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This week…

• Review of top 20 ASX stocks• Banks vs Resources• Which sectors are pushing

the index

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General Advice & Risk Warning

Please note that any advice given by Invast staff is deemed to be GENERAL advice, as the information or advice given

does not take into account your particular objectives, financial situation or needs.

Therefore at all times you should consider the appropriateness of the advice before you act further.

CFDs and Forex are leveraged products and carry a high level of risk and are not suitable for everyone. You can lose

more than your initial deposit so you should ensure CFD and Forex trading meets your investment objectives. We

recommend you seek independent advice. Strategies and charts used in this presentation are for example only. You are

reminded that past performance is not indicative of future performance.

Invast Financial Services is regulated by ASIC. It's important for you to read and consider the relevant Product

Disclosure Statement and Financial Services Guide which contains details of our fees and charges before you decide

whether or not to acquire any financial products. These documents are available at www.invast.com.au

Invast Financial Services Pty Ltd ABN: 48 162 400 035. Australian Financial Services Licence No.438 283

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This week we look at the following topics:

• Review of top 20 ASX stocks

• Banks vs Resources

• Which sectors are pushing the index

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Dear Readers,

Firstly, happy Easter to you and your family. We hope andtrust you had a nice and relaxing holiday period. To recap, wespent the month of March covering major global indicesincluding the German DAX, UK FTSE, S&P500, ASX200 andHong Kong’s HSI50 index.

The Invast sales team has been talking to many subscribers,clients and visitors to our events and website throughout thepast few weeks and your feedback has suggested a stronginterest in more commentary on Australian listed shares.

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This is no surprise since Invast launched a very competitive and advanced DirectMarket Access (DMA) CFD offering earlier this year. The platform allows for trading onseveral major global exchanges. Our focus in April will be on ASX listed shares and wehave plenty planned. We will be covering the Top 80 listed companies in Australiaover the next four weeks. That’s right, 80 stocks in one month! There aren’t too manybroking firms in Australia who can commit to covering 80 stocks in one month, but wealways raise the bar higher at Invast and meet our client’s request with the highestquality service.

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Our analysis will be based on the largest to smallest of the top 80 stocks in terms ofmarket capitlisation. This will be broken up as follows:

Week commencing 6 April 2015: Stock 1-20 on the ASX 200 Week commencing 13 April 2015: Stock 21-40 on the ASX 200 Week commencing 20 April 2015: Stock 41-60 on the ASX 200 Week commencing 27 April 2015: Stock 61-80 on the ASX 200

Week commencing 6 April 2015: Stock 1-20 on the ASX 200

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In order to analyse 80 stocks in one month, our format will be slightly different thismonth. We will provide a table with 20 stocks each week, ranked based on marketcapitalisation. We will include their index weighting, the name and ticker code andthen a separate paragraph box outlining our key conviction. This box will be direct andto the point, we won’t waste any time in providing you with factual information thatyou can easily figure out for myself either on the DMA platform or via a Google search.Our focus in content will be on our opinion. We believe this is what traders are reallyafter!

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ASX Top 20 ASX DMA CFDs image courtesy of Invast IRESSTrader

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1) Stock: Commonwealth Bank

Weighting: 10.3

Comments:

Continues to go from strength to strength. CBA came out with a good clean result inFebruary and the pressure is now on its peers which have a March balance end andreport in May. The big question is sustainability. We haven’t made a secret of the fact thatwe don’t like the Australian banks at current levels, CBA is the highest quality but also themost expensive.

It really depends on investor preference. We prefer Westpac at current levels but only ona very short term basis. CBA scaling $100 per share reminds us of Macquarie Bank at thesame levels prior to the GFC. Be careful.

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2) Stock: Westpac

Weighting: 8.2

Comments:

Westpac has been lagging in terms of its reported results over the past few years, mainly withlower than expected rises in revenue. That might change though next month. Like ourcomments on CBA, we think the risk to reward price on the Australian banks at the moment isnot attractive.

They are in a huge upward trend and this is a result of a lower interest rate environment. Butthe music will stop one day, perhaps sooner than what everyone expects. For those intent onchasing banks in the short term, Westpac probably provides the greatest upside in terms ofsurprising the market given its exposure to the booming Australian residential mortgage space.

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3) Stock: Aust & NZ Bank

Weighting: 6.8

Comments:

Those who read our Insights reports regularly will know that we have been sounding caution over ANZ’sAsian growth strategy for a little while now. We like it over the medium to long term but we think therewill be some short term pain.

The proof will be in the pudding next month when they do report. We wrote more than a year ago thatour preference is to enter at around the $28 per share level, which seems ridiculous but not impossible.

