Hyperion portfolio manager Justin Woerner said with the mining sector experiencing 8.2 per cent growth and dividends per share at 13.8 per cent investors may be tempted to become overweight in mining stocks.
Mr Woerner said despite the positive results, investors need to be “sector agnostic and instead look for quality businesses leveraged to growth, with predictable and growing earnings streams”.
“It’s these companies which will provide the next great opportunities to capture growth,” he said.
Mr Woerner believes there are many opportunities outside the mining sector that investors should consider, especially with the predicted slowing of the mining boom becoming a reality.
"At Hyperion we think online stocks, such as REA and SEEK, will continue to grow, and we believe there is a strong outlook for non-bank financials,” said Mr Woerner.
He said the REA Group has continued to perform strongly with a 37 per cent increase in earnings and a 30 per cent increase in Australian revenue.
“REA’s market-leading Italian operation offers further growth opportunities once headwinds in Europe subside, and we expect that the business will be able to expand margins on top of growing revenue,” he said.
In terms of SEEK, Mr Woerner said the average yield per domestic job ad has increased by eight per cent and that the business has expanded further into the job placement market.
“We believe SEEK is a low-cost business leveraged to global growth and continues to offer a compelling value proposition,” said Mr Woerner.
While Hyperion is underweight in banks, it favours non-bank financials like the Henderson Group.
“The business’ long-term track record and management’s focus on customer service and performance is paying dividends by way of an increasingly strong brand presence and growing assets under management,” said Mr Woerner.
