CSL’s numbers were fine. It is a fearsomely expensive, superb quality company doing what it normally does, recovering from its own slightly unique set of COVID related supply chain issues.

Those supply chain issues were mainly related to pandemic unemployment benefits reducing paid-for plasma donators in the US, as well as border issues with Mexico also regarding the flow of donors, which now appears be back on track for FY22, which will increase plasma volumes in FY23 (there’s a lead time of about 18 months).

For us, it is the sizeable factor loading to quality that we are after (below, the Fama French factor premia correlates)…

…and the offshore dollar earnings.

The stock specific narrative (novel therapeutics, unmet clinical needs, aging populations) is unchanged.

Our exposure is fractionally above benchmark, it isn’t an “alpha” trade, but rather the above macro factor hedges, and index construction purposes, that define most of the trade, and we periodically oscillate above or below benchmark weight depending on relative performance.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Receive our investment insights

Something went wrong. Please check your entries and try again.