With 2014 at best a so-so year for most Australian investors, many are hoping for a better 2015.
Here’s a look at what to expect:
AUSTRALIAN DOLLAR DOWN, PROFITS UP?
The dollar fell from more than $US1 to almost 80 US cents during 2014 and Esho Group CEO Peter Esho says exporters in particular should do well in 2015.
“The fall in the Aussie dollar is going to have huge implications for the economy and I think that’s been overlooked,” he said.
IG market strategist Evan Lucas says companies with a large percentage of their earnings derived from the US or elsewhere overseas – think QBE, CSL etc – should also benefit from the higher US dollar.
WHO WINS FROM CHEAPER OIL PRICES?
Oil prices have more than halved since July last year and that’s been great news for Qantas (which has a fuel bill of $4.5 billion) and helped the airline’s share price to double last year.
Lower prices at the petrol bowsers should also see Australians spend more in 2015 and Peter Esho expects transport businesses like Toll Holdings and Aurizon to be among the biggest beneficiaries.
“Not only do low energy costs improve their bottom line, the spillover effect is greater spending and economic activity, which will improve their volumes.”
RETAILERS CATCH A BREAK?
Retailers, and other companies depending on discretionary spending from consumers have been generally weak performers for several years but the low oil price, coupled with low interest rates could finally change that.
CMC Markets market strategist Michael McCarthy thinks retailers should also benefit from the expected increase in spending, especially electronics retailers, who have been among the weakest performers in recent years.
“Although I’m not a huge fan of Harvey Norman’s business model I suspect that will be a beneficiary, as will JB Hi-Fi.”
THINGS CAN’T GET ANY WORSE FOR ENERGY STOCKS, OR CAN THEY?
As oil prices slumped, so, too, did the share prices of oil and gas companies.
And with no-one sure when prices will rise again the sector is best avoided, or is it?
Evan Lucas says there are good opportunities to be had for investors willing to go against the tide.
“It’s something that will turn around and when it does it will bring a very good buying opportunity, there’s no doubt that Santos and Oil Search at around $7 is undervaluing those companies.”
LAST YEAR’S LOSERS ARE THIS YEAR’S WINNERS?
Woolworths and Coca Cola Amatil had a disappointing 2014, with their share prices dropping 10 per cent and 22 per cent respectively.
Peter Esho argues its only a matter of time before both come back into favour, though he concedes Coca-Cola still has issues to sort out.
*This reporter owns shares in Woolworths and Santos