Shortlisted – US dollar earners and WOW

Editorial director of Switzer
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Key points
  • George Boubouras still likes CSL, Resmed, Macquarie.
  • Paul Rickard still likes the yield play, and Arrium as a high-risk trading idea.
  • Peter Switzer likes Woolworths at $33.

The only thing that seems to be certain at the moment is that things will continue to be uncertain. Or as Charlie puts it, volatility is the new normal.

US dollar earners

The lower dollar will be “music to the RBA”.

“[The lower dollar] is an easy way to help out corporate Australia, that has been a little bit lazy on the structural reform. They still need that assistance in this transition phase,” fund manager extraordinaire, George Boubouras says.

His favourites are still the likes of CSL, Resmed, Computershare, Macquarie Bank and Brambles “at the margin”.

“It’s about getting exposure to Australian companies with US dollar earnings because you’re going to get those upgrades coming through once the currency volatility dies down,” he says.

The yield play

Paul Rickard has this to say on the dividend payers like the big banks and Telstra.

“I don’t think the yield play is over, yet” he says.

The problem is, there is nothing else much to buy at the moment.

“Where is the part of the market that says ‘buy me’,” Paul asks.

Of course, there is the US dollar earners mentioned above but as George says, some of these are at the margins.

“There is only so much of the CSLs and US dollar earners etc. that you can have,” Paul says.

On Saturday, Peter picked out Bank of Queensland’s record cash profit of $301.2 million – beating its own expectations.

“This is a good sign for Queensland as well and it comes as NSW is really growing nicely,” he said.

He’s also a buyer of Woolworths at $33.

“I’ve been waiting for a better price.”

One for the brave

Paul also suggests Arrium (ASX Code ARI), the former OneSteel, as a high risk trading idea.

“Following the very cold response to its fully underwritten 1:1 rights issue at 48c, you would have to think there is some value around the current price of 34c. 52 week high is $1.87,” he says.

“It’s hard to imagine this company failing.”

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.

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