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This week…

• Review of ASX stocks 21-40• Insurance & Gold• Which sectors you should

focus on

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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 ASX stocks 21-40

• Insurance & Gold

• Which sectors you should focus on

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Dear Readers,

To recap, we spent the month of March covering majorglobal indices including the German DAX, UK FTSE, S&P500,ASX200 and Hong 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 late last 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 capitalisation. 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 13 April 2015: Stock 21-40 on the ASX 200

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Last week we covered the top 20 stocks on the market. These are the most statisticallysignificant for the composition and calculation of the ASX200 index. In order to analyse80 stocks in one month, we are providing a table with 20 stocks each week, ranked basedon market capitalisation. We will include their index weighting, the name and ticker codeand then a separate paragraph box outlining our key conviction.

This box will be direct and to the point, we won’t waste any time in providing you withfactual information that you can easily figure out for myself either on the DMA platformor via a Google search. Please send through any feedback you might have over the nextfew weeks. If there are stocks in which you are particularly fond of, we will cover themin more detail in our individual blog posts.

Our focus in content will be on our opinion. We believe this is what traders are reallyafter!

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1) Stock: Insurance Aust Grp

Weighting: 0.95%

Comments:

The momentum has been here in recent years. One of the things we really like about IAG istheir ability to admit their mistakes in the UK and move forward. That has yielded very goodresults in the past few years, particularly at home where they have been the strongest andhave the most attractive competitive advantage.

The problem with low interest rates though is that competition becomes greater for generalinsurance products and the internet lowers barriers to entry for distribution. IAG needs to bethe consolidator, it needs to take out the competition before it becomes a threat. Shouldremain stable for as long as the market wants exposure to financial stocks. Overall betterquality business than it was years ago.

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2) Stock: Origin Energy

Weighting: 0.83%

Comments:

Energy prices are the obvious problem here and we don’t see things improving anytimesoon. The problem for businesses like Origin is that there is always an argument in themarket that they are ‘cheap’ but looking at earnings in isolation is not the way to valuethese businesses. Returns on investment are much more important. There has been a lotof investments during highly inflated capital cost periods and now the return (revenue) isfalling, so the outlook for this metric doesn’t look great. For this reason, we would beavoiding energy and material stocks for now unless we get absolute bargains.

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3) Stock: Sydney Airport

Weighting: 0.77%

Comments:

Low interest rates means the hunt for stable, well developed infrastructure assets willcontinue to increase. We spoke about Transurban last week. Sydney Airport is anotherperfect example.

Growth comes down to inflationary expectations and we are bullish when it comes to thecost of capital in the next decade or so. Sydney is a prime Asian destination and the assetsunder this group (not just Sydney) are all of a very high quality and extremely wellmanaged. Can’t really fault this for as long as the world hunts for quality, developed,infrastructure in growing regions. Ticks all the boxes.

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4) Stock: Stockland

Weighting: 0.71%

Comments:

Stockland is finally getting its mojo back after a difficult decade. The diversified group means atsome stage in the cycle, there will be assets that perform better than others. At the momentthough, all are performing well. We like the fact that Stockland has become proactive indeveloping its retail assets, something which it didn’t do in the past and fell victim to WestfieldGroup.

It’s now finally starting to catch up, although the success of these divisions will be dictated byhow successful and sustainable the residential part of the market remains. If you’re a housingbull, this is a stock to be in. if not, be cautious. We feel that a game changing acquisition is nowout of the question.

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5) Stock: Newcrest Mining

Weighting: 0.70%

Comments:

Our view on gold is that the marginal cost of production is falling as energy prices reduce theinput costs. As we wrote in our 2015 Outlook Guide earlier this year, we feel that the floor pricecould come down to around US$900 per ounce if the oil price remains at current levels.

In this context, Newcrest has challenges. But it also has scale and a lot of room to win back trustfrom the market. A stable gold price can make a world of difference in a low interest rateenvironment. It will allow Newcrest to pay off its debt and start to win back some of that losttrust. We don’t see it going back to its former levels (maybe not for the next 10 years) but there isroom for share price improvement, even if the gold price falls, if management can restore a senseof confidence and manage its financial obligations without further write-downs.

