Rudi’s View: Newcrest, AP Eagers & Speedcast

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 15 2019

Dear time-poor reader: Preview to S&P December index re-weighting and long term trends reflected in index changes

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

-Positive Momentum Continues For CSL
-Conviction Calls
-Focus On Index Changes
-Focus On Index Changes (2)

-Tickets to Conference on Agricultural and Veterinary Biotechnology
-Rudi Talks
-Rudi On Tour

[The non-highlighted items appeared on Thursday in Part One]

Focus On Index Changes

By Rudi Filapek-Vandyck, Editor FNArena

Index inclusions and exclusions can have a noticeable impact on share prices, in particular for smaller caps that either land on or fall off funds manager radars. Decision-makers at Regal Funds Management in particular have made it no secret they sometimes buy and sell around such index updates.

Standard & Poor's is scheduled to announce the next set of adjustments on 13th December, which is yet a while off, but this hasn't stopped some analysts already looking forward to what may eventuate.

At Wilsons, analysts believe Newcrest Mining ((NCM)) seems poised to replace South32 ((S32)) in the ASX20. They think it is also possible that AMP ((AMP)) loses its spot in the ASX50 to a2 Milk ((A2M)) while TPG Telecom ((TPM)) might be replaced by Saracen Mineral Holdings ((SAR)) in the ASX100.

Such changes would likely remain without direct consequences for the stocks involved.

Of more importance might be the predicted ASX200 inclusions for AP Eagers ((APE)), Avita Medical ((AVH)), Centuria Metropolitan REIT ((CMA)) and Perseus Mining ((PRU)) while Megaport ((MP1)), EML Payments ((EML)) and Ingenia Communities Group ((INA)) are also considered a possibility.

With the pending disappearance of Aveo Group ((AOG)) and Bellamy's ((BAL)) due to corporate action, both AP Eagers and Avita Medical are expected to be included sooner. As has now happened with the inclusion of the latter as of yesterday.

Stocks predicted to lose their inclusion in the index are Speedcast International ((SDA)) and Galaxy Resources ((GXY)), and potentially also Pinnacle Investment ((PNI)), Orocobre ((ORE)), and Estia Health ((EHE)).

Wilsons believes there will be a large number of changes when the next update for the ASX300 is announced in March next year, but we'll cross that bridge when we move closer to the date.


Analysts at Morgan Stanley report since March 2007, fresh index inclusions have outperformed the broader market by 7.2% over the period covering 20 days prior to the S&P announcement up to actual implementation.

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