18 August 2025
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Commonwealth Bank's recent decline from its $190 peak may signal the beginning of a long-anticipated rotation out of the major banks, according to Shaw Partners Senior Investment Advisor Adam Dawes. Speaking on Switzer TV, Dawes highlighted the winners and losers of the most recent earnings season.
Banking Sector Rotation The Big Four banks are experiencing divergent performance, with CBA facing pressure from its premium valuation while Westpac and NAB attract relative interest. Resources stocks have been driving market gains, with fund flows shifting away from financials for the first time in months.
CBA's recent full-year result showed solid fundamentals with a NIM of 2.08% and healthy CET1 ratio of 12%, but the stock's 20+ times P/E ratio and sub-3% yield are drawing scrutiny from investors seeking value.
Reporting Season Highlights Telstra delivered an in-line result but faced selling pressure despite its defensive utility characteristics. Wesfarmers remains a concern for analysts, with Dawes warning the stock is "priced for perfection" ahead of its upcoming report.
Growth names Car Sales and REA Group posted solid results, with Car Sales benefiting from increased international revenue exposure. However, packaging giant Amcor surprised with weakness following what appeared to be a reasonable result.
Dawes highlighted MA Financial (ASX: MAF) as a potential beneficiary of the current environment. The second-tier lender focuses on businesses that major banks no longer service, positioning it to capitalize on credit market dynamics.
CSL's Wednesday result is viewed as crucial for the healthcare sector, with expectations high following strong performance from sector peer ResMed.
The program also featured insights from Paul Black, CEO of $115 billion investment manager WCM Investment Management, who emphasized the importance of corporate culture in investment selection. WCM's approach involves extensive research into company cultures and employee satisfaction as key indicators of long-term performance.
The firm has identified opportunities in aerospace (aging global aircraft fleet), European defense (increased military spending), and technology names like AppLovin, which is expanding its AI-driven advertising platform from mobile gaming into e-commerce.
This article is based on expert commentary and should not be considered personal financial advice. Investors should conduct their own research and seek professional guidance before making investment decisions.
