August Reports: Winners And Losers

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            [0] => ((ANZ))
            [1] => ((JBH))
            [2] => ((UGL))
            [3] => ((WBC))
            [4] => ((JHX))
            [5] => ((MAP))
            [6] => ((CBA))
            [7] => ((FMG))
            [8] => ((SUN))
            [9] => ((ORG))
            [10] => ((NWS))
            [11] => ((SXL))
            [12] => ((MYR))
            [13] => ((CCL))
            [14] => ((TCL))
            [15] => ((LEI))
            [16] => ((BXB))
            [17] => ((CGF))
            [18] => ((CTX))
            [19] => ((SKI))
            [20] => ((SHL))
            [21] => ((FXJ))
            [22] => ((AXA))
            [23] => ((CPU))
            [24] => ((TLS))
            [25] => ((PRY))
            [26] => ((AMP))
            [27] => ((CQO))
            [28] => ((DOW))
            [29] => ((BBG))
            [30] => ((BLY))
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            [2] => UGL
            [3] => WBC
            [4] => JHX
            [5] => MAP
            [6] => CBA
            [7] => FMG
            [8] => SUN
            [9] => ORG
            [10] => NWS
            [11] => SXL
            [12] => MYR
            [13] => CCL
            [14] => TCL
            [15] => LEI
            [16] => BXB
            [17] => CGF
            [18] => CTX
            [19] => SKI
            [20] => SHL
            [21] => FXJ
            [22] => AXA
            [23] => CPU
            [24] => TLS
            [25] => PRY
            [26] => AMP
            [27] => CQO
            [28] => DOW
            [29] => BBG
            [30] => BLY
        )

)

This story features ANZ GROUP HOLDINGS LIMITED, and other companies.
For more info SHARE ANALYSIS: ANZ
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

By Rudi Filapek-Vandyck

The August corporate reporting season has triggered a review of Macquarie's recommended portfolio with changes made through the additions of ANZ Bank ((ANZ)), JB Hi-Fi ((JBH)) and UGL ((UGL)), while Westpac ((WBC)) and James Hardie ((JHX)) both lost their spot.

For those not sure about the “why” behind these changes; recent analysis has shown that each reporting season selects winners and losers and Mr Market makes up its mind about which stocks belongs in what category on the basis of positive and negative surprises. Macquarie has simply applied the same logic to its portfolio changes.

Investors should also note that Macquarie has turned a little more positive on resources stocks, this on the basis that Chinese growth is expected to flatten out in the months ahead which effectively means there will be a bottom and this implies there will no longer be a negative trend.

Analysts at RBS Australia made some changes post the August reporting season too, but they took a slightly different approach. Macquarie Airports ((MAP)) was removed from the stockbroker's High Conviction Buy list because the stock already outperformed by so much since releasing another formidable interim result this month.

On the other hand, CommBank ((CBA)) has now been added as a High Conviction Sell because RBS believes CBA will find it increasingly difficult to grow its profits in both FY11 and FY12. CBA is the only one that is a Sell with Conviction.

Have remained on the High Conviction Buy list are Fortescue ((FMG)), Suncorp-Metway ((SUN)), Origin Energy ((ORG)), News Corp ((NWS)), Southern Cross Media ((SXL)) and Myer ((MYR)).

Close observers of the August reporting season would have noticed not all of these Buy with Conviction listed names managed to surprise in a positive manner this month. Origin didn't, and neither did Southern Cross Media.

Additional commentary by RBS suggests Origin is on the list because of anticipated further consolidation in the Australian gas sector, while Southern Cross Media shares are seen as well-undervalued.

The term “PE rerating” was also used in connection with retailer Myer.

Quant analysts at JP Morgan have conducted some analysis on the reporting season surprise-theme and come up with the conclusion that, on the basis of delivered surprise results in August, the following stocks should be considered Overweight:

Coca-Cola Amatil ((CCL)), Transurban ((TCL)), Leighton Holdings ((LEI)), UGL, Brambles ((BXB)), Challenger Financial ((CGF)), Caltex ((CTX)), Spark Infrastructure ((SKI)), Sonic Healthcare ((SHL)), Suncorp-Metway, and Fairfax Media ((FXJ)).

On the other hand, the following companies genuinely surprised in a negative sense and they should thus underperform in the months ahead: AXA Asia-Pacific ((AXA)), Computershare ((CPU)), Telstra ((TLS)), Primary Healthcare ((PRY)), AMP ((AMP)), Charter Hall Office ((CQO)), Downer EDI ((DOW)), Billabong ((BBG)) and Boart Longyear ((BLY)).

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