Resource stocks such as mining and energy stocks have enjoyed a cyclical bounce over the last 12 months due to rising Australian dollar commodity prices. Who knows if this will continue or not. The good news is that the over the past two years the bigger commodity producers in Australia have become a lot more efficient and slashed their costs of production drastically meaning they are better placed now to handle any future downtown in commodity prices than compared to 5 years ago.
Bank stocks are struggling with rising capital requirements/ratios and regulatory tightening. We tend to lag behind the U.S.A. in terms of financial regulation and trends, etc. While the U.S.A. government loks set to gradually loosen banking regulations we are still tightening them.
The banking regulator APRA (Australian Prudential Regulatory Authority) and the RBA have pushed the banks to limit residential investor lending growth to 10% per annum. This has caused the banks to differentiate their pricing and put up rates on investor loans compared to owner occupied loans. In addition to this they have substantially tightened investor loan criteria, which means that many investors are now turning to non-bank lenders. A gradual move to higher capital ratios and tighter lending standards is hurting the earnings growth of banks with some of the major banks showing no or negative e.p.s. growth in the latest results.
This means companies like FSA Group (ASX Code: FSA) and Pepper Group (ASX: PEP) should continue to show strong earnings growth. Even the mortgage brokers (who can choose to sign loans with banks or non-bank lenders) such as Mortgage Choice (ASX: MOC) and Yellow Brick Road (ASX: YBR) are showing earnings growth.
The "property bubble" in Australia looks set to continue for some years to come (at least if guys like Phillip Anderson are to be believed)
http://www.phillipjanderson.com/18-year-...ate-cycle/ hence it could be worth taking a look at the above sorts of companies as well as debt collection and consumer lending companies, etc, as its not just mortgage debt that is rising but also credit card debt, personal loans, etc.
In terms of other ways to play the property boom, property developers like Tamawood (ASX: TWD) and Sunland Group (ASX: SDG) are doing well and this should continue. Western Australian property has been in a multi year downturn but could be set to reverse direction in the next year or two. A good way to play a rebound in Western Australian property would be the predominantly Western Australia focused property developer Finbar (ASX:FRI). Additionally related service companies like the property valuer Landmark White (ASX:LMW) should continue to do well. In a booming property market property turnover/transaction volumes increase as people flip properties quicker and also due to increased construction the need for property valuations increases. Additionally more people refinance their property loans to borrow against the increased property values (which often means getting a property valuation).
Debt Collectors such as Credit Corp (ASX: CCP), Collection House (ASX: CLH) and Pioneer Credit (ASX: PNC) are the stocks to watch, with Credit Corp being the largest, most profitable and most well managed of the lot. They are all currently growing their revenues and earnings and this sector will likely continue to run for some years as consumer debt continues to climb higher. Also Scottish Pacific Group (ASX: SCO)which does invoice factoring and other specialized types of small business financing is doing well, partly due to increased appetite for business loans and because of home ownership rates going down - due to declining housing affordability - means that less small business owners have residential property to pledge as collateral for a small business loan and are turning to other sources of finance.
On the flip side companies like Thorn Group (ASX: TGA) which owns the radio rentals brand and Cash Convertors (ASX: CCV) which is a micro-finance company and a pawn broker are struggling due to being hit with tougher regulations on "pay-day" and consumer rent-to-buy loans. These types of companies are best avoided.
Blackmores (ASX: BKL) is struggling but looks set to potentially turn the corner within the next year or two as it puts the China hiccup behind it. Meanwhile A2 Milk (ASX: A2M) continues to enjoy strong growth due to success in China (and Australia).
IPH Limited (ASX: IPH) is the leading intellectual property services company in the Asia Pacific. Due to the boom in technology and new patents and the growth of Asia, despite their temporary current dip in growth rate they should do well over the long-term (subject to not making too many dumb acquisitions and blowing up).
Whilst Magellan Financial Group (ASX: MFG) is doing well, most fund managers like Platinum (ASX: PTM), Perpetual (AS: PPT) and BT Investment Management (ASX: BTT) will continue to struggle due to the rush to index funds putting pressure on their fund flows and pricing/margins. The ASX itself (ASX code: ASX) which is listed on the ASX will continue to do well as the market rises bringing with it increased derivatives trading, increased share trading volumes, increased IPOs and capital raising, etc.
After a period of regulatory tightening/shakeup in the vocational education market, the better players in the industry are set to do well. Companies like Navitas (ASX: NVT) which does university student placements from overseas as well as its own vocational training and Seek (ASX: SEK) which runs the Seek.com.au job board and also does online/vocational training/learning should benefit from increasing numbers of foreign students coming to Australia and the continue increase in further education due to an increasingly competitive job market.
