In her review, Julia discusses:
- The impact of bond market volatility (0:19)
- Which stocks have outperformed (2:51)
- Don't go 'bottom fishing' (3:37)
- 4 stocks with fantastic returns (4:03)
- Where to invest in the late cycle of this bull market (4:31)
- Buy stock ideas (5:20)
The Australian sharemarket is down for the second consecutive month. This is partly due to the volatility of the bond market. As we have seen bond yields spiking up, this has led to volatility in sharemarkets and a significant pull back in the S&P 500 index. This is something investors should keep a close eye on.
Earnings season is an important time to determine which companies have outperformed expectations in terms of earnings and price, as they're likely not only outperform in the following weeks after the earnings release, but also in the following months.
The top performers in February were a2Milk (+50.2%), Altium (+27.9%) and Corp Travel (+22.2%). The bottom performer's were Wisetech (-33.3%), IPH (-33.0%) and Myer (-22.9%).
In the current environment, a lot of investors go 'bottom fishing' but cheap stocks usually continue to fall as we've seen for Myer, Vocus and Domino's. On the flipside, stocks such as a2Milk, Altium, Nine Entertainment and Nextdc continue to rise and have returned more than 100% in the last 52 weeks.
In the late cycle of this bull market, assets that tend to perform well are energy and commodity stocks, with some caution in the utility sector.
Bell Potter buy recommendations include Afterpay, Infomedia, Paragon Care, Sealink Travel and Corporate Travel CTD.