We reiterated this in February during reporting season. We suspect that ANZ and NAB will be thedisappointers next month, with WBC the standout. CEO Mike Smith has been founding caution onAustralian asset prices, which is a little unusual for a bank CEO, maybe he wants to divert attention awayfrom problems in Asia?

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4) Stock: BHP Billiton Ltd

Weighting: 6.5

Comments:

We wrote about this on the Invast blog this week, check out blog.invast.com.au – innutshell, we still think that BHP is too expensive at current market prices and there isnothing on the horizon that can see us changing our mind.

Iron ore and energy prices remain depressed, the former continuing to fall most of lastweek. Eventually there will need to be a reality check on BHP’s balance sheet. We preferto enter the stock in the mid to low $20’s, let’s see if it gets there.

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5) Stock: National Australia Bank

Weighting: 6.2

Comments:

NAB always has a problem. First it was the foreign exchange losses, then the sub-primemortgage woes, then the UK banking problems and now potentially a fallout in itsfinancial planning division which has become a very important earnings generator,particularly during a period where UK problems ate into the earnings base.

Not only do we have caution on the Australian banks, we have long term doubts overNAB’s ability to change its culture and reinvent itself. A complete Avoid and perhaps evena good short at current prices if we see a better than expected financial result nextmonth.

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6) Stock: Telstra Corp Ltd

Weighting: 5.1

Comments:

Telstra has been an excellent performer over the past few months. We were strong advocates ofthe stock back in August and the share price action has been amazing. There is a lot to watchthough.

The competitive landscape is quickly changing. The NBN and streaming content like Netflix & co isan area that Telstra has pre-emptively moved in might it could come at a cost to its revenuestream, much in the same way that the PSTN fixed line network became a drag for many years. It’sin a bit of a transition period, we need to see a rock solid result in order to appease theseconcerns. The share price looks as though it has run its course and so we wouldn’t be buyingunless we see this solid result in August. Could trend lower between now and then.

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7) Stock: Wesfarmers Ltd

Weighting: 3.2

Comments:

In a period of economic uncertainty, one thing really matters and this is goodmanagement. Good managers can withstand challenges and turnaround their businessfor ultimate success when the cycle turns.

During boom times, many businesses look good but it is in tough times that really goodbusinesses shine. We feel that Wesfarmers is starting to show this. Our view is changingto one that is more positive. This is one of the highest quality names in the country. It’sthe people that count. Moving higher on our list to become a buy in the low $40 range.

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8) Stock: CSL

Weighting: 2.9

Comments:

Similar comments to the above. Many have played CSL as a currency exposure, but we thinkthere is definitely something a lot more fundamental here. There have been challenges andmany analysts have pounced on these as reasons not to buy the stock. We think these aregrowing pains for what has been an amazing story.

Probably a bit too expensive now, but it comes down to your preference. Are you a momentumtrader or contrarian value investor? This is only important for judging your entry point. Bothsides will agree that this is a quality name that is likely to continue going higher and it takes alot of courage to stand in its way. Hopefully it becomes the largest stock on the Australianmarket. Well deserved, we like it.

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9) Stock: Woolworths Ltd

Weighting: 2.4

Comments:

A lot of questions to answer here. Again, it’s about having the right people. Woolies has been anexception for many investors and often described as a wide moat company but my expert analysts.We even added it to our top 6 stock picks for 2015. We do sense though that management is startingto feel a little less confident and the wording in statements and results are starting to worry usslightly. There is a real risk that Woolworths falls away as a business over the next decade.

BUT, and very importantly, it is still a market leader and back by a growing property portfolio. It’s notjust a retailer but also a property owner. If this was to change, our patience would go out the door.We’re still trying to figure Woolies out, no immediate alarm bells but if there isn’t a confidence gamechanger soon, we could potentially see this as the worst performing in our 2015 stock pick list.

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10) Stock: Macquarie Group Ltd

Weighting: 1.7

Comments:

A lot of positive momentum here and a lot of hard work has gone into making Macquarie a moremain stream organisation following the GFC. Once described as the millionaire’s factory, Macquarie isnow a sensible financial services organisation with a savvy eye for changing technology andconsumer habits.

It no longer has the tag as financial engineers or opaque products, it has successfully morphed itselfwith a few challenges like the financial planning fallout still to be completely addressed. Macquarie islikely to continue riding up the technology curve and could become a tech stock in the next 10-20years, having been born out of a financial organisation. We’re starting to like this more than themajor banks should asset prices come back and inflation temper the RBA’s rate cutting cycle.

