Good afternoon,
Rough old week on the markets, though guess what... index is still at 5906 or near enough 6000. Funny how the newspapers make a mountain out of a molehill.
|
|
|
On the chart below, I've indexed the major sectors listed above at 100 on 30 June. It's a bit messy but as you can see, there's some pretty material differences (10% gap over only a 2 and a bit months.)
|
|
You don't have to be a rocket scientist to know that top line is the tech sector. This has been driven by 42% increase in Wisetech (WTC), 30% increase in Megaport (MP1), Nearmap (NEA) and Afterpay (APT). NextDC (NXT) also outperformed +12%. Drags from Bravuru (BVS) -20% and Technology One (TNE) -13%.
The bottom line is Energy (which includes thermal coal stocks). Whitehaven (WHC) -40% the big loser... which at 30 June had buy recommednations from 73% of analysts and a $2.61 consensus price target (share price at the time was $1.43)... it's now $0.85 per share. Just a good example of why you gotta pay attention to analysts and not listen to them at the same time. Know what I mean?
It kinda gets more interesting when you look over the last 30 days.. it's been property and industrial stocks that have been bid up.
|
|
In property, its been the shopping centres (that's right, shopping centres). Charter Hall, Scentre Group, Stockland all returning 10-15% over the past month. Then it's the office and general commercial guys like Dexus, Abacus, Waypoint, Growthpoint and Vicinity all outperforming their sector benchmark. URW, CIP, INA and CMW the worst performing.. all red, c. -1% to -10%.
In the industrial space, its RWC +40%, MND +37%, NWH +24% and QAN +20%. IPH -10%, GWA -4%, CIM -3% and QUB -2% the laggards.
|
|
Is it time to buy the companies that COVID almost killed?
I think it depends.
(Returns listed below since 14 Feb, just before COVID kicked off)
I'm not sure Flight Centre (FLT -62%) and Webjet (WEB -61%) are ever the same. Sure, after a vaccine there will be an explosion in travel worldwide and all the boats might rise with the rising tide but I'm not sure, particularly in the case of FLT, the business model survives. Everything else is self-service, platform, subscription, online... why the hell would anyone use a travel agent?
Whitehaven Coal (WHC) is -65% but I think that bounces back on thermal coal price stability and cost cutting. I'm not so bearish thermal coal in the short term, with most of the power stations in the developing parts of the world less than 15 years old and key to helping those nation electrify. Yes, I realise its bad for the environment, but doesn't change the fact India cares more about having cheap, reliable electricity in their homes and workplaces than the environmental impact of that power. Coronado (CRN) also negative 65%, but I don't really follow it.
It's not performed as poorly, only down 38%, but New Hope Coal (NHC) would be my preferred way to play this. Upside from permitting, longer life assets and I'm biased but I think better management (hello to all my ex-Vale colleagues who read this each week.)
Ardent Leisure (ALG) which owns Dreamworld and Main Event bowling alleys/laser tag etc. is down 70% and might offer some value as borders reopen internationally. I don't think the Gold Coast is losing its international appeal.. but probably just not for me.
Most of the other stuff that's negative 50% or more looks structurally challenged to me. Outdoor media over-supplied (OML), SWM and SXL are dinosaurs, Evans Dixon (ED1) about to get flipped over by ASIC.
Or they are just dogs (PET, FAR, PGL, CBR etc.)
|
|
Checking on our banks trade
Short CBA (black)... long the other three (NAB, WBC, ANZ) is playing out beautifully. 4%-8% outperformance over past 30 days.
|
|
SMA Update - Peer Comparison
I checked out all the ASX 200-benchmarked, comparable funds in the Lonsec Database during the week. There is 45 of them. Represented are funds from Macquarie, MLC, Yarra, Airlie, Paradice, L1 etc.
I compared the 3 month returns of the Seneca Australian Shares SMA vs this peer group. And yes, I know these are only 3 month returns... but we've only been running our SMA for 3 months so that's all I can score... we are ranked 4th.
