As I tone down our multi-year bullish stance on the major Australian banks (underweight) and Telstra (neutral), that alone represent 35% of the benchmark ASX200, I continue to scour the industrial market for what I would describe as “earnings growth at a reasonable price” meets “dividend growth at a reasonable price”. As I keep writing, growthless yield will perform like a utility from here. If you want capital growth, you must now focus on earnings growth & dividend growth.
I am trying to find structural top down growth themes and then identify the best earnings and dividend leverage to that theme at the best risk adjusted valuation.
Yesterday I attended a management presentation by the $1.2 billion market cap Automotive Holdings Group (AHE). In my view this stock ticks all the boxes I am looking for that should ‘drive’ FY15 relative and absolute outperformance.