Rudi’s View: Reliance Worldwide, ResMed, And Equity Trustees

This story features CORPORATE TRAVEL MANAGEMENT LIMITED, and other companies. For more info SHARE ANALYSIS: CTD

In this week's Weekly Insights (this is Part Two):

-Autumn Has Arrived, Plus Seven Quotes
-ESG Focus Should Be Yours Too
-Conviction Calls
-Bond Yields & Decelerating Growth
–Rudi On TV
-Rudi On Tour

[Non-highlighted parts appeared in Part One on Thursday]

Conviction Calls

By Rudi Filapek-Vandyck, Editor FNArena

Amidst plenty of share market commentary and controversy, portfolio managers at stockbroker Morgans have stuck by Corporate Travel ((CTD)), telling clientele they're are satisfied with management's response to short seller VGI, believing share price weakness might stick around for a while but it doesn't appear to be justified.

In addition, Morgans' Balanced Model Portfolio has added exposure to Sydney Airport ((SYD)) while also reporting a watchlist is being kept with specific focus on major banks, ResMed ((RMD)), Reliance Worldwide ((RWC)) -to buy some more- PWR Holdings ((PWH)), Ramsay Health Care ((RHC)) -with possible intention to sell- and Motorcycle Holdings ((MTO)). The latter is considered "too cheap to sell".

Those responsible for managing the stockbroker's Growth Model Portfolio have been left licking their wounds, as the portfolio includes Corporate Travel and Motorcycle Holdings, but portfolio managers see "compelling value" emerging in lots of places now that the share market experiences melt downs regularly.

For now, the portfolio has added shares in Oil Search ((OSH)) and OZ Minerals ((OZL)), while trimming its position in People Infrastructure ((PPE)). Here the watchlist consists of ResMed, Reliance Worldwide, PWR Holdings, and Motorcycle Holdings.

In terms of yield plays, Morgans' favoured exposures remain Viva Energy REIT ((VVR)) and Centuria Metropolitan REIT ((CMA)) and, in case large cap exposure is a requirement, Stockland Group ((SGP)) and Mirvac Group ((MGR)).

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Stock pickers at Wilsons have brushed off and updated their selective list of Conviction Calls which triggered the removal of Afterpay Touch ((APT)) and also the fresh inclusions of Equity Trustees ((EQT)) and GWA Group ((GWA)).

Keeping their spot on the list: Bravura Solutions ((BVS)), ARQ Group ((ARQ)), Collins Foods ((CKF)), Ruralco ((RHL)), Ridley Corp ((RIC)), Nanosonics ((NAN)), ImpediMed ((IPD)), Pinnacle Investment ((PNI)), Noni B ((NBL)), Ausdrill ((ASL)), Mastermyne ((MYE)), and NRW Holdings ((NWH)).

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Analysts at Morningstar also updated their "Best Stock Ideas"; ideas picked because, on their assessment, share prices are below fair value and thus too cheap. Four changes were made: Link Administration ((LNK)) and Macquarie Group ((MQG)) are now included, while MYOB Group ((MYO)) and Ramsay Health Care ((RHC)) lost their spot.

Remaining on the list: a2 Milk ((A2M)), Aveo Group ((AOG)), G8 Education ((GEM)), InvoCare ((IVC)), Pendal Group ((PDL)), Telstra ((TLS)), Westpac ((WBC)), and Woodside Petroleum ((WPL)).

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Stockbroker Morgans also updated its selection of High Conviction Stocks last week which saw the removal of Noni B, alongside the inclusion of ResMed and Lovisa Holdings ((LOV)).

Retaining their spot on the list: OZ Minerals, Reliance Worldwide, Westpac, PWR Holdings, Volpara Health Technologies ((VHT)), Kina Securities ((KSL)), CML Group ((CGR)), and Australian Finance Group ((AFG)).

Bond Yields & Decelerating Growth

The global sell-off in equities is no longer about readjusting to higher rates and higher bond yields, as was the case earlier in the year; this time around the world is increasingly uncomfortable with the prospect of decelerating growth into 2019.

The chart that illustrates (almost perfectly) the worries that have seeped into global investors' minds was taken from a recent edition from The Gartman Letter, though it probably originates from a report issued by Credit Suisse.

Rudi On TV

My weekly appearance on Your Money (the channel formerly known as Sky News Business) is now on Mondays, 1-2pm.

Rudi On Tour

-ASA Parramatta, on November 14, 5.30-7pm

Rudi On Tour In 2019

-ASA Inner West chapter, Concord, Sydney, March 12
-ASA Sydney Investor Hour, March 21
-ASA Toowoomba, Qld, May 20
-U3A Investor Group Toowoomba, Qld, May 22

(This story was written on Tuesday 12th November 2018. It was published on the Tuesday in the form of an email to paying subscribers at FNArena, and again on Thursday as a story on the website. Part Two will be published on the website on Friday morning).

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views are mine and not by association FNArena's – see disclaimer on the website.

In addition, since FNArena runs a Model Portfolio based upon my research on All-Weather Performers it is more than likely that stocks mentioned are included in this Model Portfolio. For all questions about this: info@fnarena.com or via the direct messaging system on the website).

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(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.) 

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

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