Bank stocks are struggling with rising capital requirements/ratios and regulatory tightening. We tend to lag behind the U.S.A. in terms of financial regulation and trends, etc. While the U.S.A. government loks set to gradually loosen banking regulations we are still tightening them.
The banking regulator APRA (Australian Prudential Regulatory Authority) and the RBA have pushed the banks to limit residential investor lending growth to 10% per annum. This has caused the banks to differentiate their pricing and put up rates on investor loans compared to owner occupied loans. In addition to this they have substantially tightened investor loan criteria, which means that many investors are now turning to non-bank lenders. A gradual move to higher capital ratios and tighter lending standards is hurting the earnings growth of banks with some of the major banks showing no or negative e.p.s. growth in the latest results.
This means companies like FSA Group (ASX Code: FSA) and Pepper Group (ASX: PEP) should continue to show strong earnings growth. Even the mortgage brokers (who can choose to sign loans with banks or non-bank lenders) such as Mortgage Choice (ASX: MOC) and Yellow Brick Road (ASX: YBR) are showing earnings growth.
The "property bubble" in Australia looks set to continue for some years to come (at least if guys like Phillip Anderson are to be believed)
http://www.phillipjanderson.com/18-year-...ate-cycle/ hence it could be worth taking a look at the above sorts of companies as well as debt collection and consumer lending companies, etc, as its not just mortgage debt that is rising but also credit card debt, personal loans, etc.
In terms of other ways to play the property boom, property developers like Tamawood (ASX: TWD) and Sunland Group (ASX: SDG) are doing well and this should continue. Western Australian property has been in a multi year downturn but could be set to reverse direction in the next year or two. A good way to play a rebound in Western Australian property would be the predominantly Western Australia focused property developer Finbar (ASX:FRI). Additionally related service companies like the property valuer Landmark White (ASX:LMW) should continue to do well. In a booming property market property turnover/transaction volumes increase as people flip properties quicker and also due to increased construction the need for property valuations increases. Additionally more people refinance their property loans to borrow against the increased property values (which often means getting a property valuation).
Debt Collectors such as Credit Corp (ASX: CCP), Collection House (ASX: CLH) and Pioneer Credit (ASX: PNC) are the stocks to watch, with Credit Corp being the largest, most profitable and most well managed of the lot. They are all currently growing their revenues and earnings and this sector will likely continue to run for some years as consumer debt continues to climb higher. Also Scottish Pacific Group (ASX: SCO)which does invoice factoring and other specialized types of small business financing is doing well, partly due to increased appetite for business loans and because of home ownership rates going down - due to declining housing affordability - means that less small business owners have residential property to pledge as collateral for a small business loan and are turning to other sources of finance.
On the flip side companies like Thorn Group (ASX: TGA) which owns the radio rentals brand and Cash Convertors (ASX: CCV) which is a micro-finance company and a pawn broker are struggling due to being hit with tougher regulations on "pay-day" and consumer rent-to-buy loans. These types of companies are best avoided.
Blackmores (ASX: BKL) is struggling but looks set to potentially turn the corner within the next year or two as it puts the China hiccup behind it. Meanwhile A2 Milk (ASX: A2M) continues to enjoy strong growth due to success in China (and Australia).
IPH Limited (ASX: IPH) is the leading intellectual property services company in the Asia Pacific. Due to the boom in technology and new patents and the growth of Asia, despite their temporary current dip in growth rate they should do well over the long-term (subject to not making too many dumb acquisitions and blowing up).
Whilst Magellan Financial Group (ASX: MFG) is doing well, most fund managers like Platinum (ASX: PTM), Perpetual (AS: PPT) and BT Investment Management (ASX: BTT) will continue to struggle due to the rush to index funds putting pressure on their fund flows and pricing/margins. The ASX itself (ASX code: ASX) which is listed on the ASX will continue to do well as the market rises bringing with it increased derivatives trading, increased share trading volumes, increased IPOs and capital raising, etc.
After a period of regulatory tightening/shakeup in the vocational education market, the better players in the industry are set to do well. Companies like Navitas (ASX: NVT) which does university student placements from overseas as well as its own vocational training and Seek (ASX: SEK) which runs the Seek.com.au job board and also does online/vocational training/learning should benefit from increasing numbers of foreign students coming to Australia and the continue increase in further education due to an increasingly competitive job market.