What Mattered Today: Stocks up, pessimism down…

James Gerrish

A strong session for Aussie stocks with the market up +50pts – the sell-off yesterday was short lived! The sectors that were weak yesterday got their mojo back today with Feb starting on the right foot. The S&P/ASX 200 index climbed 52 points, or 0.9 per cent, to 6090 while the All Ordinaries rose by the same point and percentage amount to 6198 – CBA and BHP, two stocks we highlighted yesterday were both strong.

ASX 200 Intra-Day Chart

ASX 200 Daily Chart

CATCHING OUR EYE

1.CBA $80.01 / +1.45%; APRA released a progress report on the ongoing CBA inquiry today and the market took the update well, with CBA outpacing a strong financial sector today by 30 basis points. The bank has struggled since mid-2017 as a range of allegations into the corporate culture and compliance errors have been revealed, however signs are beginning to emerge that the worst is behind them and progress is being made. We have been looking to add to our CBA position recently, seeing upside in earnings and also momentum into the dividend expected in late Feb. We own CBA in the Platinum Portfolio.

CBA Daily Chart

2. GUD Holdings (GUD) $12.97 / +5.79; GUD was slugged yesterday, falling to a low of $12.07, but has since rebounded strongly to add close to 5% after releasing half year results yesterday. Initially seen as poor, broker moves today proved otherwise as Macquarie turned positive on the Auto parts and water system manufacturer. The 61% uptick in first half net profits was underpinned by the sale of their cleaning products business, while they continue to look for further opportunities in the Auto parts industry to add growth. Broker moves today noted the benefit GUD could receive by looking for growth by M&A in the near term.

GUD Daily Chart

3. BHP Billiton (BHP) $30.66 / +1.52; one of the better performers in the materials space today was BHP after word began to spread regarding the sale of their U.S Shale Oil business – seems it is based on a note from Shaw’s resource analyst that has gotten some airway. Anyway, stock up, we added to our holding yesterday, which is good.

BHP Daily Chart

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Have a great night

James & The Market Matters Team

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James Gerrish

James is a Portfolio Manager within Shaw and Partners heading up a team that manages direct equity and option portfolios. He is also the Primary Contributor to Market Matters, a daily investment report that offers real market insight.

Expertise

ASX:CBA asx;bhp

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