Rudi's View | 4:27 PM
In today's edition:
-FNArena's August Results Monitor
-What The Experts Are Saying
-Review All-Weather Model Portfolio
-Best Buys & Conviction Calls
By Rudi Filapek-Vandyck
FNArena's August Results Monitor
The Australian corporate results season has officially started but, as per unofficial tradition, the pace of corporate releases remains rather glacial this early in the month.
By this time next week, the numbers will be a lot larger, as the bulk for local seasons is reserved for the final two weeks of the month.
FNArena is keeping a close watch daily: https://fnarena.com/index.php/reporting_season/
What The Experts Are Saying
An observation from UBS:
"After a multi-year period of underperformance, gold equities (GDX Index) have outperformed the gold price by >40% YTD.
"In particular, the last three months have been very strong for equities, despite a largely rangebound gold price. However, this has largely been an international phenomenon, with Australian gold stocks lagging quite materially.
"Gold miners have had a poor track record in recent years resulting in valuation de-rating; but recent results were a net positive for the global gold miners, with the stocks generally delivering record Free Cash Flow, 2025 production/ cost guidance generally maintained (despite higher royalties), management teams demonstrating discipline with limited increases in capex & increasing cash returns."
UBS's preferred sector exposures are Barrick Mining, Endeavour, Kinross, AngloGold, & Franco-Nevada. None are listed locally.
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This month's update on Morningstar's Best Stock Ideas in Australia has seen the removal oif IGO Ltd ((IGO)) from the list and the inclusion of Pilbara Minerals ((PLS)).
Among the many discussions whether the return of positive momentum for lithium prices and share prices of linked exposures might prove justified, and sustainable, or not, Morningstar simply sees the market taking a more optimistic stance.
Lithium demand is expected to triple by 2023 from levels registered in 2023 and Pilbara has mine reserves spanning twenty years, and more.
IGO Ltd also has exposure to lithium, of course, but the preference has been switched to Pilbara.
Morningstar's selection of Best Stock Ideas (Conviction Buy Calls by any other name, mostly chosen because of under-valuation):
-Auckland International Airport ((AIA))
-ASX Ltd ((ASX))
-Aurizon Holdings ((AZJ))
-Bapcor ((BAP))
-Dexus ((DXS))
-Domino's Pizza Enterprises ((DMP))
-Endeavour Group ((EDV))
-Fineos Corp ((FCL))
-IDP Education ((IEL))
-Pilbara Minerals
-Ramsay Health Care ((RHC))
-SiteMinder ((SDR))
-Spark New Zealand ((SPK))
-Woodside Energy ((WDS))
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Equally noteworthy: we couldn't help but noticing the Conviction Buy list at Goldman Sachs specifically for ASX-listed exposures is now down to three and with Unibail-Rodamco-Westfield ((URW)) about to disappear from the local bourse, will that be two remnants only by month's end?
-Goodman Group ((GMG))
-ResMed ((RMD))
-Unibail-Rodamco-Westfield
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