Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
BHP, Rio and CSL keep ASX in the red for third session
BHP drags on market, reporting season flurry, property recovers
The ASX200 (ASX: XJO) fell 0.1% today solely due to a 7.1% fall in BHP Group (ASX: BHP) as investors digest the massive merger deal; the materials sector was down 3.0% as a result.
Given the dual listing set up and structure of the Woodside (ASX:WPL) deal it’s hard to determine if this is a result of capital flows or a negative view on the deal.
On the positive side, the real estate sector leads the market adding 1.8% behind a strong report by Vicinity Centres (ASX: VCX) which jumped 1.9%.
Management confirmed a stabilisation amid the pandemic with funds from operations hitting $559 million in the second half, up from $520 million in 2021 on the back of an improvement to 84% of gross rental billings being collected in cash.
The loss was narrowed despite a further $181 million devaluation in the underlying property assets, with occupancy remaining strong at 98.2%, down from 98.6.
Importantly, the dividend was increased by 30% and the net tangible assets remain at $2.13, well above the current $1.60 share price.
Portfolio stalwart CSL Ltd (ASX: CSL) fell 1.5% after announcing another bumper year, reporting a 13% increase in sales and profits with the latter hitting US$2.375 billion, both ahead of expectations.
The dividend was increased by 10%, despite management flagged slower profit growth in 2022 as they invest further into their manufacturing capabilities.
The influenza business continued to perform well, up 30%, with some anticipated slowdown in blood collection to the Delta outbreak.
Pizza pays for Domino’s
Domino’s (ASX:DMP) has continued its recovery after a difficult few years with management announcing a 62% increase in the dividend on the back of a 29% increase in profit to $188 million.
Where many said the group couldn’t open any more stores, it has managed to deliver continued growth by doing just that, opening 285 stores around the world adding 10% to its network.
Same store sales across Europe, Asia and Australia were a solid 9.3%, double their expectations, but growth is expected to slow as locked down consumers turn back to their own pantries; shares jumped 7.1%.
Copper miner OZ Minerals (ASX: OZL) fell 0.4% despite announcing a tripling of profit to $268 million with a 71% increase in commodity sales driven by a boom in the decarbonisation and battery theme.
Copper is a key input into everything from batteries to vehicles and remains in short supply. Woodside (ASX:WPL) followed suitor BHP lower, falling 2.1% despite a 10% increase in the dividend.
The company has benefited from a recovery in the oil price with revenue up 31% to $2.5 billion and profit $317 million.
Looking more closely at Magellan’s (ASX:MFG) announcement yesterday, the reason of the selloff appears to relate to a change in the group’s tax rate payable on overseas operations from 10 to 30%. This is a negative for global investors in the business but for Australian’s the higher tax rate will likely be offset by an increase in franking credits.
US market lower on tapering notes, Target beats as Cisco grows
The US market finished lower once again with both the Dow Jones and S&P 500 falling over 1% and the Nasdaq a more resilient 0.9%.
The selloff came after the release of the Federal Reserve’s minutes which suggested that the Board were in agreement that tapering of bond purchases of QE would need to occur in 2021. This despite the clear weakness expending in the economy as the Delta variant spreads.
Home construction slowed by 7% in July further evidencing the issues that lie ahead. Similarly, to Australia, Target (NYSE: TGT) shares fell 2.8% after reporting that same store sales growth had slowed to 8.9% from higher levels during the pandemic.
Revenue was up 9.5% for the full year, with digital sales up double figures also. It is clear the consumers are turning back to service spending, at least in the US.
Computer networking system Cisco shares fell after reporting an 8% rise in revenue, the majority from product sales, whilst NVIDIA is set to report after the bell.
