It is a fact not often highlighted by investors in energy and mining stocks, but financial market participants tend to treat producers of crude oil and natural gas more favourably than they do mining stocks. Show More
Let's be brutally honest about this: too many investors, both professional and retail, have been focusing on finding value among (apparently) cheaply-priced equities during a time when the share market was making a decisive swing in the opposite direction. Show More
The share market is, above anything else, a mix of conflicting emotions, in particular when assessed on a short term scale. Sometimes even a hint of potential risk on the horizon can set off a stampede of money fleeing onto the sidelines, as has happened on many an occasion, but... Show More
Something fundamentally has changed in the Australian share market and I believe the early beginnings of it can be traced back to late 2012/early 2013. Show More
According to the ruling view that is on display daily on Finance TV and in mainstream newspapers, not to mention the many blogs and other forms of finance commentary on the Internet and on social platforms, inflation is back and the world needs to prepare for much higher bond yields. Show More
Analysis of past reporting seasons suggests those who manage to deliver a positive market beat are most likely to continue enjoying positive momentum for up to three months after their results. Show More
Welcome to the FNArena Reporting Season Monitor for the February result season 2018. The Monitor reports ratings and consensus price target changes, along with brief summaries of the collective responses, from FNArena database brokers for each of the 300+ stocks. Week 3 is now available below with 216 stocks now... Show More
Welcome to the FNArena Reporting Season Monitor for the February result season 2018. The Monitor reports ratings and consensus price target changes, along with brief summaries of the collective responses, from FNArena database brokers for each of the 300+ stocks. Week 2 is now available below with 85 stocks now... Show More
Welcome to the FNArena Reporting Season Monitor for the February result season 2018. The Monitor reports ratings and consensus price target changes, along with brief summaries of the collective responses, from FNArena database brokers for each of the 300+ stocks. Week 1 is now available with coverage of 30 stocks. Show More
The February corporate reporting season in Australia takes place against a background of global equities going through a 'Risk Off' phase with Wall Street correcting from dizzying highs. Show More
On my assessment, what we are witnessing here is the gradual but undeniable impact from technological disruption, regulatory scrutiny and increased competition; factors that within the Australian context were always going to impact hardest on sectors that not so long ago were dominated by well-entrenched duopolies that are by now... Show More
It is a popular sport around the traps of the Australian share market to tear down popular growth stocks trading on high Price Earnings (PE) multiples. But as I like to repeat, time and time again, Price-Earnings multiples are misunderstood by most investors and equally so by most analysts and... Show More
The difference in internal market dynamics in Australia and the USA was almost perfectly illustrated by market updates from Amazon overseas and from ANZ Bank ((ANZ)) in the local market. Show More
It appears funds managers in Australia found themselves with too much cash on deposit, and with no weakness in September. The industry thus decided it's best to start moving some of that cash into the local share market. Show More
2017 is the first year of global synchronised growth post 2011 and 2018 is expected to at least extend the positive global momentum, so why haven't share prices of miners and energy producers performed better than they have thus far this year? Show More
Shares in Ramsay Health Care (RHC) have found the going tougher, and not just in recent weeks. Open up a long term price chart and there's an argument to be made things started to become a little hairier in 2015, which essentially marked a flat year in a multi-year steep... Show More
"Bear markets are inevitable: the question is not if, but rather when, the next one will occur. The problem is that, while bear markets are very obvious with the benefit of hindsight, they are very difficult to identify in real time." Show More
Not a day goes by without at least one economist, or journalist, pointing towards the housing cycle in Australia with the message: the cycle has peaked. Certainly, recent data support the thesis, at least for high density dwellings, but not so for other segments of the domestic housing market. With... Show More
It seems like such a long time ago, but when I arrived in Australia, back in the year 2000, National Australia Bank (NAB) was the premium banking stock in Australia. Things changed dramatically from the moment a scandal erupted from inside the FX trading desk. That was back in early... Show More
The FNArena Reporting Season Monitor takes the form of a spreadsheet that contains ratings and consensus price target changes along with brief summaries of the collective responses from FNArena database brokers for each individual stock. To access the final spreadsheet providing coverage of all 310 stocks that we have monitored... Show More
To Alan: Thnx. This is what my personal research is all about; working out what effectively works in the share market over an extended period of time, not copying what everybody says should work
To Nan Shi: as an investor one has to rely on forecasts and weigh up risk. If you doubt whether every single industrial company might grow over the next three years you cannot own any company other than for short term trading purposes. I personally have been quite successful in identifying sustainable growth, and so have others. To illustrate this with one extreme example: people have doubted CSL in every single year since listing, yet it still is, and remains, a superb growth story in Australia. This is what investing is all about; identifying which companies will do well over an extended number of years, and enjoying the wealth benefits as a result of it
To Graeme: don't just rely on broad indices to form a view, or draw conclusions. The Small Ords is heavily populated with micro resources companies, which should be taken into account
Hi Aaron, thanks for your message. I can but refer to the story I published since, titled Have You Been Paying Attention? I'd be interested in the "excellent MSCI research papers" you refer to. Can you direct me?
