Rudi’s View: RBA Dilemma Between Tight Labour And Debt

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 | Feb 15 2018

In this week's Weekly Insights (this is part two):

-Panic Not Invited
-Buy Restructuring Stories
-Conviction Calls: Wilsons, Macquarie, FNArena's Sentiment Indicator
-RBA Dilemma Between Tight Labour And Debt
-The Next Index Rebalancing

[Note the non-highlighted items appeared in part one on the website on Wednesday]

By Rudi Filapek-Vandyck, Editor FNArena

Buy Restructuring Stories

Things might still be looking bright and upbeat, from an economic point of view, but each cyclical upswing shall be followed by darker times, and who knows, Australia might have another recession in the next few years ahead, as it has been such a long time since the last one.

In Credit Suisse's view, this might be a good time to start zooming in on those companies that are actively restructuring. Leaner businesses will be better positioned when the macro backdrop becomes less supportive, is the underlying thesis.

The strategy team at CS has selected 13 companies that fit the mould. On average, they trade at a -5% valuation discount vis a vis the broader market while offering a 4.4% average dividend yield (versus circa 4% for the broader market).

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