Five Defensive Stocks To Consider If The Rout Continues
As you know. MM is short-term bullish the ASX200 while being overall concerned around what comes next in 2019 /2020.
When we stand back and look at the ASX200 Accumulation Index (including dividends) the current pullback remains relatively small compared to what’s been experienced over the last decade, in other words investors should not be surprised to see stocks a lot lower in the next 1-2 years.
ASX200 Accumulation Index Chart
1 Ramsay Healthcare (ASX: RHC) $55.89
Over the last 3-months the ASX200 has fallen 9% while Ramsay Healthcare (ASX: RHC) is up 1.8% - MM has owned RHC for almost 6-months from around current levels. However much of the Healthcare Sector like heavyweights Cochlear and CSL are down by over 20%, which is a clear alarm bell for RHC moving forward. We believe RHC has outperformed the market by over 10% recently, primarily because it had already declined almost 40% from its early 2016 high, not because it’s a prime defensive candidate. Ramsay Healthcare (ASX: RHC) Chart
2 Newcrest Mining (ASX: NCM) $20.73
NCM is up over 9% over the last 3-months, enjoying a strong performance by much of the gold sector e.g. Evolution Mining (ASX: EVN) +12.7% and St Barbara (ASX: SBM) +14.1%. In other words many of the quality gold names have outperformed the market by around 20% in recent months. Newcrest Mining (ASX: NCM) Chart
3 Charter Hall Retail (ASX: CQR) $4.55
CQR is up +6.3% over the last 3-months enjoying the tough market times like over 30% of the real estate sector – some good stock selection has been required. Charter Hall Retail (ASX: CQR) Chart
4 Vocus (ASX: VOC) $3.49
VOC is up almost 18% over the last 3-months while sector bell weather Telstra is unchanged even after trading ex-dividend 11c fully franked at the end of August. Vocus (ASX: VOC) Chart
5 Bearish ETF’s
Long bearish ETF’s has clearly been a winner since August as they are inversely correlated to the underlying ASX200. BetaShares Bear ETF (ASX: BEAR) Chart
Continue reading below to see our actionable ideas on these five names
