Rudi’s View: Centuria Industrial REIT, Dexus, OZ Minerals, Pro Medicus, ResMed & South32

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 16 2022

By Rudi Filapek-Vandyck, Editor FNArena

This week I find myself wedged in between a public holiday and two presentations on consecutive days (see further below). As a result, I am limiting this week's Weekly Insights to Conviction Calls.

Equally important, the negative start to the week does not change the broader picture of what is going on for global financial markets. If anything, it makes my writings over the past five months ever more apposite.

One in particular to keep in mind is:

Double Your Protection: https://www.fnarena.com/index.php/2022/03/17/rudis-view-double-your-protection/ (written and published in mid-March)

The story above was later on re-published via Livewiremarkets under the title Beware The Big Bad Bear and has proved highly popular with the investor audience on that platform.



Conviction Calls

"We can’t think of a time in the past 15 years when the consumer macro-outlook has looked more challenging. Consumers face a cocktail of higher costs, i.e., borrowing, petrol, food, energy, insurance, which is not being offset by higher wage growth, while asset prices (equity and real estate) are falling."

With these words retailing analysts at Jarden opened their most recent sector update this week. Jarden is not the first to start downgrading forecasts for Australia's consumer-oriented companies and others will surely follow in the days and weeks ahead.

Jarden's sector preferences have now shifted to supermarket operators and Metcash ((MTS)) among large cap companies, and to Lovisa Holdings ((LOV)) and Universal Store Holdings ((UNI)) among small caps, while a favourable risk-reward proposition is also seen for Adairs ((ADH)) and Dusk Group ((DSK)).

The latest sector update saw the broker downgrading its ratings for JB Hi-Fi ((JBH)), Harvey Norman ((HVN)), Kogan ((KGN)), and Temple and Webster ((TPW)).

Macquarie had already been flashing warning signals about consumer spending in Australia (as had Jarden) and on Tuesday downgraded Australia's "discretionary staples" sector to Underweight.

As far as individual companies are concerned, Endeavour Group ((EDV)) was upgraded to Outperform, where it joined Coles ((COL)) and Metcash ((MTS)). Macquarie also downgraded Harvey Norman and JB Hi-Fi, as well as Wesfarmers ((WES)).


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