December 2, 2015
Stock market savvy fund manager Wilson Asset Management has identified 6 trends likely to strongly affect share returns in 2016. At Morgan Wealth Management, we agree. The 6 trends to be aware of are:
With health tracking devices such as ‘Fitbits’ selling over 20 million units worldwide, from $70 to $500 each, it is clear that the world is jumping on the fitness bandwagon. As such, companies that sell health devices, sports clothing and sports equipment, are positioned to do well. Lorna Jane, which sells sports clothing, has seen a 30% increase in revenue, as Australians keep heading to the gym.
With fears of Chinese baby formula being inconsistent and possibly tainted, Chinese parents are demanding large quantities of Australian baby formula. They are willing to pay high prices for the security that the formula is safe and effective, whereas they can’t be sure of the quality of baby formula produced in their own country. Shares in Bellamy’s Australia have returned over 700% over the past 12 months.
The trend of women increasingly focussing on careers has led to baby plans being postponed to later in life. This increases the need for IVF procedures, and companies such as Virtus Health and Monash IVF are set to profit.
With the AUD’s value dropping against the USD in recent years, tourism into Australia is set to increase as it has become a cheaper holiday for holders of foreign currency.
The ride sharing app Uber has been taking market share as well as labour from the taxi market all over the world, Australia included. Though Uber is privately held, making investment in it difficult, one can make sure to avoid companies that benefit from the use of taxis such as Cabcharge.
With an overheated housing market in Sydney, Morgan Stanley claim that the market has reached its peak, and a tighter regulatory environment is set to cause house prices to come off. This is likely to hurt companies such as CSR, Boral, and James Hardie.
Morgan Wealth Management Group’s identification of both macro and industry trends in the past has boded well for our clients. For the year ended 30 November 2015, our equity recommendations have performed strongly, with AMA Group (240.97%), Henderson Group (60.19%), and Sydney Airport (54.17%).
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