Home / In Practice / Financial Planner morning report – Thursday

Financial Planner morning report – Thursday

Here's the Financial Planning news you need to know. Overnight, global share markets recovered on the back of an improving crude oil price, now $32 per barrel, and an uptick in airline bookings, sending both sectors up 4% in the US.
In Practice

The only way is up

Overnight, global share markets recovered on the back of an improving crude oil price, now $32 per barrel, and an uptick in airline bookings, sending both sectors up 4% in the US.
The S&P 500 (+1.7%) benefitted from the news that all 50 US states had now eased restrictions. In a sign the economy may be beginning to turn, the more cyclical smaller companies added 2.7%.
Walt Disney Co (NYSE: DIS) was a key beneficiary of the news overnight, as the likelihood of live sports returning coincided with improving sentiment. Despite Walt Disney’s cruise assets, I see the company as the global leader in content and a must-own in all portfolios.
The ASX managed to deliver a positive return on Wednesday after falling at the open, adding 0.2% on the back of a continued commodity price recovery.

Higher revenue, higher costs

US retailer Target reported results overnight, with digital sales increasing 141%, but profit falling some $500 million as the costs associated with dealing with COVID-19 began to bite. Target’s revenue rose to $19.62 billion for the quarter from $17.63 billion in the prior quarter thanks to a 12% larger basket of goods per customer. After close to a decade of cost-cutting and capital returns for shareholders, it seems the tables have turned.
Australian retail sales fell 17.9%, driven primarily by lower foot traffic, whilst 10% of all spending moved online. EML Payments Ltd (ASX: EML), which provides prepaid gift cards including servicing the likes of Smart Group and Zip Money, saw revenue increase 20% for the nine-month period to $87.1 million. However, the company withdrew guidance for 2021. EML delivered incredible margins of 73.7% on gross debit volumes of $9.83 billion, a 55% increase. This is an interesting play on the continued move to contactless payments around the world.

3 stocks to watch

Similarly to Walt Disney, CBS Media stock has rallied 20% in two days, after announcing its strongest streaming quarter ever, up 55%. Despite an inability to record new TV shows the company will benefit from a restart of the PGA Golf in June.
Australian Agricultural Company (ASX: AAC) appears to be faring through the export market difficulty quite well, reporting strong sales in Asia, up 19%, North America, up 34%, and Australia, up 16%. That said, AAC’s total sales fell $30 million, but profit improved $80 million on the back of improving livestock and property valuations.
Video Game producer Take-Two Interactive, which produces video games including NBA 2K20, Red Dead Redemption and Grand Theft Auto, remains a key beneficiary of the lockdowns, reporting 40% higher revenue at $760 million and profit growth of over 116%. As an avid fan of the NBA 2K series, this company appears well-positioned for changes to the way we relax post-COVID-19.
The daily report is written by Drew Meredith, Financial Adviser and Director of Wattle Partners.




  • Print Article

    Related
    INBrief with Teiki Benveniste from Ares Australia Management

    Teiki Benveniste from Ares Australia Management speaks with Jamie Nemtsas at The Inside Network’s Income & Defensive Assets Symposium.

    The Inside Adviser | 9th Aug 2022 | More
    INBrief with Chris Cornforth from Harvest Hotels

    Chris Cornforth from Harvest Hotels speaks with Jamie Nemtsas at The Inside Network’s Income & Defensive Assets Symposium.

    The Inside Adviser | 9th Aug 2022 | More
    INBrief with Jonathan Liang from J.P. Morgan Asset Management

    Jonathan Liang from J.P. Morgan Asset Management speaks with Jamie Nemtsas at The Inside Network’s Income & Defensive Assets Symposium.

    The Inside Adviser | 9th Aug 2022 | More
    Popular
    1
    Advisers urged to tread carefully with ‘wholesale investor’ status
    Staff Writer | 28th Jul 2022 | More
    2
    Top hedge fund award goes to L1 Capital
    Greg Bright | 13th Dec 2021 | More
    3
    INDepth with Andrew Lockhart from Metrics Credit Partners
    The Inside Adviser | 30th Jun 2022 | More
    4
    Quality of advice review focused on advisers, not consumers
    Drew Meredith | 11th Jul 2022 | More
    5
    MAX Award winners and the new world outside
    Greg Bright | 13th Jun 2022 | More