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Amazon Increases Presence In Groceries

Published 19/06/2017, 10:50 am
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Originally published by Rivkin Securities

The S&P 500 and Dow Jones Industrial Average closed slightly higher on Friday although the Nasdaq 100 continues its slide from highs reached just over a week ago. Amazon (NASDAQ:AMZN) announced over the weekend that it is acquiring US grocery retailer Whole Foods (NASDAQ:WFM) for US$13.7bn. This move will surely have the Australian supermarkets worried as Amazon is due to launch in Australia sometime in 2018 and the acquisition confirms that Amazon intends to compete in the grocery space. The main defence for the local supermarkets is the fact that they have extensive store networks and the majority of Australians still buy their groceries by going to the store.

This week, on Tuesday, we get the Reserve Bank of Australia (RBA) monetary policy meeting minutes that may give some insight into the RBA’s view on the economy and perhaps some clarity on the direction of the next change in interest rates. Economic data has been very mixed recently making it difficult to predict what the RBA is thinking in terms of monetary policy. Other than this, it will be a relatively quiet week in terms of economic news.

Last week we had the Rivkin Local momentum rebalance so here we present some of the best performing stocks in the ASX 200. The table below shows the top 10 ranking stocks by price change over the trailing 12 months.

Table

Twelve-month price change of the 10 best performing stocks from the S&P/ASX 200.

Whitehaven Coal Ltd (AX:WHC) is at the top of the list as the company has benefited from a rapid increase in the coal price over the past 12 months. Although the coal price is well off the peak reached late last year, it is still well up on its pre-spike levels. Two of the companies in this list are holdings in Rivkin Local’s current momentum portfolio, Bluescope Steel Ltd (AX:BSL) and Qantas Airways Ltd (AX:QAN), with both positions having performed very well since we bought them. This strategy utilised a more complicated momentum ranking and includes only S&P/ASX 100 stocks.

ASX futures are pointing to a slightly higher open this morning.

Data releases:

- No Significant Data

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