Report

Aussie Equities Month in Review (May 2018)

  •  The ASX 200 was one of the better performing stock markets in what was a generally weak month. 
  • Reporting Season is fast-approaching, although profit warnings have been reasonably limited. 
  • Reporting Season is fast-approaching, although profit warnings have been reasonably limited. 
  • CSL’s profit warning and more upbeat news on some stocks in the retail space meant Healthcare and Consumer Discretionary were the best performing sectors during the month. 
  •  Short positioning generally fell during the month.
  • The EPS upgrades: downgrades ratio for the market is above long-run averages
  • The dispersion in EPS estimates across the market is around 10% above long-run average.  
Underlyings
APN Outdoor Group Ltd.

APN Outdoor Group Limited is an Australia-based provider of advertising services. The Company operates in the Out-of-Home advertising market segment. The Company supplies Out-of-Home media and advertising services at sites in Australia and New Zealand. It offers digital billboards, static roadside billboards, transit advertising, rail advertising and airport advertising. It has a geographically diversified outdoor advertising network, which operates in New South Wales, Victoria, Queensland, Western Australia, South Australia, the Australian Capital Territory, Tasmania and New Zealand.

Australia and New Zealand Banking Group Limited

Australia and New Zealand Banking Group provides a range of banking and financial products and services to retail, small business, corporate and institutional clients. Co. operates on a divisional structure with six divisions: Australia, Institutional, New Zealand, Wealth Australia, Asia Retail & Pacific and Technology Services & Operations and Group Centre. Co.'s core products offered include deposits, credit cards, loans, investments and insurance, retail products provided to consumers, and banking and financial solutions provided to business customers through managers, among others. As of Sept 30 2015, Co. had total assets of A$914,869,000,000 and total deposits of A$566,847,000,000.

BHP Group Ltd

BHP Billiton is a global resources company. Co. operates under a Dual Listed Company (DLC) structure, which consists of the BHP Billiton Limited Group and the BHP Billiton Plc Group, operating as a single economic entity. As of June 30 2017, Co. operated four reportable segments: Petroleum, which is involved in the exploration, development and production of oil and gas; Copper, which is involved in the mining of copper, silver, lead, zinc, molybdenum, uranium and gold; Iron ore, which is involved in the mining of iron ore; and Coal, which is involved in the mining of metallurgical coal and thermal (energy) coal.

Commonwealth Bank of Australia

Commonwealth Bank of Australia provides integrated financial services including retail, business and institutional banking, funds management, superannuation, life insurance, general insurance, broking services and finance company activities. Co. operates in seven segments, Retail banking Services, Business and Private Banking, Institutional Banking and Markets, Wealth Management, New Zealand, Bankwest, as well as International Financial Services and Other Divisions. As of June 30 2016, Co. had total assets of A$933.1 million and total deposits of A$588.0 million.

CSL Limited

CSL is engaged in the research, development, manufacture, marketing and distribution of biopharmaceutical and allied products. Co.'s operations are divided into three segments: CSL Behring, Seqirus, and CSL Intellectual Property. CSL Behring is engaged in manufacturing, marketing and developing plasma therapies (plasma products and recombinants). Seqirus is engaged in manufacturing and distributing non-plasma biotherapeutic products. CSL Intellectual Property is engaged in the licensing of intellectual property of Co. to unrelated third parties. Co. operates primarily in five specific geographic areas, namely Australia, the U.S., Germany, Switzerland, and the U.K.

Healthscope Ltd.

Healthscope is a private healthcare provider, with 45 private hospitals and 48 medical centres and skin clinics across Australia, as well as 56 international pathology laboratories. Co. is also a provider of pathology services in New Zealand, Singapore and Malaysia. Co.'s reportable segments are Hospitals Australia, which provides management and surgical and non-surgical private hospitals; Pathology New Zealand, which provides pathology services in New Zealand; and Other, which provides pathology services in Malaysia, Singapore and Vietnam and practice management services in medical centres in Australia.

James Hardie Industries PLC Chess Units of Foreign Securities

James Hardie Industries is engaged in the manufacturing and selling of fiber cement products and systems for internal and external building construction applications in the United States, Australia, New Zealand, the Philippines and Europe. Co.'s fiber cement products are used in a number of markets, including new residential construction, manufactured housing, repair and remodeling and a variety of commercial and industrial applications. Co. manufactures numerous types of fiber cement products with a variety of patterned profiles and surface finishes for a range of applications, including external siding and soffit lining, internal linings, facades, and floor and tile underlayments.

Metcash Limited

Metcash is a wholesaler and distributor, supplying and supporting independent retailers across the food, grocery, liquor and hardware industries. Co.'s reportable segments are as follows: Food and Grocery, which comprises the distribution of dry grocery, perishable and general merchandise supplies to retail outlets; Liquor, which comprises the distribution of liquor products to retail outlets and hotels; as well as Hardware, which comprises the distribution of hardware supplies to retail outlets and trade customers.