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11) Stock: Rio Tinto Limited

Weighting: 1.6

Comments:

Avoid like BHP. Rio Tinto has a history of destroying shareholder value and the recent ironore price plunge provides no immediate reason at all to be buying or holding the stock.Avoid the value trap, this isn’t a business which is likely to report good free cashflowprojections over a long period of time and like our view on BHP, the balance sheet willeventually fall victim again to write downs. Not the time or place now to be in yourportfolios.

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12) Stock: Woodside Petroleum

Weighting: 1.6

Comments:

Timing is everything here. There is no doubt that Woodside has the best quality energy assets in Australia, ifnot the Asian region. It also has a history of success behind it, there aren’t too many companies that canboast both. But we don’t know when energy prices will turn and this is a major factor. We could witness aprolonged period of depressed energy prices, which would put pressure on Woodside’s returns like we havestated for BHP and Rio Tinto.

If you have a view that energy prices need to recover, to reflect the true demand/supply picture, then thereare very few comparable exposure you would want in your portfolio to Woodside. If you are though sittingon the fence, a believer in the end of oil consumption as the world moves to other alternative sources (wearen’t of this view) then Woodside isn’t something you would want to rush into. For now, we are happy tosit on the fence and perhaps move to a buy if we see the stock in the high $20s or low $30s range.

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13) Stock: Scentre Group

Weighting: 1.3

Comments:

Many dismiss this stock as being exposed to inflated Australian property prices. One thingto note though is that prime retail space is always in demand. Note that the two keywords here are PRIME and RETAIL. This isn’t true for any retail, only for prime retail inwhich Scentre is a standout exposure. Property cycles come and go but Westfield/Scentrehas seen many and will no doubt be around for many more decades to come. The onlyquestion is investment returns, which we feel are better suited in WFD with internationalexposure. That is our preference.

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14) Stock: AMP Limited

Weighting: 1.2

Comments:

AMP has rode the coat tail of the financials boom in recent years and is no doubt in abetter place than where it was two years ago. There are still big questions over thecomposition of its earnings and the balance sheet exposure it has towards its legacyinsurance business. With the government making noise around the life insuranceindustry, investors moving money out of traditional funds and the huge technologyimplications of the whole financial services space, we’re unlikely to see AMP re-ratingunless it can come out with a game changing product or image which helps re-rate it froman old and tired wealth/insurance firm to a new age financial services model, likeMacquarie for example.

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15) Stock: Westfield Corp

Weighting: 1.2

Comments:

Our preference property exposure. Westfield carries a global brand, it has become adestination brand much like auto brands, fashion labels and beverages. People aroundthe world – particularly the developing world, want western brands and Westfield is awell-known, highly regarded retail brand. The property portfolio underpins the valuation,again we are not just talking about a bunch of retail locations but prime, a-grade sites insome of the world’s most desirable cities. Long term results speak for themselves, one ofour top Aussie stock picks.

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16) Stock: QBE Insurance Group

Weighting: 1.2

Comments:

Making all the right noises recently. We could see positive momentum for the next fewyears but eventually the insurance cycle will turn and this is inevitable. Still, for thoselooking at a short term trade, QBE could continue surprising to the upside for the rest ofthe year after being a dog for so long. The currency is something to watch, we don’t seethe Aussie dollar rallying anytime soon so there will be traders who see QBE as a counterAussie dollar exposure for some time.

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17) Stock: Transurban Group

Weighting: 1.2

Comments:

One of the big implications of the huge amount of monetary stimulus right around the world is the price pressure oninfrastructure assets. More money going around the world puts upward pressure on roads, bridges, ports etc when they areexchanged or sold between private owners.

Transurban is in an excellent position, it has some of the most attractive infrastructure assets in the region. Unfortunately,the share price has always reflected this and there is very little value in the stock, particularly if interest rates start to rise inAustralia. It could even become a short candidate because these types of businesses tend to fall into problems when ratesrise, not necessarily because of their assets but because of the gearing structure they put into place to find their assets.

Management has been working hard over the past few months to secure not only cheap money but over a long period oftime, with long maturities, in order to minimize. Still at the mid $9 per share range, there is definitely not much value for atrader here on the upside and possibly some on the downside if there is a change in domestic rate expectations towards theend of this year.

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18) Stock: Brambles Ltd

Weighting: 1.2

Comments:

Has completely turned things around. There was real doubt in the market a couple of years agoaround the long term viability of this business model. But Brambles has put its head down andworked hard to ensure its relevance. It is reaping rewards now, particularly offshore.

