• Christopher Hall

Quality Companies or Value Stocks in August Reporting Season wrap

When buying shares investors usually obsess over valuations and how much growth is already priced in - or not.

This would seem that lower share prices are better.

Rudi Filapek-VanDyck, Editor of FNArena tells us otherwise. Filapek-VanDyck observes that when you look at the overall market, that (much) weaker share prices do not necessarily equal lower risk.

The discussion explores of how Quality companies dominate the share price performance and leave the Value aspects in the distance. Filapek-VanDyck explains how Quality companies dance to the beat of their own drum, beyond the macro tailwinds of low interest rates, corporate tax cuts and other external factors. The Quality companies are growing off the back of their own strength rather than just favorable conditions.

After this reporting season Filapek-VanDyck states there is a clear divide in the Australian market between the Haves and the Have-nots. The latter group are facing structural decline, and for hte first time, as a group are showing reluctance to share insights with investors, rather reducing the metrics of business operations.

Whereas the Haves are companies that are sharing more insights to investors. These companies are coming from a position of strength and are prepared to provide more details of their growth plan and projections.

Rounding out the top performances for this Reporting Season, Filapek-VanDyck Looks at Wisetech Global (WTC) and compares the business model to REA Group (REA), Xero (XRO) and other strong companies leveraging their operations successfully overseas. These are the Quality companies that Filapek-VanDyck sees as leading the Australian market and for good reason.

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