Positioning the portfolio for the opportunities
Australia Value Equity strategy
23 July 2018
- Our current portfolio demonstrates our multi-lensed investment approach and outlook.
- We are overweight stocks in consumer, non-bank financials and energy sectors, and holding higher-than-average Quality exposures.
FULL REPORT (PDF) | ARTICLE SUMMARY
Our Value Equity portfolios are currently overweight stocks in consumer, non-bank financials and energy sectors, and holding higher-than-average Quality exposures.
Below, we highlight some of the key holdings* in the portfolio, all of which demonstrate our multi-lensed investment approach and outlook.
Jim Power - Research Analyst
JB Hi-Fi is a world-leading retailer with high
sales productivity and low cost-of-doingbusiness
The retailer, which has produced above-market EPS growth, while improving its online and delivery options, is well-positioned against the much-feared arrival of Amazon in Australia.
For the consumer staples sector, there is a saying that should ring true for
Woolworths: ‘when the elephants are fighting,
the ants die first’. It will be the small
independents that will suffer in any price wars,
potentially with Amazon.
But the interesting point from discussions with
Woolworths’ management is the plans for big
data. It is now one of the biggest data owners
in the country, with transaction data on baskets,
line items and economic activity allowing the
company to track customer behaviour and
target individual promotions. Just 18 months
ago it did not employ any big data software engineers
employed, but now has a big team.
Matt Davison - Senior Research Analyst
Financial services company IOOF has
demonstrated itself as a preferred home for
financial planners and has significant
opportunities from platform optimisation
including the integration synergies of the ANZ
Wealth business. We think there will continue
to be growing demand for financial advice and
IOOF continues to prove its worth as an
efficient, cash-generative company exposed to
Michael Slack - Head of Research
Energy stocks have underperformed the
market for 10 years, impacted by deflationary
forces, lower bond yields, falling oil prices, and
the perception that there is a glut of liquified
natural gas (LNG).
With oil prices now regaining ground towards
incentive cost, as well as strong demand
growth and a likely shortage of LNG beyond
2020, energy companies such as Woodside are
well-positioned with new projects to deliver
growth into this demand window.
* The information provided should not be
considered a recommendation to purchase
or sell any particular security. It should not be
assumed that any of the security transactions
discussed here were, or will prove to be,