25 March 19
Subscribers questions (BBOZ, HUB, PPS, ECX)
25 March 19
Subscribers questions (BBOZ, HUB, PPS, ECX)
24 March 19
Market Matters Weekend Report Sunday 24th March 2019
22 March 19
Some of the ‘dogs’ starting to run (PMV, SGM)
22 March 19
Are there opportunities after the huge macro news of the last 24-hours (EHE, PGH, TLS, SYD, QBE, CBA)
21 March 19
Employment remains strong, although analysts not convinced (PGH, ECX)
21 March 19
Do we catch any of these the falling knives? (HLS, BIN, ECX, PTM, NUF, ELD, GEM,
20 March 19
ASX peppered with landmines today (NUF, FMG, ECX, PTM)
20 March 19
Income Report: A look at high yielding stocks
20 March 19
Overseas Wednesday is back on time! (CTX, FMG, AMZN US, C US, MSFT US, DIS US, FB US)
19 March 19
China snubs Aussie Coal (FMG, NHC, WBC, CTX, WTC, HSO)
The ASX200 failed to embrace an extremely positive lead from overseas indices closing marginally down on the day even after opening up +0.7% following the S&P500’s +1.5% gain in the US. Conversely the rest of Asia continued with its strong week rallying on average of ~1.5%, in just a few days the Australian market appears to have been unceremoniously shoved from its position of a favoured index into the “naughty corner”. Under the hood the financials remained firm while insurance, gold and retail had a tough day at the office but nothing particularly dramatic.
Its impossible to know what has been the catalyst for our markets last few days soft underbelly but perhaps the recent two capital raisings mentioned yesterday was enough to satisfy the last remnants of the panic buying since December. Street Talk reporting this morning that Z1P Co (Z1P) is the next to tap shareholders today.
Local economic data has also been poor recently and Mays federal election gets ever closer creating doubt in many investors’ minds – “if in doubt do nought!”. However the $A remains close to 71c, basically unchanged since late 2018, implying to me it’s not an economic issue at this stage.
The local futures (taking dividends into account) have corrected less than 2% over the last 4 trading days, hardly a dent in the 17.8% advance from late December. Lets stand back and consider some typical statistics as the upside momentum slowly wanes:
1 – If the markets correcting the whole advance from its December low the typical targets would be 5916 and 5804 i.e. implying a lot further to go.
2 – If the market at least matches the early January pullback of 163-points we have another ~1% to go.
3 – A break of March’s 6150 low implies strongly that 6278 is a decent point of inflection and we are likely to fall for a few more weeks into April.
Hence overall we feel comfortable (a dangerous word when investing) with our large 29% cash position in our flagship Platinum Portfolio looking for select buying opportunities into weakness.
MM remains neutral the ASX200 after its strong rally from late December lows but we are not afraid to buy selective stocks.
Overnight US markets closed mixed with the Dow down -0.4% dragged lower by Boeing whereas the hot tech based NASDAQ rallied over +0.5%. The SPI futures are calling our market to open marginally lower with BHP unchanged in the US.
Today we are going to look at a few buys and sells MM is watching closely as the market, but not all stocks, drifts lower.
ASX200 March SPI Futures Chart
I was just looking over the best performing stocks for the last 3-months and 2 jumped out at me – IOOF Holdings (IFL) +51% and Bellamy’s (BAL) +37%.
The point is when significantly out of favour stocks (“dogs” as we have often referred to them) snap back there is a dearth of sellers and upside momentum can be stunning.
MM continues to evaluate a few “dogs” which are approaching our “buy zone”.
Bellamy’s & IOOF Holdings IFL) Chart
This morning AEST the BREXIT saga continued with optimism for a positive vote yesterday during our daytime turning to reality when Parliament again gave the thumbs down to Theresa May’s proposal – I really feel sorry for her, she was anti-BREXIT in the first place and now she’s trying to put the pieces together after the leave campaigners like Messer’s, Farage and Johnson are nowhere to be seen.
The British Pound gave back its early gains leading to the FTSE being the best of a bad bunch closing up +0.3% - many UK stocks benefit from a weaker domestic currency.
The longer this story takes to unfold the more chance of a second referendum where a remain vote is a strong possibility which would clearly be short-term beneficial to UK exposed businesses. However there are many moving parts in this tale none of which are certain with politicians primarily steering the ship.
British Pound v $US (GBPUSD) Chart
The tech based NASDAQ rallied another +0.5% last night in the process making fresh highs for 2019 but I would not be chasing this strength as the overall momentum slowly wanes, we believe the next ~4% is down.
We would continue to avoid stocks that are highly correlated to the US at this point in time e.g. Macquarie Bank (MQG) & the growth sector.
US NASDAQ Chart
No change, European indices are encountering some selling from our targeted “sell zones”, we remain cautious or even bearish the region at this stage.
