Here's UBS Asset Management's head of Aussie equities Jakov Males fulminating against the market's "valuation ignorant obsession with earnings growth":
At the stock level, CSL is a prime example of this willingness to pay massive premiums for traditional growth stocks, whether they deliver the growth or not.
At the full-year result this week, CSL achieved their guidance of about $1,470m and just 5% growth by excluding the losses from their flu business. This number also includes a foreign exchange gain of about $115m. The normalised number is over 25% lower than where expectations were one year ago. This performance is clearly not the kind of quality growth expected from a company trading on over 30 times.
The company then guided to 11% growth for 2017. However, the starting point for this growth includes the flu loss and excludes the foreign exchange gains for a base of just $1,152m and a 2017 earnings target of $1,278m. Therefore to report a number showing some growth, various one-offs were included, but to ensure growth for the following year these same one-offs were removed from the base.
That is, the company is asking the market to accept $1,470m as the measure of the performance in 2016, and $1,278m (-13% lower) as the target in 2017, and arguing this still represents growth. In fact, earnings have grown by less than 2% p.a. since 2010. It would be understandable for the market to have hammered the stock over this period. Instead, CSL has been consistently re-rated from an average in the high teens before 2013 to about 30 times now. CSL is one example of many of this trend.
- Forums
- ASX - By Stock
- CSL
- csl
csl
Featured News
Add CSL (ASX) to my watchlist
|
|||||
Last
$312.15 |
Change
2.970(0.96%) |
Mkt cap ! $150.9B |
Open | High | Low | Value | Volume |
$311.01 | $313.50 | $310.40 | $184.4M | 590.7K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 485 | $312.14 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$312.15 | 4003 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 436 | 344.890 |
3 | 868 | 344.380 |
1 | 350 | 342.820 |
2 | 355 | 336.560 |
3 | 796 | 334.990 |
Price($) | Vol. | No. |
---|---|---|
281.780 | 1360 | 3 |
291.160 | 17 | 1 |
291.170 | 9853 | 2 |
297.420 | 15013 | 11 |
297.430 | 59989 | 15 |
Last trade - 16.10pm 23/07/2024 (20 minute delay) ? |
Featured News
CSL (ASX) Chart |
The Watchlist
I88
INFINI RESOURCES LIMITED
Charles Armstrong, CEO & MD
Charles Armstrong
CEO & MD
Previous Video
Next Video
SPONSORED BY The Market Online