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6) Stock: Aurizon Holdings

Weighting: 0.70%

Comments:

One of our key stock picks this year. We like the infrastructure angle, it is very difficult itreplicate the network and infrastructure that Aurizon has in place in a period of fallingcommodity prices. Some might argue that lower commodity prices hurt earnings. Weagree, in the short term. But it also discourages competition and this means the relativevalue of the asset becomes greater over a period of time. You really need a long termfundamental view here, but this is how we pick our yearly stocks. It took Toll a long timeto earn the attention of the market and as we saw a few weeks ago, it become a standoutfor foreign investors booking a 50-60% gain on the news of a takeover. Aurizon falls intothe same basket, not so much a takeover target, but a sleeping impressive asset.

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7) Stock: AGL Energy

Weighting: 0.68%

Comments:

We do like the infrastructure angle and see a growing demand for energy, but as we havewritten above, we just don’t feel comfortable with energy businesses particularly thosewith a retail angle like AGL.

We’re probably a bit more impartial than negative here. So we will just give this a pass.

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8) Stock: APA Group

Weighting: 0.67%

Comments:

Bit more positive here for the same reasons as Aurizon. Not so much leveraged to pricesand doesn’t have the complicated arrangements that Origin and AGL have in terms oftheir business mix. At the end of the day, a low interest rate environment meansinfrastructure will remain in demand and this is a high quality, well protected and highlyregarded name. Just need to watch the debt and capital structure in a rising interest rateenvironment.

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9) Stock: Goodman Group

Weighting: 0.65%

Comments:

We’re big fans of this Australian success story. Many people know the success of Westfield butwe think Goodman sometimes goes unnoticed and under the radar. Goodman has a fantastictrack record and in international business, expansion plans can only be achieved on the backoff a strong track record. Goodman has a solid niche, it has s system, a strategy and a very goodcollection of bright and talented people. This makes a world of difference in the propertyspace.

We think Goodman will remain a winner. There are some issues around funding and debt whenrates rise, but there is plenty of diversity in the group and experience from the most recentGFC. Big tick.

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10) Stock: Caltex Australia

Weighting: 0.62%

Comments:

We think the share price has run its course and getting really expensive here. It’s worth noting thatChevron is out, taking its profit and moving on. The Australian Newspaper reports “…Caltex Australialooks set to go after acquisitions more aggressively after Chevron's $4.73 billion exit from the shareregister left it fully independent to pursue its growth ambitions unencumbered by the complexity of acornerstone shareholding.

Analysts said the record block trade of stock allowed Caltex to chase acquisitions that might haveconflicted with Chevron's interests and to raise equity more easily to support investments if required…”

We disagree. We think the stock is just too expensive and a reasonably good time to start selling.

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11) Stock: Lend Lease Group

Weighting: 0.60%

Comments:

If you want to know what Lend Lease really does and does differently, take a walk down Barangaroo in Sydney.The new precinct is a perfect example of why Lend Lease is different to any other property developer. Not onlydoes it now have its own construction arm but it has a history of creating successful, game changingcommunities in which people live. Lend Lease has moved up the scale with Barangaroo and success there willsee confidence flow through into other projects. While on first impressions it might seem like there are manyother competitors, on carefully consideration there aren’t too many.

By moving higher up the chain in terms of product and development size, Lend Lease does open itself up togreater risk. But a counter argument is that the demographic it now seeks to service is not impacted by shortterm market forces and so the stability in development success might work much better. We tend to agree withthe later and we are warming up to the business a lot more, in a similar basket to Goodman Group.

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12) Stock: Ramsay Health Care

Weighting: 0.57%

Comments:

Our preference in the health space is Medibank due to its size, pricing environmentunderpinned by government fee increase allowances, a risk neutralization fund and theupside from becoming a publically listed business.

At some stage Ramsay’s share price becomes ridiculous and we think it’s at the level now.Can we be wrong? Yes.

But risk/reward is still in our favour even if we are wrong in the short term. At least somedirectors are listening to us and selling.

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13) Stock: Oil Search Ltd

Weighting: 0.55%

Comments:

A big avoid for us. Not only do we prefer Australian based assets but we have alreadyextensively written about the return on investment in the energy space. Woodside is ourpreferred pick, not much else to add here. The earnings growth profile looks good, if youcan trust it. We can’t.

