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ASX stocks to watch if the economy enters a recession: Woolworths, ANZ and BrainChip​

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Entry posted by MongiIG in Market News · Tuesday at 23:08
176 views
As the recession concern spreads across the financial market, which sectors and stocks have the potential to demonstrate their resilience? Today we are looking at three ASX stocks.

Source: Bloomberg

Indices Shares Price Woolworths Supermarkets Australia and New Zealand Banking Group Dividend
Hebe Chen | Market Analyst, Melbourne | Publication date: Tuesday 21 June 2022
Concern over the recession is rapidly spreading across the global financial market and the market is responding in a determinedly pessimistic way. The S&P 500 and Nasdaq are trapped in a bear market with the Dow Jones following and the ASX 200 had the worst fortnight as the index tumbled down 11% in June.
The stock market has historically managed to show strong resilience in difficult times as stocks outperformed the S&P 500 but the question this time is, which sectors and stocks have the potential to demonstrate this strength again?
Today, we look at three ASX sectors.

Consumer Staple: Woolworths​

The Woolworths Group Ltd share price has been down by more than 16% from early May. Apart from the headwinds from the macroeconomic environment, the top-one household name in Australia is facing challenges.
First is the shift in consumer behaviour during this extremely inflationary period. The rising prices are penetrating every aspect of people's lives from groceries to building materials, lettuce to strawberries, and more importantly, home loan repayments. Hence, it’s foreseeable that average households will adjust their purchasing behaviour for a tightening budget and as such, the lower-price players in the market, like Aldi, would be ready to squeeze market shares from Woolworths.
Second is the rising cost for Woolworths in general. The supermarket business recently announced price freezes on several Woolworths brand products including flour, sugar, vinegar, oats, eggs, tea, and pasta. While it may be good news for consumers and marketing, this means the company must digest the rising cost out of its own pocket. In addition, Woolworths will also have a higher wage bill as wages increase nationwide. Generally, higher costs could reduce profitability, which in turn will impact the Woolworths share price.
Finally, a key uncertainty for the future comes from the supermarket's latest acquisition deal in which Woolworths announced last month to buy an 80% stake in MyDeal for around $218 million.
Although it makes sense for the supermarket chain to penetrate the online battlefield, MyDeal’s performance during the past two years does not look like a guarantee for success. Technically speaking, the stock price for Woolworths is now landing at its bottom for the past 20 months and the descending tunnel is pointing to the next support level at around $32. On the flip side, the prominent resistance pressure will come from the level around $33.5.

Woolworths daily chart​

Source: IG

Finance Sector: ANZ​

The Australia and New Zealand Banking Group Ltd share price has fallen by approximately 17% over the last month and slipped to its lowest level since November 2020.
In theory, higher interest rates would be in favour by banks while lifting their net interest margins and net profit after tax, and that in turn could benefit their share prices. However, the reality is much more complicated.
First, higher interest rates are poised to hurt the real estate and home loan market as seen in the past two months where the clearance rate in the major capital cities of Australia has dropped by more than 10%. Second, higher interest rates could hurt the bank with potential higher debts and the banking share’s long-term advantage for dividend lovers will lose its shine as a rising return from the fixed income will make their dividend yields less appealing.
Considering how far the ANZ share price has dropped, is the current valuation and dividend yield too good to ignore as a long-term treasury?
Based on the comparison below, it’s safe to say that the ANZ is a great choice if investors are looking into the banking sector by the key measures: better value for the price, highest dividend yield and outstanding earnings performance per share. From a vertical comparison, its PE ratio now sits at the lower end, well below both the average (13.93) and media (12.85) figure.

Source: IG
From a technical point of view, the price is seeking support from $20.74 currently while the oversold RSI print may slow the downward pace for the near term, the long-term bear momentum remains intact.

ANZ monthly chart​

Source: IG

ANZ weekly chart​

Source: IG

Technology sector: BrainChip​

BrainChip had been on a rollercoaster this year. Its share price experienced some freefalling moments with a more than a 15% decline in contrast to great times when the price jumped up more than 5% in consecutive days. However, despite tumbling from its peak early this year, the BrainChip share price is still up 60% over the last 12 months.
The Australian artificial intelligence (AI) technology company has gained a lot of attention since the company was accepted into the Arm AI Partner Program last month. The global leading AI program will enable BrainChip to access Akida, the world’s first commercial neuromorphic AI accelerator, to foster the development of world-class AI products and applications. Although the company is yet to generate much revenue, that doesn’t stop the investor from associating the company with massive potential in the future.
According to the daily chart, the price just managed to break out from the descending trend line since the end of May and an attempt to touch the 20 days-moving average has failed on the first try but is set to the critical watch point for the next couple of days.
If the price has overcome the imminent resistance around $1.0, the level of 1.05 will be the next destination. On the flip side, the previous trendline should be able to stop or at least pause the decline at $0.83.

