Australian reporting season highlights

Mathew Hodge: Yeah, we really are in the middle of it right now. So, I guess, reviewing kind of the things that have caught my eye in the last week or so – Brambles, it's been a best idea for a while now. I think that was a really strong result. The business has probably been performing a bit below its potential, but they look in a really good spot. I like that franchise. It's global, and it's dominant, and they're showing that they've got pricing power. So, that was impressive.

James Hardie – their margins were down. They were unable to pass on costs. I mean, this is a theme across some businesses. And I think one of the differences is, some of these businesses will be able to eventually pass on those costs, and others won't. And in the case of James Hardie, very solid franchise, still taking market share. We'd view that as an opportunity to buy.

BHP obviously is strong result. The yield appeals. We acknowledge that. It's obviously being powered by coal a bit more. So, this time around, iron ore is definitely coming off. But I think longer term, I wouldn't bank on that earnings yield or that dividend yield hanging around because there's a pretty meaningful hole that's probably likely that they're going to need to cover in terms of earnings as iron ore rolls off as we think is likely.

Santos – so, the market didn't like the result. But it's in a good space. We like the exposure to gas. It's going to be a while for the omelet that is EU energy to be unscrambled. So, I think the outlook there is pretty strong.

REITs – obviously, Mirvac and GPT reported. Our REIT analyst, Alex, sees reasonable value in both of those. There's obviously some clouds on the horizon – headwinds from interest rates, property prices and the slowing economy. But there's a lot of downside already factored into the share prices on those stocks. So, perhaps worth looking at a couple of those REITs.

Consumer has been really interesting. We've had the pandemic, and the impacts from that are kind of rolling off now. JB Hi Fi and Super Retail still strong. People are still spending. I think households are in pretty good shape. That kind of consumer spending hasn't rolled over yet, but we still expect that they would, and it will be interesting to see what happens when that does. We might actually get some opportunity to buy some of these consumer stocks, which have generally been pretty expensive.

CSL, a great business, but pretty richly priced at the moment. Global franchise in an attractive market. I think that's one worth keeping on watch. The market didn't like either AGL or Origin's result. I think there are some timing issues between how the prices of energy flow through to those companies versus their input costs. There's obviously some pressure on input costs, but we think there's upside in both as retail electricity prices start to rise in concert with the rises that we've already seen in wholesale electricity prices. And then, with Origin as well, they've got their exposure to LNG and the outlook is pretty bright there. For as long as the energy crisis remains in Europe, we think that's going to take a while to unscramble.

Newcrest was a bit disappointing both on production and guidance, but the shares have come off nearly a third since April. So, we think there's pretty good value there. And TPG had a weak result. The market didn't like it. But Brian Han reckons the long-term story is intact and we'd view this as an opportunity. We're really positive on their competitive outlook for mobile and the synergies to come from the Vodafone merger, among others.