The SG Hiscock portfolio manager likes Qube, Woodside and Chorus on valuation grounds and dividend growth potential.
SG Hiscock portfolio manager Hamish Tadgell says the fast-changing macroeconomic environment is challenging every sharemarket investor to adapt.
The fund manager enthuses about Australia’s potential and suggests the local sharemarket could continue to outperform global peers thanks to a number of, arguably, structural advantages.P/ASX 200 is down just 3.8 per cent year to date, versus a 17.1 per cent fall for the US benchmark SP/500 index and 29.2 per cent tumble for the tech heavy Nasdaq. Other global peers like Europe’s STOXX 600 are down 9.4 per cent year to date, with China’s A50 Index tumbling 20 per cent.
“Just in terms of positive GDP growth,” he adds. “Other countries are in declining population growth, China’s got a huge problem in this regard. Longer term, I saw India’s population growth has rolled over. The fund’s average portfolio holding boasts earnings per share growth of 17 per cent between financial 2021 and 2022, versus 12.9 per cent for the index. While the average price to earnings ratio for portfolio holdings in financial 2023 is 17.9, which was marginally ahead of the benchmark at 17.6.
“In terms of balance sheet, it’s got good growth options through Scarborough and the West Australian developments it’s looking at. And that’s in a world where I think there’s clearly an increased demand for gas.”Tadgell sayd Chorus had a privileged position in building and owning New Zealand’s equivalent of Australia’s National Broadband Network.
He says ports, terminals and logistics business Qube Holdings is set to benefit from structural tailwinds and a dominant market position.“Over the last 12 months or so, I think [Qube] delivered 25 per cent underlying earnings growth and is expected to post strong earnings growth into 2023,” he says.
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