Frugal and Fi(re)nancial Digest | Jan 2021 Newsletter
Updated: Jan 14
In this article
The Stock to Look Out For
Electricity Retailer Comparison - Energex
Cheapest Bill - Non-green Plans
Cheapest Bill - Green Plans
Cheapest Bill - GreenPower Plans
Heat Map for All Usage - Non-green Plans
Cheapest Interest Rates
Did you know?
Upcoming events that may impact the market
The year ends on a high note with the global equity markets up by 5% in December (16% for the year) with a strong recovery being priced in as the introduction of two more vaccines providing some relief that the conclusion of the pandemic is close. AstraZeneca/Oxford, PfizerBioNTech, Moderna announced in November tha tthey vaccine was effective in reducing the symptomatic cases. It will be interesting to see how the logistics would work regarding the end-to-end process for mass administration, how any mutations are dealt with and of course the willingness of the public to get vaccinated. This has appeared to offset the significant increase in worldwise cases (especially in Europe and US) and various outbreaks causing strict lock measures to be reimposed.
US stocks climbed 3.7% (16.26% for the year) with the contribution of a new, more green and collaborative president as well as completing a blue sweep of the senate with Kamala to break ties in the chamber. The pandemic relief plans also passed Congress which will help the economy.
The European equities (ex UK) gained 10.2% (2.1% for the year) once again on the hopes of effective vaccines, Brexit deal, and the €1.8 trillion budget package (€750 billion recovery fund). Germany was the best performing index for December (up 3.22%) and for the year (3.55%).
UK gained 12.6% (lost 9.8% for the year) for Q4 2020. Despite the restrictions, retail spending and house prices in November were u though GDP still a fair way off the Feburary level. Q4 did end well with a Brexit deal finally which contributed to the sterling rising 5% for the quarte. The BOE also announced tha it's asset purchase facility would be further expanded by GBP$150 billion with the US Federal Reserve to also purchase a minimum of USD$80 billion/month Treasuries and agency Mortgage-backed securities. This will likely continue until the employment and inflation goals are reached.
Meanwhile, emerging markets has gained 19.8% (18.7% for the year) in Q42020 which was the strongest quarterly return in more than a decade due to the hopes of a recovery. This is helped with a falling dollar and continual improvement in trade activity. Increased demand in technology has helped China to its highest November exports on record and South Korea with PMI increasing to 54.6 (highest since 2011). This aided South Korea to be the best performing index in Asia in December (10.89%) and 30.75% for the year.
Japanese equities up 3.82% in December on the vaccine news and 16.01% for the year.
Growth equities are up 34.2%, small cap up 16.5%, and commodities down 3.1% for the year.
The Stock To Look Out For
Goodman Group (ASX: GMG)
The real estate giant has been on a meteoric rise in the past decade. The company is a kingpin of industrial real estate in 17 countries. And it is by far the biggest industrial property group in all of Australia. The properties the company deals with include office and business parks, warehouses, and logistics facilities on massive scales. However, you should buy this stock just on these reasons. Here are some reasons to pay attention to GMG.
A bulk of the growth in the past decade can be appropriated to its exposure to the hottest economies of our time; such as eCommerce, food, consumer goods, digital economy, and logistics. The company has then built strong relationships with the likes of DHL, Walmart, and Amazon. This relationship has fostered growth in the GMG stock.
GMG has ridden on the growth of these economies to reach its highest ever peak of $20.07 last November. And in the year 2020 alone, it saw a 41% increase in its shares despite the pandemic. Many pointers on the fundamental analysis indicates a bullish continuation for this stock. But let's have a look at what the technical analysis of the GMG stock shows.
Technical Analysis of GMG
On the weekly chart, you’ll find that GMG stock has been on a meteoric rise from its dip in March. The stock shrugged off the dip and climbed to its highest-ever peak of $20.07 in November, but not before it slowed down in August.
GMG entered a consolidation trend for most of August to October, and in all that time, it found support on the $17.64 price level. The support has proven to be a reliable one, as the stock price recently bounced off it last December. And since the price hit a peak of $20.07, it has made lower peaks down to December while respecting the resistance line. Looking closely, you’ll see another support line that forms a wedge chart pattern with this resistance line. This wedge suggested a breakout to the upside, which has happened.
The overall bias of the GMG stock from a technical point of view is long.
Potential Trade Entry Levels: Buy now at $18.39
Nufarm Limited (ASX: NUF)
Nufarm may not have the bright prospects of GMG at the moment, but it is definitely worth keeping an eye on. Nufarm has been around for more than a century, and the company develops and manufactures chemical protection solutions for crops and seeds globally.
The year 2020 was one to forget for the company for reasons relating to unfavourable weather conditions and the coronavirus pandemic. For these reasons, the stock went on a dip that took about 29% off its returns in 2020. Nufarm announced that it lost $456 million in FY2020 alone.
