Forget Silicon Valley, Aussie Tech Stocks Outperform US FAANG stocks
Published 25-MAR-2019 11:36 A.M.
|
2 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
There is a new kid on the tech block, so move over FAANG stocks you’re old news. Silicon Valley has long held the title of the technology capital of the world, but they are now being challenged by Australian tech companies. And it’s no secret that the tech stock sector is known for high growth, and spectacular failures.
Much like FAANG stocks in the US, Australian tech stocks have their own, albeit much less known, abbreviation called WAAAX stocks.
So who are they?
The list comprises WiseTech Global, Afterpay Touch, Altium, Appen and Xero.
FAANG stocks in the US are up an average of 25% year-to-date with the stand outs being Netflix, up 40% and Facebook%. WAAAX stocks, on the other hand, are up an average of 52% from 1 January with the standouts being Appen up 82% and Afterpay Touch up 67%.
As of this year Information Technology (XIJ) has been our top performing sector up 22% followed by Energy up nearly 17% and Materials up 14%. If we look over the past six years, Healthcare has been our best performer rising 281% while Technology has been the second highest at 160%. Compared to the Financial sector, which is up only 51% and the Materials sector, which is only up 21.25%, you can see how well the Healthcare and Technology sectors have been performing. The Australian market has long been dominated by Financials and Materials, with around half the top 20 stocks in those sectors. So are we seeing a changing of the guard from the older more traditional stocks dominating to new stocks becoming more prevalent in the future?
With an aging population and constant new technologies emerging along with decreasing manufacturing and other industries, it is hard to ignore that both Healthcare and Technology stocks will be moving up the list in the next ten years to be some of our biggest companies.
So what do we expect in the market?
After a much anticipated week down on the All Ordinaries Index, it has continued to surprise me with its resilience. In the days from the high on 7 March, the market fell just over 2% and closed lower on many of those days, yet in 50% of the cases it actually traded higher than the previous day. This indicates that our market is quite strong, and investors are more bullish. That said, I still think the market has a little further to fall before the next uptrend unfolds with my target below 6,132 points.
Taking a look at the sectors, Materials, Information Technology and Consumer Discretionary were the top gainers, while Financials and Healthcare where down. Right now, I see the best opportunities coming from Materials, Energy and Healthcare.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in book stores and online at www.wealthwithin.com.au
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
