Short n’ Sweet – Amcor and CSL

Editorial director of Switzer
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Volatility might be the new normal but thankfully we’ve had a reprieve during the last few days. No one’s expecting it to be over just yet and as Barrie Dunstan points out today, perhaps we all just need to get used to it.

But while we do have a bit of a breather, it’s a good time to go back and have a look at a few calls we’ve made over the past weeks and how they’ve faired.

You might be a bit tired of us going on about a lower Aussie dollar, and how that will benefit a certain group of stocks, but this play of ours is stating to pay off.

One of Peter’s favourites for a long time has been packaging company Amcor. In Switzer on Saturday a month ago he said: “I’ve been anticipating a fall in the dollar, despite the fact that I’m taking my TV show to Wall Street in early December.”

“I’ve been arguing that a lower dollar would come and help a whole pile of companies and we’ve named them, including CSL, Computershare, Amcor, Resmed, BHP, Rio, Macquarie and even QBE (I have expressed concerns about that company’s ability to disappoint).

And look at how it has faired over the past month compared to the ASX/S&P 200.

Amcor (AMC)

CSL is another company that benefits from a lower dollar and was a favourite of Platypus Asset Management’s Don Williams in late August when he said he liked “everything really” about it.

“Since it listed in 1994, CSL has grown its earnings per share by on a compound basis by 23.3% p.a. (26.2% p.a. in US dollars). The company has managed to successfully expand offshore and become the leading player in plasma-derived therapies globally,” he said in his Fundie’s Favourite report.

He put a 12-month price tag on it of $82 so there is plenty of upside left there too.

As the chart below shows, it has done very well against the index after a big spike up in August following a healthy result and a jump in full year net profit after tax of 7.8%.


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