That was the week that was… your weekly market wrap (24-28 August)

Published 03-SEP-2018 11:29 A.M.


3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

As corporate earnings season comes to a close, the mood about the Australian market is mixed, however, there were opportunities to profit from positive results.

Among the winners this week was Bellamy's Australia Ltd (BAL), whose shares rose 23 per cent after announcing a 36.8 per cent increase in revenue from $240.2 million to $328.7 million.

The result must be put in context with prior movements in the stock price. Bellamy’s fell by approximately 61 per cent from its all-time high in March to the low in August 2018 and is still trading in a medium-term downtrend. This indicates that risk remains to the downside until confirmation occurs that the current rise is sustainable, which may take a few weeks.

Blackmores Limited (BKL) shot up by around 10 per cent this week following an announcement that revenue had increased by around 9 per cent from 552.1 million to 601.1 million and the dividend will rise by 15 cents to $1.55 per share. Provided BKL remains above $150 it is likely to trade higher this year.

Of course this is a speculative assumption, so investors should seek professional financial advice if considering this stock for their portfolio.

Another great profit performance came from Amaysim Australia Ltd (AYS), which rose 6.7 per cent after declaring a 76.8 per cent increase in revenue and a boost to the dividend of 5.9 cents. Amaysim lifted total subscribers to 1.1 million, which was much needed news for Amaysim shareholders, as the stock is down by around 43 per cent this calendar year. Competition in the Telecommunications sector is fierce and it may become increasingly difficult for Amaysim to build market share as margins narrow.

Caltex Australia Ltd (CTX) and Ramsay Health Care Ltd (RHC) were among the losers, with Caltex shares falling by around 8.5 per cent this week after announcing a profit below market expectations and a cut to dividends. Ramsay Health Care dropped 6 per cent on Thursday following a soft result, and concerns about a weak 2018-19 forecast.

The past performance of these product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

What do we expect in the market?

The Australia stock market rose by almost 2 per cent this week to 6,462 points. The rise came off the boil on Friday as the market settled at around 6,450 points, which is the lower level of our short-term target for the market.

The rise this week was driven largely by the Materials (XMJ) sector, which rose by around 1.5 per cent or 300 points, Financials was (XFJ) up 3.3 per cent and Utilities up 3 per cent.

Good luck and good trading!

This article is General Information and contains only some information about some elements of one or more financial products. It may contain; (1) broker projections and price targets that are only estimates and may not be met, (2) historical data in terms of earnings performance and/or share trading patterns that should not be used as the basis for an investment as they may or may not be replicated. Those considering engaging with any financial product mentioned in this article should always seek independent financial advice from a licensed financial advisor before making any financial decisions.

Dale Gillham, Chief Analyst at Wealth Within and Author of Accelerate Your Wealth.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.


Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free