Equities

Valuing companies and their potential for growth is a slippery, convoluted process. Quality is a key metric, according to Loomis Sayles, but other factors play an equal role.

Dividend investing can be a good source of defensive income in volatile times, but changing fundamentals mean resources companies and banks may be the weaker play in 2023, with opportunities emerging beyond these traditional Australian dividend payers – although valuation will be key.

Eschewing the traditional route, Spatium Capital founders Nicholas Quinn and Jesse Moors grew their short-holding, long-only small companies managed fund from the seeds of a separately managed account.

Market neutral strategies should not only used as lever for investors that want an on-call safety valve for volatility, but retained as a strategic holding to drive portfolio performance throughout market seasonality according to Yarra Capital Management’s Andrew Smith.

A higher net interest margin drove a 10 per cent increase in CBA’s net profit after tax, while Wesfarmers benefited from a strong performance by Kmart Group and the chemicals division. But with much of the upside for these companies already priced in, investors should be clear about valuations before buying in.

Analysts agree Australia’s big four banks are entering 2023 from a position of strength as they pass on rising interest rates to borrowers. Headwinds remain, however, and the total return picture for shareholders looks more complex.

The US economy should experience a “benign disinflation” over the next six months as pandemic-infused snarls unravel. That should mean good things for stocks, at least in the short term.

Sage Capital remains positive on energy and travel but cautious on iron ore, while remaining focused on individual company earnings.

Treasury has released for public consultation draft legislation aimed at closing a tax loophole for off-market share buybacks, prompting renewed fears over the future of franking credits despite assurances that mum-and-dad investors will not be affected.

The long-running project has been shelved after a devastating Accenture report cited multiple areas of concern. ASIC chair Joe Longo said the ASX “failed to demonstrate appropriate control”.

Companies that win the advocacy of their clients have a remarkable ability to increase their own value according to research from the people who invented net promoter scores.

The team at Ausbil have come up with a novel way to generate income without increasing risk or removing alpha generating opportunities.