However, 2020 was not all bad news for Nufarm. The weather condition became more favourable late in the year and the coronavirus-induced restrictions were eased all across the world. As a result, the stock quickly made up some of its lost value in October and November. In those two months alone, the company saw a 47% rise in revenue.
Despite the gloomy outlook of the stock at the beginning of the year, many brokers are still keeping their eyes on the stock. Even Morgan Stanley placed a price target of $4.80 on the shares. It currently sells at $4.10, so there’s still some distance to cover before it reaches this price target.
That’s all about NUF on the fundamentals. Let’s see what it looks like on the technical analysis.
Technical Analysis of NUF
At this moment, NUF sits above the historical support level of $3.64. Price may likely bounce off the support for a short term buy. However, a closer look at the stock on a weekly or daily chart will reveal another resistance level on the $4.4 price level. Another notable structure on the chart is a descending trendline.
All these important lines have accumulated to put the stock in an interesting position now. A possible outcome is that the stock breaks out to the upside, which would give opportunities for the bulls. However, if the price breaks below the $3.64 support level, it could further dip to the closest historical support level, which is at $2.30.
Right now, keep an eye on the stock. Buy if the price breaks the descending trendline. Sell if the price breaks the current support.
Potential Trade Entry Levels: For aggressive traders, sell now at $4.08 and take profit at $3.75. For a conservative entry, wait for the price hit to $4.60 and buy, or wait until price hits $3.50 before selling.
How I can save you money this month
Electricity Retailer Comparison - Energex
I've done this very quickly to encourage people to check their electricity bill because there are always better valued options. I'm using flat tariff and 5000kWh/year as my assumption as this is considered the average in this area. If you want to check out the comparison for your area, usage and tariff type please click here.
Please note that Vic, SA, WA, Ergon (network) and Tassie have not been added yet.
The rankings will change depending on your network area, actual usage, usage profile and tariff type.
Your energy bills are generally the top 3 or so expense you're likely to be paying so please don't hesitate in giving your current retailer the boot. It's easy and most sign-up takes just a few minutes. The only cost is generally the final read which can vary between $12 in Ausgrid to like $90 in ACT. Check with your current retailer before you churn.
The Heat Map - Energy Flat Tariff
I've built a heat map to demonstrate that just because an Energy Retailer is cheap for your friends, it doesn't mean it will always be the cheapest for you. For example, you can see Kogan is the cheapest for a 6000kWh customer but it's not as cheap as Powerdirect, Mojo, Simply Energy or Origin for s 2000kWh customer.
This is where the Retailer Comparison Tool comes in to calculate your specific network, tariff type and usage.
Red - Most Expensive
Yellow - In the middle
Green - Cheapest
Cheapest Interest Rates in the Market
*The rates are quoted based on a borrowing amount of $500k. Higher borrowings may attract greater discounts.
The above rates were brought to you by Shanker Ramakrishnan, Director of SR Business & Finance Consulting Pty Ltd. Ramakrishnan is a qualified Economist holding Bachelor & Master Degrees in Economics. He is an accredited Finance Broker with the Finance Brokers Association of Australia (FBAA), and holds a Certificate IV in Financial Services, and a Diploma of Finance & Mortgage Broking Management. Ramakrishnan is an experienced & Successful Multi-Millionaire Investor across Residential Property, Commercial Property, and Self-Managed Super Fund Investments.
Contact Shanker Ramakrishnan at SR Business & Finance Consulting Pty Ltd if you want more details Email: firstname.lastname@example.org.
Did you know?
Elon Musk once said "I think college is basically for fun and to prove you can do your chores, but they are not for learning. You can learn anything for free!".
Upcoming events that may impact the market
4 Jan - Commodity Prices y/y
5 Jan - ANZ Job Advertisements m/m
7 Jan - Building Approvals m/m
7 Jan - Trade Balance
11 Jan - MI Inflation Gauge m/m
11 Jan - Retail Sales m/m
15 Jan - Invest Housing Finance MM
15 Jan - Owner-Occupied Housing Finance MM
20 Jan - Westpac Consumer Sentiment
21 Jan - CB Lending Index m/m
21 Jan - Employment Change
21 Jan - Unemployment Rate
26 Jan - NAB Business Confidence
27 Jan - MI Lending Index m/m
27 Jan - CPI q/q
27 Jan - Trimmed Mean CPI q/q
28 Jan - Import Prices q/q
29 Jan - PPI q/q
29 Jan - Private Sector Credit m/m
1 Feb - AIG Manufacturing Index
1 Feb - MI Inflation Gauge m/m
1 Feb - ANZ Job Advertisements m/m
1 Feb - Commodity Prices y/y
2 Feb - Cash Rate
2 Feb - RBA Rate Statement
3 Feb - AIG Construction Index
3 Feb - Building Approvals m/m
4 Feb - AIG Services Index
4 Feb - NAB Business Confidence
4 Feb - NAB Quarterly Business Confidence
4 Feb - Trade Balance
5 Feb - RBA Monetary Policy Statement
5 Feb - Retail Sales m/m
Black - Medium Impact
Red - High Impact
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