Catherine Allfrey from Wavestone Capital and Chad Slater from Morphic Asset Management highlight the best and worst from reporting season, including one company that Morphic has been openly short on, but has revised its view post-reporting season, saying: “My god, it was a good result.”
The big picture
- Results season gets 7/10: “It just wasn’t that bad”. Cyclicals into year end, they are unloved and underheld and mining stocks are cum upgrade.
- Outlook statements highlighted some 2018 headwinds. Monitor flow-ons from energy costs.
- Chad has been openly short this stock, but results showed remarkable improvement in conditions. Management has turned the ship around in under 6 months. Relatively expensive on 20 times, but “I think you’ll find it on 16 times by year end.”
- Catherine: “You can't go past this stock. Outstanding.” 50% rev growth, and 150% profit growth. More to come.
...and the worst
- Chad: “Tesltra, a big ship stuck at sea, adrift with nowhere to go with holes leaking, it’s a horror story sinking... I wouldn’t go near it.”
- Catherine: Healthscope, Bluescope, Telstra all very disappointing for company specific reasons.
In the latest episode of Buy Hold Sell, Catherine Allfrey from Wavestone Capital and Chad Slater from Morphic Asset Management share their view on Flight Centre, Harvey Norman, Coca-Cola Amatil, Qantas, and Treasury Wine Estates. You can watch it here: (VIEW LINK)
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