08 Jul 2022
The tax loss selling hangover is lingering in the small cap sector, according to Dean Fergie from Cyan Investment Management. However, fast movers can take advantage of the pessimism to get their hands on some quality stocks which they are still looking worse for wear. Dean says the key is looking for cashed up companies with a positive outlook. On the flip side of the coin, dean says to keep well away from the consumer finance sector in the smalls – its not a stable place to be with inflationary and rate pressures.
I spoke to Nadine Blayney at ausbiz about the opportunities presented by the end of year tax-loss selling. In particular I highlighted Australian delivery platform Zoom2u that signed a landmark commercial deal with Wesfarmers owned Bunnings Warehouse and the stock still fell materially coming into the end of June.
I also detailed how we were not being lured into the BNPL or consumer credit space on the back of large price declines because we believe the fundamental risks in those industries with rising rates and increasing inflation appear too significant and are, as yet, unquantified.