article 3 months old

Rudi’s View: All About Corporate Profits – The Charts

rudi-views
Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Jun 22 2017

By Rudi Filapek-Vandyck, Editor FNArena

As promised in Weekly Insights on Monday (see "All About Corporate Profits, Or Is It?"), below follows a collection of graphs and charts that could have accompanied my written assessment, but for technical reasons we publish a collection in the form of a separate story today.

The following images should be viewed/interpreted in conjunction with the written story published on Monday (on the website on Wednesday morning).

Morgan Stanley's leading indicator for US corporate profit growth:

Morgan Stanley's proprietary model for intrinsic value for S&P500:

US 10-year Government Bond Yield 2012-2017:

Earnings Per Share (EPS) expectations for the ASX200, as registered by Shaw and Partners:

Earnings Per Share (EPS) expectations for the ASX200, as registered by Shaw and Partners, from a different angle:

And finally, what is wrong in the following picture? While corporate profits are growing as a percentage of Australian GDP, the share of Australian's income has fallen to its lowest level since 1964 (thanks UBS).

(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.)  

P.S. – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Share on FacebookTweet about this on TwitterShare on LinkedIn

Click to view our Glossary of Financial Terms