BrainChip daily chart​

Source: IG
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[Stable Genius]

Mate seriously what share price do you expect in 5 years

$10 will be plenty. I’d prefer it to be $20 but $10 will do. Anything more is a bonus!

I watched NVX go from $2.5 to $10 in 12 months on hope.

SYA go from 3c to 43c in 12 months on expectation.

LKE go from 12c to a $1 in 12 months on promies.

Brainchip has the biggest runway of them all.

When the chip was released, results better than expectations BRN was de-risked.

When I watched the Valeo presentation it showed hope, promise and expectation all in one night.

When Mercedes did their big reveal S#!t got real.

In my opinion there is so much in the pipeline this stock could easily exceed my expectations because the possible revenues are massive!

I am buying as much as I can without putting too much stress on my immediate financials so I’m not worried about the short term. That’s when you run into trouble/stress and worry about the daily price: I currently don’t care about the daily price as I’m not planning to sell a Jatz cracker until Valeo have been selling their Scala 3 Lidar’s for a year or two, and then I’ll re-assess.

Sean Hehir’s speech at the AGM said it all. He did his due diligence and took the job on. He is a competitor who likes to win.

He hasn’t taken the role as a CEO of a company that he thought would fail.

When I’ve seen all the companies below the waterline of the iceberg be known above the waterline and selling their products the SP will be awesome. So my $10 price I think is quite realistic!

Cheers all!

 

[Stable Genius]

Lol, I had the boss of ASIO looking at me a while back! I think/hope they’re a shareholder!

I made a mistake before. I was too general and off the cuff and didn’t check who the person was looking at my profile when I made the above statement. I was going on memory and got it wrong. I need to correct the record as I like to be as accurate as I honestly can. Sorry about that.

Funnily enough I’m not that interesting so they would have been very disappointed!



Brainchip’s the real story here!

 

[Rise from the ashes]

I made a mistake before. I was too general and off the cuff and didn’t check who the person was looking at my profile when I made the above statement. I was going on memory and got it wrong. I need to correct the record as I like to be as accurate as I honestly can. Sorry about that.

View attachment 10154

Funnily enough I’m not that interesting so they would have been very disappointed!



Brainchip’s the real story here!

It's too late now
Asio use key word spotting

 

[Stable Genius]

It's too late now
Asio use key word spotting

You’re SAS story’s better!

I should have checked before I typed!

 

[Rise from the ashes]

 

[Rise from the ashes]

$10 will be plenty. I’d prefer it to be $20 but $10 will do. Anything more is a bonus!

I watched NVX go from $2.5 to $10 in 12 months on hope.

SYA go from 3c to 43c in 12 months on expectation.

LKE go from 12c to a $1 in 12 months on promies.

Brainchip has the biggest runway of them all.

When the chip was released, results better than expectations BRN was de-risked.

When I watched the Valeo presentation it showed hope, promise and expectation all in one night.

When Mercedes did their big reveal S#!t got real.

In my opinion there is so much in the pipeline this stock could easily exceed my expectations because the possible revenues are massive!

I am buying as much as I can without putting too much stress on my immediate financials so I’m not worried about the short term. That’s when you run into trouble/stress and worry about the daily price: I currently don’t care about the daily price as I’m not planning to sell a Jatz cracker until Valeo have been selling their Scala 3 Lidar’s for a year or two, and then I’ll re-assess.

Sean Hehir’s speech at the AGM said it all. He did his due diligence and took the job on. He is a competitor who likes to win.

He hasn’t taken the role as a CEO of a company that he thought would fail.

When I’ve seen all the companies below the waterline of the iceberg be known above the waterline and selling their products the SP will be awesome. So my $10 price I think is quite realistic!

Cheers all!

I think your 10 dollar price is way too cheap. we got to $2.34 on mercedes news I can just imagine what price would hit when revenue come from an Ip deal with them. Then add all the other goodies coming our way. I say 20 bucks minimum in the future.

 

[Pappagolla]

Hi @DingoBorat & @Diogenese

I have enjoyed your discussion but you both have fallen under the economic rationalists spell.

If you put a value on human life as opposed to valuing human life and every living creature then the cost of maintaining a healthy environment capable of sustaining life can be an economic argument.

For example a human life is worth $1.00 solution ‘x’ costs $2.00 not economically viable.

Human life is worth $1.00 solution ‘y’ costs 50 cents saving 50 cents economically viable.

This is the economic rationalist approach to the debate around solutions it has to be economically viable.

On the basis of this approach in 20 billion years extra terrestrial life will call by Earth and find a time capsule in which will be a letter addressed to To: ‘Whoever might find this’ stating:

“We the former governments and its inhabitants of this planet we named Earth are now extinct.

Our extinction was an economic decision as the cost of continuing to exist as a species did not make economic sense and would have involved the taking on of debt and not being able create a balanced budget.

