With varying degrees of success, every few years I try to take a high level review of the Australian listed company universe. This is made quite easy by the “Official List” of companies published by the Australian Stock Exchange on its website here.
And lo and behold, I came across a small subsector of the Australian market which is doing remarkably well at the moment: the automobiles and components GICS industry group. There are, as always, a few dogs, but out of the 10 companies there were 3-4 or that were very interesting.
Here is the list in full:
|Company name||Ticker||Mkt cap (m)||P/E|
|ADVANCED BRAKING TECHNOLOGY LTD||ABV||8.9||N/A|
|APOLLO TOURISM & LEISURE LTD||ATL||250||13|
|ARB CORPORATION LIMITED.||ARB||1570||31|
|DATADOT TECHNOLOGY LIMITED||DDT||2||N/A|
|G.U.D. HOLDINGS LIMITED||GUD||1250||25|
|PWR HOLDINGS LIMITED||PWH||320||26|
|SCHAFFER CORPORATION LIMITED||SFC||231||12|
Apollo, long-time market darling ARB Corporation, turnaround GUD, PWR Holdings and turnaround Schaffer Corp on closer examination have quite a lovely set of numbers.
They are all beneficiaries of the general increase in auto ownership due to lower fuel prices and continued rising wealth, but they also enjoy benefits from the specialist role many of them play in the auto industry. This is what has been called the “spices” model, where a small but important input can have strong pricing power.
Something to keep an eye on, these are stocks that possess differentiation and so are more properly within (or climbing into) the proverbial moat.
Note: nothing in this post is to be construed as investment advice. The author may hold positions in stocks mentioned.