Local stocks positioned for improving global growth

Thursday, April 22 2010

U.S. share markets have continued to move higher based on positive company earnings results that reflect a continued improvement in the U.S. economy, and some Australian companies are well positioned to take advantage according to one Australian fund manager.

“We’ve believed for some time that the strength of the U.S. recovery was fairly robust, and this is now being played out during the current strong reporting season,” said Jamie Nicol, chief investment officer at Dalton Nicol Reid. “We’ve seen numerous companies reporting results well above analysts expectations reflecting strength in the underlying economy and improving business confidence.”

According to data compiled by Bloomberg, about 83 percent of S&P 500 companies that have reported first-quarter results beat the average analyst earnings estimate which would mark a record proportion in data going back to 1993.

“There are Australian listed companies that should benefit from the improving U.S. economy and we have been positioning parts our Australian equities portfolios to take advantage of this,” said Mr Nicol.

Mr Nicol said Australian stocks that were well positioned to benefit from improving U.S. and global growth included Newscorp, Brambles, QBE and Amcor.

“Newscorp remains well placed to benefit from improved advertising revenues as well as their efforts from monetising their TV networks. Amcor is benefiting from their recent acquisition of Alcan while QBE will primarily benefit from any increase in interest rates globally,” said Mr Nicol.

Dalton Nicol Reid is an independent Australian investment manager that delivers client-focused, quality investment solutions to institutions and high net worth investors.

 

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IMPORTANT NOTE: This information has been prepared by DNR AFSL Pty Ltd ABN 39 118 946 400, an Australian Financial Services Licensee, Licence Number 301658. Whilst, Dalton Nicol Reid has used its best endeavours to ensure the information within this document is accurate it cannot be relied upon in any way and recipients must make their own enquiries concerning the accuracy of the information within. This document is not intended to provide you with personal advice and in providing this information, Dalton Nicol Reid has not taken into account your particular investment objectives, financial situation or needs. You should assess whether this information is appropriate for your particular needs, either by yourself or with your adviser. Dalton Nicol Reid expressly disclaims any responsibility or liability to anyone who acts or relies upon anything contained in, or omitted from, this document. Past performance is not indicative of future performance. Total returns shown are based on Dalton Nicol Reid’s model portfolio and have been calculated before taking Dalton Nicol Reid’s fees into account. No allowance has been made for taxation.
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