Campbell Neal, Managing Director of K2 Asset Management: I'm not bullish on Australia's position, though there are still some wonderful opportunities
Campbell Neal, Managing Director of K2 Asset Management: I'm not bullish on Australia's position, though there are still some wonderful opportunities. Some stocks continue to defy the economy and produce good ROE, and allow fund managers to generate alpha. Examples include Flight Centre (FLT), Greencross (GXL), M2 Group (M2). Greecross stands out. It is successfully consolidating a fragmented Veterinary market, but still has just 5% of the market. It plans to secure 20%, and is light years ahead of competitors. With continued acquisitions, its move into Pet Barn, and a new CEO, it still has a great deal to offer. The price is supported well with its dividend of about 4%. The question is what do you pay? It is over thirty times forward earnings, so needs to deliver growth to justify that. Greencross should continue to do well providing there are no shocks to challenge its high PE.