article 3 months old

Rudi’s View: Reliance Worldwide, ResMed, And Equity Trustees

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 | Nov 16 2018

In this week's Weekly Insights (this is Part Two):

-Autumn Has Arrived, Plus Seven Quotes
-ESG Focus Should Be Yours Too
-Conviction Calls
-Bond Yields & Decelerating Growth

Rudi On TV
-Rudi On Tour

[Non-highlighted parts appeared in Part One on Thursday]

Conviction Calls

By Rudi Filapek-Vandyck, Editor FNArena

Amidst plenty of share market commentary and controversy, portfolio managers at stockbroker Morgans have stuck by Corporate Travel ((CTD)), telling clientele they're are satisfied with management's response to short seller VGI, believing share price weakness might stick around for a while but it doesn't appear to be justified.

In addition, Morgans' Balanced Model Portfolio has added exposure to Sydney Airport ((SYD)) while also reporting a watchlist is being kept with specific focus on major banks, ResMed ((RMD)), Reliance Worldwide ((RWC)) -to buy some more- PWR Holdings ((PWH)), Ramsay Health Care ((RHC)) -with possible intention to sell- and Motorcycle Holdings ((MTO)). The latter is considered "too cheap to sell".

Those responsible for managing the stockbroker's Growth Model Portfolio have been left licking their wounds, as the portfolio includes Corporate Travel and Motorcycle Holdings, but portfolio managers see "compelling value" emerging in lots of places now that the share market experiences melt downs regularly.

For now, the portfolio has added shares in Oil Search ((OSH)) and OZ Minerals ((OZL)), while trimming its position in People Infrastructure ((PPE)). Here the watchlist consists of ResMed, Reliance Worldwide, PWR Holdings, and Motorcycle Holdings.

In terms of yield plays, Morgans' favoured exposures remain Viva Energy REIT ((VVR)) and Centuria Metropolitan REIT ((CMA)) and, in case large cap exposure is a requirement, Stockland Group ((SGP)) and Mirvac Group ((MGR)).

****

Stock pickers at Wilsons have brushed off and updated their selective list of Conviction Calls which triggered the removal of Afterpay Touch ((APT)) and also the fresh inclusions of Equity Trustees ((EQT)) and GWA Group ((GWA)).

Keeping their spot on the list: Bravura Solutions ((BVS)), ARQ Group ((ARQ)), Collins Foods ((CKF)), Ruralco ((RHL)), Ridley Corp ((RIC)), Nanosonics ((NAN)), ImpediMed ((IPD)), Pinnacle Investment ((PNI)), Noni B ((NBL)), Ausdrill ((ASL)), Mastermyne ((MYE)), and NRW Holdings ((NWH)).

****

Analysts at Morningstar also updated their "Best Stock Ideas"; ideas picked because, on their assessment, share prices are below fair value and thus too cheap. Four changes were made: Link Administration ((LNK)) and Macquarie Group ((MQG)) are now included, while MYOB Group ((MYO)) and Ramsay Health Care ((RHC)) lost their spot.

Remaining on the list: a2 Milk ((A2M)), Aveo Group ((AOG)), G8 Education ((GEM)), InvoCare ((IVC)), Pendal Group ((PDL)), Telstra ((TLS)), Westpac ((WBC)), and Woodside Petroleum ((WPL)).

****

Stockbroker Morgans also updated its selection of High Conviction Stocks last week which saw the removal of Noni B, alongside the inclusion of ResMed and Lovisa Holdings ((LOV)).

Retaining their spot on the list: OZ Minerals, Reliance Worldwide, Westpac, PWR Holdings, Volpara Health Technologies ((VHT)), Kina Securities ((KSL)), CML Group ((CGR)), and Australian Finance Group ((AFG)).

Bond Yields & Decelerating Growth

The global sell-off in equities is no longer about readjusting to higher rates and higher bond yields, as was the case earlier in the year; this time around the world is increasingly uncomfortable with the prospect of decelerating growth into 2019.

The chart that illustrates (almost perfectly) the worries that have seeped into global investors' minds was taken from a recent edition from The Gartman Letter, though it probably originates from a report issued by Credit Suisse.

Rudi On TV

My weekly appearance on Your Money (the channel formerly known as Sky News Business) is now on Mondays, 1-2pm.

Rudi On Tour

-ASA Parramatta, on November 14, 5.30-7pm

Rudi On Tour In 2019

-ASA Inner West chapter, Concord, Sydney, March 12
-ASA Sydney Investor Hour, March 21
-ASA Toowoomba, Qld, May 20
-U3A Investor Group Toowoomba, Qld, May 22

(This story was written on Tuesday 12th November 2018. It was published on the Tuesday in the form of an email to paying subscribers at FNArena, and again on Thursday as a story on the website. Part Two will be published on the website on Friday morning).

(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. All views are mine and not by association FNArena's – see disclaimer on the website.

In addition, since FNArena runs a Model Portfolio based upon my research on All-Weather Performers it is more than likely that stocks mentioned are included in this Model Portfolio. For all questions about this: info@fnarena.com or via the direct messaging system on the website).

****

BONUS PUBLICATIONS FOR FNARENA SUBSCRIBERS

Paid subscribers to FNArena (6 and 12 mnths) receive several bonus publications, at no extra cost, including:

– The AUD and the Australian Share Market (which stocks benefit from a weaker AUD, and which ones don't?)
– Make Risk Your Friend. Finding All-Weather Performers, January 2013 (The rationale behind investing in stocks that perform irrespective of the overall investment climate)
– Make Risk Your Friend. Finding All-Weather Performers, December 2014 (The follow-up that accounts for an ever changing world and updated stock selection)
– Change. Investing in a Low Growth World. eBook that sells through Amazon and other channels. Tackles the main issues impacting on investment strategies today and the world of tomorrow.
– Who's Afraid Of The Big Bad Bear? eBook and Book (print) available through Amazon and other channels. Your chance to relive 2016, and become a wiser investor along the way.

Subscriptions cost $420 (incl GST) for twelve months or $235 for six and can be purchased here (depending on your status, a subscription to FNArena might be tax deductible): https://www.fnarena.com/index2.cfm?type=dsp_signup

(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.) 

(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. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi's View stories. Go to My Alerts (top bar of the website) and tick the box in front of 'Rudi's View'. You will receive an email alert every time a new Rudi's View story has been published on the website. 

P.S. II – 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.

FNArena is proud about its track record and past achievements: Ten Years On

Share on FacebookTweet about this on TwitterShare on LinkedIn

Click to view our Glossary of Financial Terms

CHARTS

A2M AFG AOG APT ARQ ASL BVS CGR CKF CMA CTD EQT GEM GWA IPD IVC KSL LNK LOV MGR MQG MTO MYE MYO NAN NBL NWH OSH OZL PDL PNI PPE PWH RHC RHL RIC RMD RWC SGP SYD TLS VHT VVR WBC WPL