Favoured cyclical stocks: A risk worth taking
An improvement in global and Australian economic growth, together with some further weakness in the Australian dollar, over the next year or so is essential for the cyclical (or economically sensitive) stocks because economic growth upgrades will drive earnings and dividends upgrades, which in turn will not only justify current share prices but also drive share prices higher. With that in mind, cyclical stocks are likely to remain volatile as the evidence of economic growth waxes and wanes. Apart from the cyclical stocks already included in our Favoured Yield Stocks — the four major banks, Bank of Queensland, Bendigo and Adelaide Bank, AMP, FlexiGroup, JB Hi-Fi, Nine Entertainment Company, and Super Retail Group — we have identified another ten Favoured Cyclical Stocks. Watch our Head of Research Services Peter Quinton runs through our favoured cyclical stocks for April via this link
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