The trends this reporting season were the same ones that have dominated for a while

Nathan Bell

Intelligent Investor

The trends this reporting season were the same ones that have dominated for a while. Stocks showing rapid earnings growth, increasing dividends and those with large overseas earnings continue to see their share prices bid up. As China's and Australia's economies slow these themes are likely to stay in place until the fundamentals drop away and investors realise they've paid too much e.g. if the Chinese economy or the Aussie housing market cracks then the earnings simply aren't going to support current payout ratios. While investors are enjoying the increasing stream of dividends, it also reflects a lack of investment opportunities for many companies, which is what ultimately drives productivity and economic growth and long term sustainable earnings and dividend growth. We're wary that as an economy Australia has no plan B now that the resources boom is puffing out, so good values are hard to find as most of the stocks hitting their lows are indistinguishable from junk.


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Portfolio Manager
Intelligent Investor

Nathan joined value investing publication Intelligent Investor in 2006 after nine years spent as an accountant in corporate and investment banking roles in Australia and the UK. He became Research Director in 2011 and currently covers Australian...

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