Latest / Best of Business / Jeremy Hutton: Milford Asset Management Equities Analyst on the NZX winners and losers for 2024

Transcript

Jeremy Hutton: Milford Asset Management Equities Analyst on the NZX winners and losers for 2024 · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk SEDB. Follow this
• 0:13
  Speaker 1: and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: We're looking back and the year that was on the
• 0:18
  Speaker 2: stock market, the Index fifty with the winners and losers
• 0:21
  Speaker 2: joining us Jeremy Hutton from Milford Asset Management. Jeremy, Good evening,
• 0:25
  Speaker 2: Good evening, Ryan, who is currently leading the INDEDEXTS fifty
• 0:28
  Speaker 2: so far this year? Who are we crowning? Number one?
• 0:32
  Speaker 3: Yeah, so far. The current leader on the inziet X
• 0:34
  Speaker 3: fifty with about two trading weeks to go in twenty
• 0:37
  Speaker 3: twenty four is Tower Insurance. Now. Tower is up a
• 0:40
  Speaker 3: whopping one hundred and fifteen percent this year, albeit it
• 0:44
  Speaker 3: is coming off a bit of a low base with
• 0:46
  Speaker 3: a horrid twenty twenty three with some some of the
• 0:48
  Speaker 3: bad weather events which really hit all the insurers hard.
• 0:52
  Speaker 3: But Tower has regained a lot of momentum, you know,
• 0:55
  Speaker 3: some more benign conditions in twenty twenty four and has
• 0:58
  Speaker 3: had some good operational improvements as well. So that has
• 1:01
  Speaker 3: led to a series of earnings upgrades throughout the year
• 1:03
  Speaker 3: and it's regained inclusion back in the very important insetex
• 1:07
  Speaker 3: fifty index. So that's been driving the really strong share
• 1:10
  Speaker 3: price performance from Tower.
• 1:12
  Speaker 2: And Genrack was the tech business we crowned last year
• 1:15
  Speaker 2: in twenty twenty three. How did they perform this year?
• 1:19
  Speaker 3: Yeah, another very strong year for gen Track. It's up
• 1:21
  Speaker 3: one hundred and one percent in twenty twenty four, and
• 1:25
  Speaker 3: this follows a very strong and impressive one hundred and
• 1:28
  Speaker 3: sixty percent in twenty twenty three as well. So gen
• 1:31
  Speaker 3: Track provides software to electricity retailers and it's had some
• 1:35
  Speaker 3: really good tailwinds of these retailers wanting to shift from older,
• 1:39
  Speaker 3: clunkier systems onto gen tracks, more fit for purpose software.
• 1:44
  Speaker 3: It's been winning customers all around the world, many geographies,
• 1:47
  Speaker 3: growing revenue strongly and also in a big earnings upgrade cycle.
• 1:52
  Speaker 3: And with the electrification of everything in our economy, it
• 1:55
  Speaker 3: needs more smarts and more software to help deliver this.
• 1:59
  Speaker 3: So those tailwinds could continue. And it is great to
• 2:02
  Speaker 3: see a New Zealand tech business growing and doing really
• 2:05
  Speaker 3: well on the global stage.
• 2:06
  Speaker 2: It really is. It's a great story. And let's talk
• 2:08
  Speaker 2: about the losers. They're not great stories. Which companies have
• 2:11
  Speaker 2: struggled this year.
• 2:13
  Speaker 3: Yeah, as we know, the domestic economy has been really
• 2:16
  Speaker 3: challenged with high regious rates and consumer pockets getting squeezed,
• 2:20
  Speaker 3: and this has been reflected in the share prices of
• 2:22
  Speaker 3: companies that are exposed to sectors in this So with
• 2:26
  Speaker 3: that backdrop, we've had retail that's been hit really hard,
• 2:28
  Speaker 3: so Catmandu that's down forty eight percent this year, the
• 2:32
  Speaker 3: Webhouse down thirty seven percent as well, and their construction
• 2:36
  Speaker 3: has been really tough, so that'suffected. Fletcher Building that's down
• 2:39
  Speaker 3: thirty eight percent, and then residential housing also been pretty slow.
• 2:43
  Speaker 3: Royman Healthcare has some exposure to that, so that's down
• 2:46
  Speaker 3: twenty seven percent. But then even Spark, which is traditionally
• 2:49
  Speaker 3: a very defensive business that's been hit very hard with
• 2:52
  Speaker 3: businesses and governments reducing their IT and mobile spend, and
• 2:56
  Speaker 3: that stock that is down forty six percent so far
• 2:59
  Speaker 3: this year.
• 3:00
  Speaker 2: Overall, the house the Injects fifty performed this year as
• 3:04
  Speaker 2: a whole.
• 3:04
  Speaker 3: As a collective, yeah, I'd say it's been a pass
• 3:07
  Speaker 3: for the nzet X fifty. It's up eight percent so
• 3:10
  Speaker 3: far this year, and given some of the constraints and
• 3:13
  Speaker 3: the pressure on the local economy, it's actually not too
• 3:15
  Speaker 3: bad of a result. Unfortunately, it is behind the very
• 3:18
  Speaker 3: powerful US indexes, some of which are up over twenty
• 3:21
  Speaker 3: five percent, mainly on that Magnificent seven and AI boom.
• 3:26
  Speaker 3: But I think the setup for New Zealand is improving
• 3:28
  Speaker 3: into twenty twenty five. You know, we've had some decent
• 3:31
  Speaker 3: interest rate cuts delivered already and likely some more to come,
• 3:34
  Speaker 3: so we should start to see some of these beaten
• 3:36
  Speaker 3: up cyclical sectors turn much more positive in twenty twenty five.
• 3:40
  Speaker 2: It's hope, so Jeremy, we need it very much. Jeremy
• 3:42
  Speaker 2: Hutton from Ilford Asset Management.
• 3:44
  Speaker 1: For more from News Talk st B, listen live on
• 3:47
  Speaker 1: air or online, and keep our shows with you wherever
• 3:50
  Speaker 1: you go with our podcast on iHeartRadio