Dear Naheed (and everybody reading this), while I do not disagree with your underlying thesis (growth is paramount for smaller cap stocks), the charts you display are full of noise. I suspect the Growth section is heavily impacted by small cap resources and mining services. You should exclude those to get a more accurate picture. I myself invest in non-cyclical growth, including smaller cap companies, and my return doesn't look anything like the charts you have included. Smaller cap growth stocks have outperformed the broader market since late 2012, but they had a tough time in late 2016. They have significantly outperformed since February 2017. I think this is worth highlighting. All the best.
Interesting observation, in particular the break in trend performance since 2012. I think the answer lies within the fact the share market since has been guided by macro forces such as gradual derating for banks, five-year long downward slide for commodities prices, a fall-of-the-cliff for crude oil, significant shift towards small caps away from large caps, then the reflation trade in 2016, then came bonds movements (& fear), not to mention FX and geopolitical, and, of course, the general derating of bricks and mortar retailers. None of such macro considerations form part of stockbroking analysts' individual stock assessments. Oh, did I mention the period of Expensive Defensives? I think, Tim, if your observation/analysis shows one thing it is that the Australian share market has been in the grip of such broad macro themes since 2012 and that makes individual stock recommendations less reliable.
Disappointment of Q1 is one thing. Disappointment in the composition is another. Now Q2 numbers are being scaled back too. That's the real story behind the Q1 disappointment
James, yes this is nitpicking, but 19.8% year-to-date? That looks more like the return since mid-2014 to me?
Daniel, within the framework of what can possibly become the next unintended consequence of Fed reducing global liquidity I think your observations/predictions direct attention to one possible outcome. Well done
Hi Jordan, I get a bit tired of hearing that gold is such a great protection against inflation. History shows this is way too simplistic as a statement. I agree that gold's fortunes are determined by many factors and we both probably agree on the fact that many statements about gold are too simplistic. No harm intended. As a matter of fact I am amongst those who advocate investors should always consider having some exposure, in line with how comfortable/uncomfortable one feels about the world. Anyway... gold... it can be the subject of hours of long debates and discussion...
Fiercely disagree with your view. Gold is a rather unreliable protector against inflation - was there inflation in the nineties? Yes, there was!- but history shows, like the 1970s, that gold jumps to the fore during times of high inflation. High inflation is not just inflation. This whole gold=inflation protector is not supported by historical evidence. It's a mass-delusion, though oft repeated (but that still doesn't make it correct)
James, The highest cash balance was at 26% in Sep 2011. Over the past 1.5 years the cash portion has remained between 18-20%. Unfortunately, we do not have references pre-GFC (as we only started this survey in 2011) but I am confident cash levels would have been a lot lower in those days. I still think 20% cash is a lot and probably reflective of the cautious mindset of investors post-GFC. We haven't seen this lower than 18% as yet, and that's a telling stat too, in my opinion.
James, the market is 100% CERTAIN that BC Iron will be forced to cut its dividend next year. Just goes to show, drawing up tables at face value can make for some nice value traps
James, that's because, unlike smaller pure plays, BHP and RIO offer capital management options plus div support
Very interesting on the back of the Boral transaction that was announced on Friday. Interesting to see how that progresses in the view of the ACCC. I would suggest there is 50% chance that the merger/consolidation goes through given that bricks in general as a construction material are on the decline.