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14) Stock: Sonic Healthcare

Weighting: 0.544%

Comments:

Our preference in the health space is Medibank due to its size, pricing environmentunderpinned by government fee increase allowances, a risk neutralization fund and theupside from becoming a publically listed business.

Sonic has a key part to play in a well-diversified portfolio but at the moment we would befilling that spot with CSL.

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15) Stock: ASX Ltd

Weighting: 0.53%

Comments:

As we wrote with Macquarie above, we think the future of financial services is in technology.Some have coined the term “fintech”. Many have written off the ASX’s prospects in recent yearsand pointed to lower barriers to entry, though competitors have not been able to wipe away atmarket share in a meaningful way or seriously threaten earnings. We think the ASX could evolveand become a key exposure in the fintech space, edging out its wealth management customers atsome stage and becoming a benchmark for asset reporting and administration. Think MacquarieWrap of the future but with an ASX brand. Perhaps this is a little too out there. Maybe. Our pointthough is don’t doubt the ability of this business to significantly become a high value exposure asthe whole concept of a financial exchange becomes less relevant. Fintech is the game.

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16) Stock: GPT Group

Weighting: 0.53%

Comments:

Perhaps more stable and passive, the size of this group brings it here in terms of marketcapitlisation. Similar argument to the infrastructure plays but there just seems to be a lackof excitement for us.

We prefer more diversified groups with earnings growth potential, businesses that havethe potential to change lives and sell a story to investors. We feel that GPT lacks this.Having said that, a very high quality portfolio underpins the stock price. If you like niceand simple, this is probably more for you alongside Westfield.

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17) Stock: Mirvac Group

Weighting: 0.49%

Comments:

Probably a step below Lend Lease and a step above Stockland. This is the best way we couldsummarise Mirvac. There is a lot more exposure to domestic residential property here, eventhough developments are a lot more de-risked now with the way pre-sales are managed.

Still if the market dries up, there will be a big earnings whole. For this reason, we think it’s bestto just trade up to Lend Lease or sideways to Goodman Group. Being stuck in the middle issometimes difficult when the market turns.

Some good success in developing office assets in Sydney CBD, but the residential whole is stillthere if things turn and hard to plug.

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18) Stock: Qantas Airways

Weighting: 0.48%

Comments:

Finally some good news here. Qantas is really a casino on the oil price. After struggling for many years, thingshave finally started to move in its favour and it looks like it can enjoy the benefits for some time. We added thestock to our 2014 Outlook Guide list and it was the best performer in the portfolio, more than doubling.

We took it out this year because at the end of the day it is an airline and its luck can only stay strong for so long.Eventually there will be another problem at some stage and there will be a huge amount of negativity, whichmight prompt us to enter the stock again. Until then, there is still a lot of hard work that needs to be done totransform the airline.

It needs to figure out where its core domestic business is heading and see if it can really capitalise on itspremium Asian status in a way that generates strong earnings after years of large international losses.

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19) Stock: Resmed Inc

Weighting: 0.47%

Comments:

Like CSL, we like this stock because it changes people’s lives. There has been a slowdownin momentum recently and as usual here are those that doubt the valuation. One thing tonote though is that Resmed is a lot more aligned to US biotech stocks and it will always bevalued with these peers, rather than Australian listed industrial stocks. For this reason itneeds to continue kicking goals and posting strong earnings, otherwise it will become abit of a case in missed opportunity. Some other bright spark could come out with better,quicker and cheaper technology. It’s a big IF but a real threat in business. Success isneeded in the short term more than ever.

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20) Stock: Orica Limited

Weighting: 0.47%

Comments:

Very high quality business in the space it operates. We just don’t like the space. At theend of the day management is the single most important part of a business and this is runby some very smart people but there will be a time to get onboard, it’s just not now withso much uncertainty around bulk commodities and the overall state of explosive markets.The new CEO brings with him a sense of hope together with a new business structure, butwe prefer to see results first before easing our assumptions.

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Next week, we will be reviewing stock 41-60 on the market. This is a really exciting part ofthe market. Many companies here go under the radar and are not statistically significant tothe overall composition of the index. But there are great opportunities here and some ofthe most exciting businesses. As the Australian market changes over the next few years,these companies within the 41-60 bracket could become much more significant. They arelikely to grow through merger and acquisition activity and potentially add to what theASX200 really needs – diversity in market capitalisation exposure.

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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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