Pay close attention to trading updates this AGM season

Want to know how deteriorating economic conditions created by central bank tightening will impact the earnings of the stocks you own? Then take note of the trading updates companies make this AGM (annual general meeting) season and investor days which run over the next six weeks.

It’s also worth noting that AGM season coincides with results from the major banks plus a cluster of industrial companies with 30 September end of year balance dates.

Remember, your participation at what used to be sedate town hall-type AGMs is now a lot easier given that companies are now required to help remote shareholders participate via hybrid meetings.

Virtual attendance

In short, shareholders who couldn’t attend in person during covid could do so on-line, and recent changes to the Companies Act means on-line AGMs are now a permanent option.

Given that AGMs have in recent years become blood-sports, where agitated shareholders have a rare opportunity to put the board and management on the spot with tough questions, these events are becoming increasingly popular.

As a case in point, attendance at AGM’s increased during the pandemic, resulting in a 36% jump from 2019 to 2020 at Computershare (ASX: CPU) facilitated AGMs.

Heightened shareholder voting on-line is also a wakeup call for scandal-ridden companies with governance, ESG or other issues that may prompt protest votes against the board and/or its remuneration proposals.

Weaker trading environment

With consensus expectations suggesting earnings growth for the S&P/ASX 200 will slow from around 23% in FY22, to 5% in the current financial year, shareholders can be expected run a fine-tooth comb over AGM updates.

Then there’s the benchmark 2-month forward price-to-earnings ratio which has fallen to around 13 times, retracing from a cyclical peak of nearly 19 times.

Given the changing spending habits of Australians, courtesy of inflation and rising interest rates – with mortgages commanding more of the household budget – shareholders are also expected to scrutinise upcoming trading updates from consumer-facing businesses.

Four AGMs to keep an eye on

AGL Energy (ASX: AGL) 15 November: Billionaire Mike Cannon-Brookes who owns 11.2% of the company has been vying for four new candidates for the board.

Magellan (ASX: MFG) 20 October: While Magellan may disclose a rehashed strategy, what the market wants to see is sweeping changes covering the multiple issues within the business and changes in management and governance practice.

Myer (ASX: MYR) 10 November: The spotlight should be on Solomon Lew’s Premier Investments with the Myer board having previously challenged the major shareholder to make a full takeover rather than incrementally buying more shares.

Star Entertainment (ASX: SGR) 22 November: While the casino operator is fighting to keep its casino licences in Qld and NSW, some brokers expect the company to report a strong trading update.

Retailers and travel

In light of strong employment numbers and consumer spending, which has held up better than expected, investors should watch closely trading updates during the upcoming AGMs of retail and travel stocks including:

• Woolworths (ASX: WOW) 26 October

• Coles (ASX: COL) 9 November

• Endeavour Group (ASX: EDV) 18 October

• Wesfarmers (ASX: WES) 27 October

• Harvey Norman (ASX: HVN) 24 November

• JB Hi-Fi (ASX: JBH) 27 October

• Flight Centre (ASX: FLT) 14 November

• Seven West Media (ASX: SWM) 10 November