- ASEAN did better than North Asia, Korea was the worst, Philippines the best — "Looking at the Q2/half-year results and ASEAN had more beats than North Asia. In North Asia, Korea disappointed (33.3% beat) while in ASEAN, Indonesia (48% beat) was the worst. Korea is a consensus underweight, and Indo, the top consensus ASEAN overweight now trading at 100% prem to the region on P/BV, could not manage to surprise. Japan also did well with 63% of companies surprising."
- The much-loved consumer sector failed to surprise, esp vs the likes of tech — "The consumer sector is now 3 stdev above mean valuations vs the market, a strong consensus overweight, and yet failed to surprise. Talk of expectations without surprises. Ex the Japanese consumer names, less than 50% of consumer stocks surprised. The under-owned and cheap sectors like tech or financials did much better and offer greater value. Top prize for surprises goes to the utilities."
- Follow through revisions post results have slowed — "This is to be expected now the low base effect has gone, as has much of the operating leverage. No surprise that for 2011 EPS forecasts are down to just 12%. The third year of the recovery is never a strong EPS growth year so no surprise there. In order to get operating leverage up again, we need to see a pick-up in capex. With capex to sales at a 20 year low, that’s not a big ask."
- The much-loved consumer sector failed to surprise, esp vs the likes of tech — "The consumer sector is now 3 stdev above mean valuations vs the market, a strong consensus overweight, and yet failed to surprise. Talk of expectations without surprises. Ex the Japanese consumer names, less than 50% of consumer stocks surprised. The under-owned and cheap sectors like tech or financials did much better and offer greater value. Top prize for surprises goes to the utilities."
- Follow through revisions post results have slowed — "This is to be expected now the low base effect has gone, as has much of the operating leverage. No surprise that for 2011 EPS forecasts are down to just 12%. The third year of the recovery is never a strong EPS growth year so no surprise there. In order to get operating leverage up again, we need to see a pick-up in capex. With capex to sales at a 20 year low, that’s not a big ask."
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