Australian Stock Market Report – RIO, GUD, Xero shares & more

Australian Stock Market Report - RIO, GUD, Xero, Wisr shares & more

Market Commentary and Stock Tips 

Highlights

Telstra clearing the decks – well not quite all –  RIO, a dividend bonanza, but you can’t please everyone –  GUD the former owner of Victa Mowers, gets into auto parts retailing –  Zero it’s not just nothing, its Xero an accounting software share market dynamo – Credit Corp, a company that turns debits into credits – Wisr, a speculative personal loan business.

Remember Bill Clinton

The catch cry of his successful 1992 Presidential campaign was ‘It’s the economy stupid’.  With the passage of time, the share market equivalent may well be “Its expectations stupid”.  Why is this so? as Professor Julius Sumner used to say. The answer is simple.  RIO this week delivered what can only be described as a most impressive set of numbers. - Profits up 12% and dividends up 25% - yet the market “clobbered” its share price down by 4% on Thursday and a further 1% Friday!  RIO may well ask, what do you have to do, to get a small round of applause from the market?”

My view: All key world economies are not falling apart - only Denmark and Saudi Arabia experienced small falls in GDP in the most recent quarter.  The other 51 economies surveyed by The Economist were positive.  As world economies continued to improve, the demand for materials that RIO digs out of the ground will continue to grow. Iron ore, copper and aluminium etc., are key ingredients for building houses; hospitals; bridges; roads and the like.  In brief I believe the future looks good for RIO.  Furthermore, shareholders are likely to get an extra $2-$3 dividend this year in top of the current dividend, from the proceeds of some large asset sales.

Telstra – have you hung up yet?

It’s not quite clearing the decks.  But the boss of Telstra has cut a swathe through his senior management ranks.  I would have thought that as the boss has presided over the plunge in Telstra’s share price from $6.73 three years ago to a low of $2.60 recently, maybe his head would have rolled as well! 

My view: there are over 2,000 companies listed on the ASX and simply put, there are better options around than Telstra. 

Remember Victa? – Its old owner is now turning grass into auto parts

The erstwhile owner of Victa motor mowers, GUD has seen that the grass is greener in the automobile sector (if that is not an oxymoron).  Indeed its latest report showed that it is now getting significant more traction in the auto parts sector. The switch has proved to be a catalyst for its latest results, which were most impressive. GUD looks to be a sound midsized stock, with good growth prospects.

It may be Zero but it’s not nothing 

The company is called Zero, but it’s known as Xero.  It’s a much sort-after product by accountants and its continuing on its expansion trajectory. While it’s not yet make making profits due its expansion road, its increasing acceptance by accountants and book-keepers looks to be a good recipe for the future. Also it recently announced its acquisition of a company called HubDoc, a leading data capture solution business.  For risk tolerant investors it’s worth careful attention

Stop Press

ALS: a minerals analysis company delivered positive comments at its recent AGM. Its future looks good.

Janus Henderson – A UK asset manager delivered disappointing results this week

Australian Industry Group’s Surveys - the manufacturing and services results were ok, but not great.

Stock Tips - Please contact Michael on 03 8633 9925

australian stock market weekly report

Next Week in Australia:

Monday – ANZ job advertisements

Tuesday – RBA decision on interest rates & AIG Construction Survey

Wednesday – Home Loans

Friday – RBA statement on Monetary Policy

Next Week in United States:

Inflation data and consumer confidence data.

 

Disclaimer: This publication has been prepared solely for the information of the particular person to whom it was supplied by Phillip Capital Limited (“PhillipCapital”) AFSL 246827.  This publication contains general financial product advice.  In preparing the advice, PhillipCapital has not taken into account the investment objectives, financial situation and particular needs of any particular person.  Before making an investment decision on the basis of this advice, you need to consider, with or without the assistance of an adviser, whether the advice in this publication is appropriate in light of your particular investment needs, objectives and financial situation.  PhillipCapital and its associates within the meaning of the Corporations Act may hold securities in the companies referred to in this publication.  PhillipCapital believes that the advice and information herein is accurate and reliable, but no warranties of accuracy, reliability or completeness are given (except insofar as liability under any statute cannot be excluded). No responsibility for any errors or omissions or any negligence is accepted by PhillipCapital or any of its directors, employees or agents. This publication must not to be distributed to retail investors outside of Australia. 

 

wisr shares

About Michael Heffernan

+61 (3) 8633 9925 Email Profile

Michael Heffernan has over 30 years’ experience in the finance and securities industry and is currently a Senior Client Advisor and Economist with a leading Australian Sharebroker Phillip Capital after having been Chief Economist/Lawyer with the Australian Stock Exchange for 13 years, and an Economist with Commonwealth Department of Employment and Industrial Relations for 11 years.
Most recently Michael topped the poll of the Australian Newspaper's Criterion column of his expert tipsters for 2014 with an average increase of 26% over the year. Also Michael was named Stock Picker of the year 2013 and 2016 at the Australian Stockbrokers Foundation Annual Awards Charity Dinner.

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