That was the week that was… your weekly market wrap (24-28 August)
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.
S3 Consortium Pty Ltd (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 only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.