Increasing our equities exposure moving forward may be accompanied by purchasing a negative facing ETF.
UK FTSE Chart
Stocks MM are considering both buying & selling
Yesterday we saw the ASX200 fall even after the Dow rallied 200-points implying that at least some degree of weakness was upon us – our preferred scenario is a few percent lower into early April for a buying opportunity.
Hence MM is keeping our finger firmly on the pulse as we hold almost 1/3 of the MM Platinum Portfolio in cash.
1 Star Entertainment (SGR) $4.37
We have been targeting a test close to $4 for SGR ever since we took profit on our previous holding in 2017 – as it turned out, a really good exit point.
A few of my colleagues are actually going to SGR for lunch today, it will be interesting to hear back on how the place feels, I cannot remember the last time I was there, probably pre-kids.
MM continues to like SGR into fresh 2019 lows i.e. only 3-4% away.
Star Entertainment (SGR) Chart
2 Aristocrat Leisure (ALL) $23.14
This previous hot stock has endured a tough year falling close to 40% from its 2018 high primarily on P/E contraction i.e. investors are not prepared to pay as much for its growth, similar to what we saw with CSL Ltd (CSL) and Cochlear (COH).
The gaming technology business is now trading on a relatively conservative Est. P/E of 17.2x for 2019 following a disappointing result from a US competitor but ALL is expected to grow earnings by 17% this year i.e. solid growth on an undemanding multiple , assuming of course that they deliver. The last trading update from the business last month at its AGM stated the company is on track to deliver its targets for growth in 2019 with digital a key driver.
There is another wild card in the pack with a few regulatory concerns around gambling since the U.S. Justice Department said internet gambling was illegal – not a specific area of concern for ALL.
MM is considering averaging our holding into weakness below $23.
NB We are wary of ALL”s $US exposure hence this might be a relatively short-term foray.
Aristocrat Leisure (ALL) Chart
3 AMP Ltd (AMP) $2.30
I certainly feel like I’m on an island looking at AMP but I showed the turnaround by IFL earlier i.e. never say never.
The stock carries a relatively large short position above 7% but the valuation based on its Est P/E for 2019 of 11.5x is not too exciting although the ~6% fully franked yield would be if they can maintain it. I can see AMP trading above $3 in 2019 /20 which would be a huge bounce but not its first over recent years.
MM is considering a small 2% “dog” investment in AMP.
AMP Ltd (AMP) Chart
4 Appen Ltd (APX)
Following its well-timed capital raising APX has corrected over 14% potentially giving us the opportunity we have been waiting for to buy back into the Artificial Intelligence business (AI).
MM is considering starting to accumulate APX under $22 and we would average below $20.
Appen (APX) Chart
5 Emeco Holdings (EHL) $1.995
We have been watching the leaser of earthmoving equipment to the mining industry for most of 2019 and our buy area is approaching in this relatively volatile stock. Its cheap (Est P/E for 2019 of 9.3x) and around our $1.80 target area it will on paper represent solid value.
MM still likes EHL around the $1.80 area.
Emeco Holdings (EHL) Chart
6 Lend Lease (LLC) $12.42
Lend Lease (LLC) has enjoyed a decent bounce including a strong push above $14 following an upgrade by influential broker UBS but we felt they may have fired a touch early. While the company appears to have cleared its decks of “bad news” we question if that’s enough to send the stock higher when property continues to struggle, however if they were successful in getting rid of their engineering division I believe the market would love it.
MM is interested in LLC on another leg down below $11, which is not far with this volatile beast!
Lend Lease (LLC) Chart
7 Janus Henderson (JHG) $34.81
Janus Henderson (JHG) has been on the BREXIT rollercoaster as well as having to deal with a retiring CEO and struggling funds under management (FUM). However the recent 30% recovery illustrates the stock had become simply too negative. Today’s Est P/E of 9.8x and yield above 5% unfranked is still attractive and this stock could (theoretically) enjoy a value bid.
We are still bullish JHG targeting fresh 2019 highs but once these have been achieved we can raise our stops to just under $35 and we can then see how the stocks plays out from there.
We remain bullish JHG but stops may be raised this month.
Janus Henderson (JHG) Chart
8 QBE Insurance (QBE) $12.31
QBE Insurance (QBE) has been a serial underperformer as most of us know but like JHG is it has rallied ~30% in 2019. MM is concerned with QBE moving forward because of our bullish outlook for the $US which will represent a headwind for earnings when they are translated back to $A.
We are looking to exit QBE around the $13 region.
QBE Insurance (QBE) Chart
MM has a number of stocks on our “buy radar” including a few more not mentioned above that we have covered recently i.e. Elders (ELD), Healius (HLS), IAG Insurance (IAG) and Nufarm (NUF).
