Educational articles

What does EPS accretive mean?

EPS accretive refers to a situation where an action or event, such as an acquisition or investment, increases a company’s earnings per share (EPS). This term is commonly used in finance and investment contexts to assess the impact of various corporate actions on shareholder value. When a corporate action is described as EPS accretive, it means that the action is expected to increase the company’s earnings on a per-share basis. This increase in EPS can occur through various means, such …

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Why would a company participate in a share consolidation?

Paladin Energy Ltd (ASX:PDN) has recently announced a share consolidation where current shareholders will see ten existing shares become one. This change will increase the share price ten times. We discuss reasons why a company might choose to complete a share consolidation, also known as a reverse stock. Share Price Management: One of the most common reasons for a share consolidation is to increase the company’s stock price. This can make the stock more attractive to institutional investors and may …

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How does a low Australian dollar affect the share market

A low Australian dollar (AUD) can affect the share market in several ways: Exporters Benefit Companies that export goods and services from Australia may see increased competitiveness and profitability when the AUD is low. This is because their products become cheaper for foreign buyers when priced in other currencies, potentially leading to higher revenues and stock prices for these companies. Importers Face Challenges Conversely, companies that rely heavily on imports may face increased costs when purchasing goods and materials from …

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What stocks do well with interest rate cuts?

When interest rates are cut, certain types of stocks tend to perform well. Here are some examples: Rate-sensitive sectors    Real Estate: Lower interest rates reduce the cost of borrowing for real estate companies, making it cheaper for them to finance new projects or refinance existing debt. This can lead to increased investment in real estate, driving up property prices and boosting the stocks of real estate investment trusts (REITs) and property developers.     Utilities: Utilities typically carry a …

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Asset classes and the economic cycles

Different asset classes perform better in different environments.  Investors can optimize portfolio performance by identifying which assets perform the best at certain phases of the economic cycle. In this article, we will go through the different asset classes and outline which economic phase is best to purchase each one. Cash Cash is the lowest generating asset class. This asset class is also considered a safe haven so investors flock to cash when the economy is weak or in a recession. …

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