Management deserves a big pat on the back, it’s hard to bet against the share price trend atthe moment. The stock has returned around 26% over the past year and so this rate of growthcould start to moderate towards the middle of 2015. We would look to re-enter thoughanywhere in the low $10 per share area if we are afforded that opportunity. Until then, thetrend looks very impressive and underpinned by some hard work with perhaps a touch of luck.

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19) Stock: Suncorp Group Ltd

Weighting: 1.1

Comments:

Suncorp has become a credible alternative to the big four banks in terms of investorsgetting exposure to the sector. It has cleaned itself up since the GFC but the culture ofwriting questionable risk during boom times will never completely go away. We don’thave the same optimism about Suncorp as we do for Macquarie for example, but wedon’t diminish its attractiveness either. We feel that the stock will at some point besubject to corporate activity, by who or for what price we have absolutely no idea. We dothink this year might see more M&A activity after Toll’s acquisition for example, so itshould perhaps be on every trader’s watch list. Do remember though it also faces thesame problems as the big banks when rates start to rise.

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20) Stock: Amcor Limited

Weighting: 1.1

Comments:

We have never been fans of Amcor in terms of its fundamental industry exposure, but theshare price speaks volumes, up an amazing 40% plus over the past year. Many factorswhich can work against the business have actually been working in their favour over thepast year or so and at the end of the day management has started to yield results of avery complicated and long turnaround during the past decade. The results are coming in,like Brambles we need to acknowledge the good work by management here and thetrend is hard to dismiss. Looking good in the short term, again we would be adding on anyshort term pullback.

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Next week, we will be reviewing stock 21-40 on the market. These stocks are:Insurance Aust Group, Origin Energy, Sydney Airport, Stockland, Newcrest Mining,Aurizon Holdings, AGL Energy, APA Group, Goodman Group, Caltex Australia, LendLease Group, Ramsay Health Care, Oil Search Ltd, Sonic Healthcare, ASX Ltd, GPTGroup, Mirvac Group, Qantas Airways, Resmed Inc. and Orica Limited.

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Outlook Australian stocks – 80 stocks in April!

Invast Insights chief editor and contributing author Peter Esho will spend the month of Aprilreviewing the top 80 stocks listed on the Australian stock exchanged. Esho will document his findingsbased on the performance of key stocks over the recent reporting season and where he believes thebig opportunities lie throughout this year. His presentation will focus on the following themes:

Winners & losers from the low Australian dollar Impact of interest rates on certain companies Impact of lower energy and commodity prices How technology is impacting Australia

Esho is a regular contributor on CNBC, Bloomberg and host of ‘Your Money Your Call’. His webinar willcover both the fundamental and technical outlook on these key themes and a basic introduction toInvast’s new DMA CFD product offering which complements MT4 and other services. This webinar isexpected to fill fast. Q&A will be open straight after the presentation. Register now by Clicking Here.

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Go to www.invast.com.au/insights to get a complimentary 4 week trial and receive the latest insights as they are published to our live clients.

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DisclaimerPlease note that you are receiving this report complimentary from Invast Financial Services Pty Ltd(AFSL 438 283). Invast staff members may from time to time purchase securities which areincluded in this or future reports. The authors of this report may or may not be holding a positionin the securities mentioned. Please note that the information contained in this report and Invast'swebsite is of a general nature only, and does not take into account your personal circumstances,financial situation or needs. You are strongly recommended to seek professional advice beforeopening an account with us.

General Disclaimer: This newsletter contains confidential information and is intended only for theperson who downloaded it. You should not disseminate, distribute or copy this newsletter. Invastdoes not accept liability for any errors or omissions in the contents of this newsletter which ariseas a result of downloading this newsletter. This newsletter is provided for informational purposesand should not be construed as a solicitation or offer to buy or sell any financial product. InvastFinancial Services Pty Ltd is regulated by ASIC (AFSL 438 283 | ABN 48 162 400 035).

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Risk Warning: It's important for you to read and consider the relevant Product DisclosureStatement, and any other relevant Invast Financial Services Pty Ltd documents before you decidewhether or not to acquire any financial products listed in this email. Our Financial Services Guidecontains details of our fees and charges. All these documents are available here on our website, oryou can call us on +612 8036 7555. CFDs and Foreign Exchange are leveraged products and carry ahigh level of risk and you can lose more than your initial deposit so you should ensure CFD andForeign Exchange trading meets your personal circumstances.

General Advice Warning: Being general advice, this newsletter does not take account of yourobjectives, financial situation or needs. Before acting on this general advice you should thereforeconsider the appropriateness of the advice having regard to your situation. We recommend youobtain financial, legal and taxation advice before making any financial investment decision.

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