National Australia Bank Limited

National Australia Bank provides banking services, credit and access card facilities, leasing, housing and general finance, international banking, investment banking, wealth management, funds management, life insurance and custodian, trustee and nominee services. Co.'s division include: Australian Banking, which provides products and services to retail and business customers; National Australia Bank Limited Wealth, which provides superannuation, investment and insurance solutions; and New Zealand Banking, which comprises the Retail, Business, Agribusiness, Corporate and Institutional and Insurance franchises in New Zealand. As of Sept 30 2016, Co. had total assets of A$777.62 billion.

Rio Tinto plc

Rio Tinto is engaged in finding, mining and processing mineral resources. Co. has four product groups: iron ore, which supplies the global seaborne iron ore trade; aluminium, which includes bauxite mines, alumina refineries, and aluminium smelters; Copper and Diamonds, which has managed operations in Australia, Canada, Mongolia and the U.S., and non-managed operations in Chile and Indonesia, with by-product including gold, silver, molybdenum and others such as sulphuric acid, rhenium, and lead carbonate; and Energy and Minerals, which comprises mining, refining and marketing operations across borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium sectors.

Technology One

Technology One is engaged in the development, marketing, sales, implementation and support of enterprise business software solutions. Co.'s segments are: Sales and Marketing, which is involved in the sales of license fees and customer support; Consulting, which is involved in the implementation, consulting services and custom software development services for large scale, purpose built applications; Research & Development, which is involved in research development and support; Cloud, which is involved in the delivery of cloud hosting services; and Corporate, which is involved in the aggregation of the corporate services functions' costs and revenue, and corporately-funded projects.

Telstra Corporation Limited

Telstra is engaged in providing telecommunications and information services for domestic and international customers. Co.'s operating segments are Telstra Retail, Global Enterprise and Services, Telstra Operations, and Telstra Wholesale. As of June 30 2016, Co. provided retail fixed data services to 3.4 million customers, retail fixed voice services to 5.7 million and domestic retail mobile services to 17.2 million customers.

Westpac Banking Corporation

Westpac Banking is a banking organization with branches, affiliates and controlled entities throughout Australia, New Zealand, Asia and in the Pacific region. Co. provides a range of banking and financial services in these markets, including consumer, business and institutional banking and wealth management services. Co. is engaged in the provision of financial services including lending, deposit taking, payments services, investment portfolio management and advice, superannuation and funds management, insurance services, leasing finance, general finance, interest rate risk management and foreign exchange services. As of Sep 30 2017, Co. had total assets of A$851,875,000,000.

Provider
Macro Strategy Advisors Pty Ltd
Macro Strategy Advisors Pty Ltd

About  us:

  • The business is a Proprietary Limited Australian company that is owned and fully operated by Shane Lee from a small office in Sydney’s CBD.
  • Shane worked for 17 years in Sydney-based senior research roles (economist, equity strategist and bond strategist) in global and regional investment banks and a domestic commercial bank prior to starting Macro Strategy Advisors. These roles straddled the asset classes making him uniquely positioned to advise multi-asset investors. He worked for the Reserve Bank of Australia (RBA) for 3 years as a housing, commercial property and equity market analyst and a liquidity forecasting specialist.  He worked as a structural engineer in Queensland for 10 years prior to his career at the RBA. 

Aim of our business:

  • To partner with our clients in their aim to maximise returns. We provide timely, independent and thought-provoking research on thematic macro issues that are impacting or could impact financial markets. We aim to produce research that prompts our clients to question their assumptions.

Services:

  • A fortnightly research note.
  • Regular presentations and data support delivered by understanding our clients interests and investment process.
  • We also in work in confidence to investigate, analyse and report on issues at our clients direction. This work is done on a project-by-project basis.
  • As an Australian based business, the main focus is analysing how domestic and global issues impact Australian investors. However, our global and domestic insights are also valued by our offshore clients.

Our Edge:

  • Our low cost base relative to our competitors allows us to provide a quality product at a reasonable cost.
  • We are fully independent and don’t support a banking function or any third party. We have no interests other than providing our clients with the best possible research.
  • Our focus is not point forecasting, but providing rigorous analysis and insight. We don’t routinely focus on the top or bottom 10% of likely outcomes to create a headline.
  • Shane’s background in engineering has provided clients with unique insights into global infrastructure and domestic housing issues.

 

Analysts
Shane Lee

Other Reports on these Companies
Other Reports from Macro Strategy Advisors Pty Ltd

ResearchPool Subscriptions

Get the most out of your insights

Get in touch