Hopefully it stays that way (or we go to #1...) As you know, no guarantees, past performance isnt a predictor of future performance and all that.
|
|
In the media
I put up three stocks for the fashion-people over at D'MARGE during the week. If you want to check that out...
OUR EXPERT’S SCOOP ON THE BEST AUSTRALIAN SHARES TO BUY RIGHT NOW
|
|
Fund Manager Interview
I'm not sure if my family/private clients realise that we also work with other investment firms, the fund managers who you might invest with or see online (or on business televison... but lets face it, who actually watches that garbage?)
We help them execute their trades, get them access to company management and industry experts, provide them with bespoke investment research and trading ideas.
One of our clients (and friends) is Tom Lambeth from VP Capital. I like talking to Tom as he's much more open-minded than I am. He knows how to make money a number of different ways and is happy to pull any of the various tools in his tool kit out if he thinks he can add value for his investors. (I am pretty much am just a one/handful of tricks pony.)
Anyway, we caught up for a chat on Microsoft Teams, talked a bit of stocks (JIN, MAH, TRS), a bit of market and a bit about VP Capital. This was filmed like 2 weeks ago so Tom doing really well on JIN (+15%) so far.
If you're looking for a opportunistic hedge fund exposure in your portfolio, someone who's going to jump on all the pre-IPO's and IPO's for you, get allocations you'll never get and likely, trade them better than you ever will, drop me a line and I can give you some more info, get you in front of the team and perhaps put some money to work with the VP team.
(excuse my horrible interviewing... I know I'm no Ray Martin)
|
|
Movers & Shakers
Bit of a mixed bag on the positives this week. SkyCity earnings didn't decline as much as the market thought they might, we talked about property already (LLC, DXS). Interesting to see the big move in Sydney Airport (SYD) and Transurban (TCL), perhaps benefiting from APA's miss? Ag stocks doing well (CGC, BGA) with pretty good growing conditions around the country (well, at least thats what my farming clients tell me). Contractors/building mats also up on that recovery theme (ABC, WOR, CSR, SSM).
|
|
|
Quality and growth sold off after strong performance lately. IFL a dog (...but not if they want to acquire my business for 10x revenue haha)
|
|
|
Still plenty going on in terms of ex-divs.
|
|
|
Anyone interested in these short reports? If you want me to keep doing them email me.
|
|
My main man Nic Naitanui is being rested this weekend against the Dogs so I've got my reservations in tipping the Eagles, but like my investment strategy, I'm heavily biased and will undoubtedly tip them. Interesting morning of NBA basketball with upset victories from the Miami Heat and Houston Rockets. Boston should get back on track tomorrow against Toronto and don't be surprised if the Nuggets get a game back off the LA Clippers.
And due to popular demand, I'll be posting my $5.00 lockdown weekend multi until Kim Jong Andrews let me do something other than watch sport on TV and work:
- West Coast by under 40
- Fremantle to beat Melbourne
- and then the 4 NBA games (Boston, Denver, Miami & LA Lakers)
Paying off potential $291.41
Likely payoff $0.00
Track record: Poor to very poor (no wins yet)
|
|
Luke Laretive
CEO & Investment Adviser
T +61 3 8639 1601 | M 0451 122 656 | lukel@senecafs.com.au
Level 2 Professional Chambers
120 Collins Street Melbourne VIC 3000
AFSL No. 492686 |
|
|
|
Notice to Recipients
This email has been sent by Seneca Financial Solutions Pty Ltd, ABN 17 610 665 711. This message is subject to terms available in the provided link. If you are unable to access this link, please let us know by return email and we will send you its contents.
Important information
This email is solely for the use of the addressee and may contain information which is confidential. If you are not the intended recipient please forward this email to lukel@senecafs.com.au and delete the original.
The information contained in this email is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Although every effort has been made to verify the accuracy of the information contained in this email, all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this email or any loss or damage suffered by any person directly or indirectly through relying on this information. |
|
|
|
|
