6 April 2020

Remuneration Report Analysis and Commentary: PortfolioDirect scores annual remuneration reports from ASX listed companies against a consistent analytical framework designed to help assess which reports are most worthy of shareholder support. 
Contents

Where are we in the Cycle?
Of the five PortfolioDirect cyclical guideposts, three are ‘red’ and two ‘amber’.  ‘Trough Entry’ has been retained as the description of the cyclical positioning with falling global growth expectations, a persistently high US dollar and a metal price term structure signaling abundant supplies. The international policy stance is more supportive but well short of  fully compensating for the impact of COVID-19 remediation measures.  China’s improved growth momentum leaves the economy with ample excess capacity.      More...

Market Directions
The balance of near term risks to sector investment returns remains negative although credit markets have regained their composure.  Rebounding equity prices in the leading US market are anticipating a quick resolution to earnings uncertainty. Pre-coronavirus global growth rates would have already been insufficient to absorb growing mine supplies.  A return to 1990s style sector investment performance - when modest sector equity price gains occurred in the midst of sometimes highly disruptive macro conditions - remains possible after public health risks are brought under control.    More...

Portfolio Performance and Positioning
Market momentum improved in late March following large losses throughout most of the first quarter. Especially strong gains among Phase I stocks follow accelerating losses through the quarter. Exploration companies, with no near term earnings to protect, unlike Phase II and Phase III companies, and depending on long term discovery potential for creating value, retain the strongest leverage to an improvement in capital market conditions. Phase II companies face the greatest risks due to potential market shrinkage. Portfolio models remain biased to the Phase I stock category.        More...

Stock Reviews and Rating Analysis 
PortfolioDirect rating reports analyse the quality and risk attributes of proposed mineral developments.  Rating criteria apply to mining and oil and gas stocks at any stage of development.  PortfolioDirect uses a five point rating scale to measure the risk adjusted quality of proposed mineral developments or companies.    
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The 'Steak or Sizzle' blog provides summary judgements on the top performing ASX-listed resources stocks. More...

Although the statements of fact in this report have been added from and are based upon sources the authors of the report believe to be reliable, their accuracy is not guaranteed and any such information may be incomplete or condensed.  To the extent permitted by law, the authors of the report are not liable for any loss or damage arising as a result of reliance placed on the contents of this report.  

All opinions and estimates in this communication constitute judgments by the authors at the report date and are subject to change without notice.  The report publisher is under no obligation to make public any change in view about any matter referred to in this document.    

No references to past investment performance should be taken to indicate anything about future performance.

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