Company Interview / Michael's best and worst of reporting season

Key points:

Markets demonstrate resilience despite geopolitical tensions and oil trade disruptionTop portfolio holdings include AGL, Genius Plus, Wagners, and SuperloopCore Lithium, CSL, and AMP noted as recent underperformersPreference for mining services over direct commodity exposure

Michael Carmody from Centennial Asset Management presents a measured outlook on current market conditions, outlining that capital markets have shown resilience amidst ongoing geopolitical tensions, especially in the Middle East. Carmody suggests that historical trends show markets often look past regional conflicts unless they escalate or significantly disrupt global trade, though he notes the oil trade’s impact on inflation remains a key risk. He expects markets to continue navigating current uncertainties without drastic repositioning.

Carmody highlights the recent reporting season as stronger than anticipated, with more companies exceeding expectations than missing. Among top performers are AGL (ASX:AGL), Genius Plus, Wagners (ASX:WGN), and Superloop (ASX:SLC), all of which Centennial Asset Management holds in its portfolio with the expectation of further outperformance in the coming months. He prefers sector-neutral positioning, focusing on companies with solid fundamentals, sensible valuations, and strong management.

On underperformers, Carmody singles out Core Lithium (ASX:CXO), CSL (ASX:CSL), and AMP (ASX:AMP), identifying ongoing risks, disappointing results, and continued balance sheet challenges. While bank stocks show recent strength, he describes valuations as stretched, pointing to a narrow market rally. Commodity-wise, Carmody remains underweight in resources and gold, with preference for mining services like Monadelphous (ASX:MND), Macmahon (ASX:MAH), and Emeco (ASX:EHL), and only a minor position in Woodside (ASX:WDS).