We opened a tender process to the market however private enterprise was unable to find a sustainable business model that made it economically feasible to save humanity.

Accordingly the only sensible economic decision was to wind up the business of humanity here on Earth.”

There was a time before the economic enlightenment when governments took on the uneconomic provision of services to the populous because it was believed that is why governments existed.

The people expected that the postal service, public transport, the supply of power, sewerage, water, roads, health care would never be profitable and should be provided to all people by government regardless of politics.

The present debate around climate and economically viable solutions is macabre in the extreme.

My opinion only DYOR
FF

AKIDA BALLISTA

Great post but ET will have to get a wriggle on because the Sun is set to supernova well before 20 Billion AD.

 

[Stable Genius]

I think your 10 dollar price is way too cheap. we got to $2.34 on mercedes news I can just imagine what price would hit when revenue come from an Ip deal with them. Then add all the other goodies coming our way. I say 20 bucks minimum in the future.

I like to be conservative!

My motto is to plan for the worst and hope for the best.

 

[Rise from the ashes]

I like to be conservative!

My motto is to plan for the worst and hope for the best.

Nothing wrong with that train of thought. I'm always thinking of what could go wrong and then plan to avoid the headf&#^$ in life. Of course things come out from the sideline and shit on my parade on ocassions though.

 

[Rise from the ashes]

Just for interest I found a video recording of the ASIS interiew.

 

[Rise from the ashes]

 

[stuart888]

Enjoyed this Spiking Neural Network with Unsupervised Learning overview. They are trying to make a Wearable Device that monitors Heart Patterns (brain monitor). They convert analog EKG signals to Spikes and make decisions when to alert the patient/nurse/doctor of an issue.

I like that she is referring to a specific Use Case here, when explaining how they are attacking the problem using SNNs, with unlabeled data, and at the far edge. I posted the video when it really starts, skipped the intro where she says she has been working on Neural Network solutions since 2004, and SNN since 2009.

 

[Rise from the ashes]

Michael Beyeler posted on LinkedIn

Michael Beyeler posted on LinkedIn

www.linkedin.com

 

[Slymeat]

This is not intended for any specific member - just a general warning. I feel I need to point out that this is an open-public forum—you don‘t need to login to read it. ANYONE can view our posts, even robot readers.

I am seeing posts in which people are sharing some information that really should be kept private, and others asking for the same sort of information to be disclosed. Please refrain from doing this!

I know we all feel like we belong to an extended family, but just remember that our family is sitting naked, outside, and with some malevolent entities watching our every move.

Remember, identity theft is real and there are bad people in the world.

 

[Rise from the ashes]

That's a very good warning mate which should not be brushed off lightly. Criminals know that stock forums have members that have plenty of money flowing.

 

[Rise from the ashes]

An oldie but a goodie.....

 

[stuart888]

Watching Nicola Kasabov speak on what Brainchip Akida provides, SNNs, which he says is the Third Generation of Artificial Neural Networks. PVMD was ahead of many massive companies, with huge budgets. Amazing forward thinking.

At some point, unless you are working in this field and actually coding in Python, learning can only be at a high level. Which is fine, as putting neural science smarts using electrical engineering is just too deep for me to understand the actual implementation techniques. And those would be the Trade Secrets folks were talking about. A lot of that would be the specific Brainchip built function libraries encrypted in the IP.

These videos to me, just reinforce how every single major Integrated Circuit and Semiconductor company is chasing Brainchip. We are winning the race for a huge multidecade growth of Smart Edge Sensor Boards (tinyML).

When I put "Nikola Kasabov Brainchip" in google, lots of Brainchip patents and employees come up.

 

[Dhm]

Still sober, Bowmore only gives you a wee dram to taste.
Others have made this point, but it bears repeating and emphasising because it encapsulates our absolute advantage over all others. First it was IoT and we understood all ’things’ or appliances could receive or benefit from either 4G or 5G. But we are different. We are the AIoT, and this so much more dominant, efficient, safe, secure, private, dependable, life saving, and years ahead of any other dream our competition pretends to have.
We are delivering, now, the artificial intelligence of things and it will become, in the near future, ubiquitous. What a lovely word, it is even fun to say… u b I q u i t o u s. We are delivering to virtually all edge products and situations the ability to be uniquely INTELLIGENT in its decision making process. To learn, and to decide as a result how to deliver the most intelligent solution for problems that the edge product is confronted with. Without the internet. These solutions may save you from being hit by a car, or alert you instantly when a specific person is identified or hundreds of other intelligent solutions.
Golf tomorrow at Machrie on Islay. Can’t wait.

 

[Rise from the ashes]

Another good read for when you have spare time.

https://www.researchgate.net/publication/327622476_Rethinking_the_value_chain_A_study_on_AI_humanoids_and_robots_-_Artificial_Intelligence_Possible_business_application_and_development_scenarios_to_2040