Rudi: Why CSL could be headed for $500
And four narratives that will be tested this reporting season...
In a market where the fundamentals seem to no longer matter, reporting season may be a wake-up call for investors who have clung to four key narratives over the last few months.
That's according to FNArena's Rudi Filapek-Vandyck, who argues that these narratives will be confirmed or denied this August.
"The ruling narrative is a lot of stocks haven't participated in this rally, so their time will come now. That's small caps, value stocks, and cyclicals," Rudi says.
"But apart from the macro picture with a recession or no recession, and liquidity and all of that, if earnings don't confirm that thesis and management teams can't pick up confidence for the year ahead, that narrative will fall flat."
Other narratives include the momentum behind artificial intelligence, which Rudi dubs the fourth industrial revolution; the strength in consumer spending and whether or not the consumer is going into hibernation; and the revival of the healthcare sector.
It's the last narrative, in healthcare, that has Rudi particularly excited.
"Healthcare was the best-performing sector for two decades pre-COVID. And post-COVID, it was almost the worst. So has healthcare's time now arrived? ResMed's (ASX: RMD) result was fantastic. So, good vibes already. Let's see what Cochlear (ASX: COH) and CSL (ASX: CSL) come out with," he says.
That said, he doesn't believe that all healthcare stocks will experience the same revival. He notes that investors are likely to see a polarization in results, with names like Healius (ASX: HLS), Sonic Healthcare (ASX: SHL), Ramsay Health Care (ASX: RHC) and Nanosonics (ASX: NAN) likely to experience further pain.
On the other side of the spectrum, Rudi is extremely bullish on the outlook for CSL (ASX: CSL). He argues that CSL's time to shine is now and that the stock could be on its way to $400, if not $500 a share.
In this interview, Rudi shares how he is navigating current market volatility, what investors can expect this reporting season, as well as the stocks he's backing over the next few weeks.
Note: This interview was recorded on Wednesday 7 August 2024.
Timecodes:
- 0:00 - Intro
- 0:25 - Making sense of recent market volatility
- 0:44 - Is the sell-off an opportunity?
- 1:58 - Why you shouldn't wait for the bottom
- 4:06 - Four narratives that will be tested this reporting season
- 8:28 - Polarisation and divergence - why losers may continue to lose
- 11:25 - Stocks investors should be worried about
- 13:05 - Where Rudi is seeing the most value this reporting season
- 14:54 - Why Rudi isn't a fan of investing in resources stocks
- 16:51 - If Rudi could only hold one stock this reporting season, what would it be?
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian Group, Your Money, Sky Business and Sky News.
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
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