We’ve just emerged from the weakest reporting season since the GFC. Did any company produce a result in February ahead of your expectations?
It was definitely an unusual reporting season, with the ASX 200 hitting records highs and then quickly falling more than 10 per cent. Against that backdrop, company results were mixed and in our view are likely to be further downgraded in the coming months.
One company which delivered a particularly impressive result was medical device company Nanosonics. The strong growth in consumables revenue from their large base of installed devices was a standout. Market expansion was also ahead of our expectations, with the company benefiting from first product sales in Japan.
Have you shifted any of your positions in light of the coronavirus outbreak?
We have been stress testing positions in our portfolios to ensure they can see their way through the disruption with adequate funding and access to liquidity.
On the back of that work we have not shifted any positions; our paranoia about debt and cash flow pays off in moments like these.
Did you add anything new to the portfolio during the sell-off in the last few weeks?
We have been adding to some existing portfolio positions in recent weeks, and are keeping a close watch on some good companies where valuations were stretched.
The sell-off has been surprisingly uniform, though, meaning these stocks are not yet at compelling levels.
Read more…. (subscription to The Australian Financial Review required)