Star Entertainment (SGR) ~$4.10, Aristocrat (ALL) under $23, AMP into weakness towards $2, Appen (APX) under $22 -$20, Lend Lease (LLC) below $11 and Emeco Holdings (EHL) around $1.80.
Janus Henderson (JHG) stops up to $34.90 if / when we make fresh highs above $35.20 and QBE Insurance (QBE) around $13.
Overnight Market Matters Wrap
· The SPI is down 9 points as Boeing once again dragged on the Dow, which closed down 0.4%. The S&P 500 and NASDAQ closed 0.3% and 0.4% in the black.
· Crude oil jumped 1.25% to US $56.77/bbl. as Saudi Arabia extended its bigger than agreed production cuts into its second month. All metals on the LME were higher, with aluminium and nickel up more than 1.5%
· British PM May tweaked her Brexit proposal but once again was heavily defeated in a parliamentary vote. Next up is a vote to rule out leaving Europe with no deal in place.
· Back to the US and data showed that inflation remains in check, giving market participants confidence that the Fed can hold off on rate rises for now. Meanwhile US-China trade negotiations continued with contact between lead negotiators.
· The March SPI Futures is indicating the ASX 200 to ease on the open, futures showing a 10 point slide towards the 6164 level this morning.
Have a great day!
James & the Market Matters Team
Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.
All figures contained from sources believed to be accurate. Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. Prices as at 13/03/2019
Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The MarketMatters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.
The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor. Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product.
The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports. Market Matters may publish content sourced from external content providers.
If you rely on a Report, you do so at your own risk. Past performance is not an indication of future performance. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.
Financial Services Guide
Date prepared: Wednesday, 22 November 2017
Last update: Tuesday, 6th November 2018
About this Financial Services Guide (FSG)
This FSG provides you with key information about a range of subscription services offered by:
Marketmatters Pty Ltd (Market Matters) Australian Financial Services Licence No. 488798 ABN (20 137 462 536)
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
T: 1300 301 868
E: [email protected]
In this FSG, “we”, us” and “our” refer to Market Matters.
Market Matters holds Australian Financial Services Licence No. 488798 (AFSL) and is responsible for any financial services that we provide to you.
This AFSL was issued on 8th September 2016.
The purpose of this FSG is to provide you with information about:
Market Matters operates a website, www.marketmatters.com.au (Website), where customers may, for the payment of a subscription fee, access certain financial information and general advice. In particular, the Website provides:
This FSG relates only to the Website Services.
What financial services we can offer in connection with the Website Services
As holder of AFSL number 488798, in connection with the Website Services we are authorised to provide general financial product advice to both retail and wholesale clients in relation to the following financial products:
The Website Services are comprised of general advice only. That is, none of the advice given on the Website or by provision of the Website Services takes into account any of your objectives, financial situation or needs (Your Personal Circumstances). Before acting on any of the information, advice or Website Services, you must consider the appropriateness of this information in light of Your Personal Circumstances and, if necessary, consult a financial adviser before making any investment decision.
If you are seeking to acquire a specific financial product or security, you should obtain a copy of and consider the Product Disclosure Statement or Prospectus for that product before making any investment decision.
The Website does not provide a trading platform or access to a trading platform. There is no ability to purchase or sell financial products through the Website.
How do I access these services?
You can access these services by going to www.marketmatters.com.au and following the prompts and steps required to sign up for membership. Please read all terms and conditions carefully.
Fees and benefits payable to us and our associates
The Website is a subscription-based service. A monthly fixed subscription fee is payable to Market Matters when you subscribe to the Website which will vary depending on the type of subscription for which you subscribe. At the date of this FSG, the monthly subscription fees are as follows:
Current subscription fees from time to time are provided on the Website.
The Website does not currently feature third party advertising. Market Matters reserve the right to advertise at a future time for which they may receive remuneration. Any such advertising will be independent of any other content on the Website.
All representatives of Market Matters (Market Matters Staff) receive a salary paid by Market Matters. Market Matters Staff may also receive performance-based bonuses which are based on profitability, the number of subscribers and subscription renewal rates.
How do we manage potential conflicts of interest?
Market Matters have implemented policies and procedures to mitigate the risk of conflicts of interest. These include:
Market Matters Staff are encouraged to express independent views and opinions on the topics they write about. This is established through ongoing training, external audits and our conflict of interest and staff trading policies. Market Matters Staff are required to serve the best interests of the subscribers, without consideration of any commercial or personal interests.
How is my personal information dealt with?
