above 13,100 will trigger a buy otherwise it’s a wait and see.
The US market was smacked overnight as investors started to lose confidence that the Fed can both stem inflation and avoid a recession, as we’ve said before it’s a tough balancing act and one which could go either way. In the bigger picture stocks are still relatively close to their previous all-time highs and more importantly we don’t believe a recession is built into current valuations – a worry medium term.
The banks have wobbled over the last 48-hours following ANZ & NAB’s 1H22 results, yesterday saw NAB slip -0.6% although on balance we felt their result was a beat in most areas. However on a positive note NAB did rally ~3% from its early morning low implying there’s still plenty of appetite for the sector into any weakness plus of course next weeks 73c fully franked dividend for NAB, and 72c for ANZ. We are still looking for a…
QAN -0.35%: the national carrier announced the acquisition of Alliance Aviation (AQZ) in a scrip deal for an enterprise value of $919.2m. Alliance runs a fleet of 70 aircraft servicing domestic charter flights largely servicing FIFO mining workers, also operating the Qantas Link services with Qantas their single biggest client. The deal is expected to be EPS accretive from day 1 pre-synergies while Qantas will look to reduce…
The US NASDAQ rallied +3.4% overnight following the milder than feared comments from the Fed, as we’ve discussed a few times over recent weeks the markets positioned itself very anti-growth as bond yields have soared through 2022 and we can see a 10-15% relief rally by the US tech sector from the current area. In essence MM believes the market has become too hawkish and the likelihood is come Christmas…
The correlation between NCM and the underlying gold price is undeniable however we believe both have held up relatively well in the face of soaring bond yields and strength in the $US. If we are correct that bond yields are due a rest and tech can bounce the likelihood is gold and NCM will follow suit, just as we saw overnight, hence at this stage we remain comfortable with our long NCM position.
