I wasn’t surprised to see Macquarie Group on our list of likes for the past week, although I was surprised that only one of our Super Stock Selectors nominated it.
Once known as the “Millionaire’s factory”, Macquarie Group has been through a few incarnations since it began as Hills Samuel Group in 1969.
It went through a rough patch during the global financial crisis as it tried to be a lot of things to a lot of people. It seems to have worked out its main purpose now and its results last week were certainly encouraging, with a 27% increase in net profit.
“The results released on Friday are structurally very positive,” IG Markets’ Evan Lucas said.
“$1.42 billion came from funds under management, putting Macquarie on a very solid footing now and into the future. Macquarie looks to be the bright spot of the banking space,” he said.
The fact that 70% of earnings come from overseas and we have a falling dollar, with the central bank looking to lower the Australian dollar further, also works in its favour.
Banks feature heavily in our lists this week after an interesting week of earnings. Banks were widely blamed for the big slump on the stock market and the financial services sector does account for over 40% of our total market weighting.
Featuring in our likes list, we have ANZ from Raymond Chan and NAB from Peter but in our dislike lists we also have Westpac, from Raymond, and CBA, NAB and Westpac from Michael McCarthy.
“Recent earnings reporting is disturbing, suggesting the seven years of increasing dividends is coming to an end,” McCarthy says.
Our resident chartist, Gary Stone goes outside the ASX/S&P 100 this week to find Breville Group (BRG) for his like.
“After running up from $2.50 to $10.00 over two and a quarter years, Breville’s share price retraced to an important support level at the $6.30 – $6.40 zone,” he says.
“From there, a new trend has developed with an initial target of $8.30 – $8.50 and then beyond, if the trend continues, to its next resistance levels of around $9 – $9.20 and then eventually to test its all-time high of $10.10.”
Currently trading at around $7.50, the upward trend sounds like a good trend to believe in.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