If you have a complaint about our services, you should take the following steps:
Contact us and discuss the complaint directly. If you do not feel comfortable discussing the complaint with us or your complaint is not satisfactorily resolved within 2 business days, please telephone Market Matters, on 1300 301 868 and ask to speak with the Complaints Officer. We suggest you put your complaint in writing at this time so that the issues are fully documented and understood by the parties. Your complaint should be addressed to:
The Complaints Officer
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
Market Matters will review your complaint within 45 days and attempt resolution. If you are still not satisfied with the outcome, you may take your complaint to an external dispute resolution scheme. Market Matters is a member of the scheme operated by the Financial Ombudsman Service. You should write to:
Australian Financial Complaints Authority Limited
GPO Box 3
Melbourne Vic 3001
Phone 1800 931 678.
You may also wish to consult ASIC in relation to your complaint. ASIC’s website contains information on complaining about companies and people and describes the types of complaints handled by ASIC. You can contact ASIC on its free call infoline:
Tel: 1300 300 630 or email [email protected]
We maintain professional indemnity insurance to cover our employees and Authorised Representatives (including us) for the financial services they provide, having regard to the following:
If you require further information about these compensation arrangements please contact us.
Terms and Conditions
This website, www.marketmatters.com.au, is published by Marketmatters Pty Limited (ABN 20 137 462 536) ('Market Matters', 'MM', 'us', 'we', 'our') Australian Financial Services Licence 488798
Financial Services Guide
Market Matters Financial Services Guide (FSG) is located here, and contains important information about the financial services provided by Market Matters. You must read our FSG and consider it in the context of your Personal Circumstances before acting on any advice. By accepting the terms and conditions you are acknowledging that you have read the FSG.
Provision of the Reports
Reports and other documents published on the Market Matter’s website (‘Reports’) are authored by Market Matters. The Reports represent the views of Market Matters based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.
The Reports contain general, as opposed to personal advice. That means they are prepared for multiple distribution without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor.
The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports.
If you rely on a Report, you do so at your own risk. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.
Past performance is not a reliable indicator of future results. Brokerage costs have not been included in the calculation of performance. As financial products rise and fall in value, returns may be negative. Performance figures are not intended to be a forecast. Market Matters does not guarantee the performance of or returns on any investment.
Employees and/or associates of Market Matters may hold one or more of the stocks reviewed on this website.
Subscriptions and Subscription Prices
To access premium content available on the Market Matters website you must subscribe to one or more membership categories available on the website.
To subscribe to the Market Matters website you must go to the Memberships page of the website, provide the information marked as ‘Mandatory’ and select the payment option for the price quoted (at the time of your transaction). You will then receive a verification email from Market Matters indicating that your subscription and payment have been accepted and you will be able to access the premium content.
Prices published on the Market Matters website are quoted in Australian Dollars (AUD) and are inclusive of GST and/or all other duties and taxes. Market Matters has used reasonable endeavours to ensure that prices for subscription to its services are published accurately on the website but these prices are subject to change and Market Matters reserves the right to change these prices and will notify you of any increase by email (with the price increase to apply from the time the next payment is due).
Marketmatters Pty Ltd (ABN 20 137 462 536) will issue a tax invoice to paying subscribers in relation to any supply that is subject to GST in accordance with A New Tax System (Goods and Services Tax) Act 1999.
Any member is entitled to cancel their membership at any time. In the event a member does wish to cancel their subscription, cancellations must be notified in writing to:
Level 29, Chifley Tower, 2 Chifley Square, Sydney NSW 2000
or by email to: [email protected]
All cancellations of month-by-month subscriptions will be cancelled and not billed again the next month.
All cancellations within 14 days we be entitled to a full refund. Any introductory gifts, such as iPads, must be returned in their original condition before a refund will be made.
All cancellations made after 14 days of subscription commencement will not be entitled to a refund unless in the event of extenuating circumstances, at the sole discretion of Market Matters.
Subscriptions will automatically renew on the expiry date of current subscription. In these instances the subscription will be renewed at the current rate published on the Market Matters web site, using the same credit card that paid for the initial subscription, unless otherwise requested by the subscriber. A subscriber who wishes to cancel after being renewed in this way will have a “14 day cooling off period” in which they can request to discontinue and will receive a full refund for the renewal payment, this can be done in writing to:
Level 29, Chifley Tower, 2 Chifely Square Sydney 2000
or by email to: [email protected]
Market Matters has not reviewed any of the websites which link to this website or to which this website links. Market Matters is not responsible for the content of any other website or pages linked to or linking to its website. Following links to any other websites or pages shall be at the user’s own risk.
Copyright © 2013 Marketmatters Pty Ltd (ABN 20 137 462 536). No part of this website, or its content, may be reproduced in any form without the prior consent of Market Matters.
This Agreement is governed by and is to be construed in accordance with the laws of New South Wales, Australia. You agree to the non-exclusive jurisdiction of the courts of New South Wales, Australia in respect of any proceedings concerning this Agreement. This website is not available to US persons and by accepting these terms you confirm that you are not a US person.