Tag: sharemarket

Wry & Dry #24 of FY-24. Brainless and invertebrate. “Keep it up-vibe…” Trusts’ tax.

It’s obvious. The Prime Minister doesn’t have a spine. And the Leader of the Opposition doesn’t have a brain.

If Readers hadn’t already drawn this conclusion before spending the summer swimming in the pristine waters of Port Phillip Bay or safely in Sydney Harbour, then the new year’s emissions of cant and idiocy from these two icons of incompetence will have settled any doubt.

Wry & Dry #17 FY-24: China. Keating. Anti-Semitism.

Some weeks ago, Wry & Dry suggested that the incoming head of the Productivity Commission Ms. Michelle Wood might get the DCM before starting her job. Her then sin was proposing an inheritance tax.

Wry & Dry mused then that perhaps she suffered from RDS. Proposing an inheritance tax certainly got the headlines.

But then on Wednesday, she again put her head above the parapet.

Wry & Dry #16 FY-24: Trumpster: diary. Anti-Semitism mask. Albo’s straining belt buckle.

Saturday: Florida. Played golf with some champion golfers. An Irish fella called McIlroy, a chick from South Korea, Jin Young Ko and a bloke named Tiger something. I WON!

Sunday: New Hampshire. Spoke at a rally. Told them “I don’t mind being Nelson Mandela.” I am willing to GO TO JAIL to defend democracy. Mandela was a patriot, like me. India should be proud of him.

Monday…

Wry & Dry #13 FY-24: Disaster: Chairman Dan’s DCM. Trumpster the fraudster. PwC.

In a DCM-move that surprised many, Chairman Dan gave himself the DCM on Tuesday. This is a disaster of great magnitude.

Cartoonists all over Australia have lost a subject that yielded the Everest of political satire and ridicule. They feasted on the opportunity provided by arguably the most hated politician since Julius Caesar, whose DCM, unlike Chairman Dan’s, was not self-inflicted and caused by 27 knife wounds from six grumpy conspirators.

Emboldened by his own outstanding oratory and aided by an Opposition as weak as the Wallabies and as divided as post-war Germany, a fawning media and an upper house cross bench that were easily bought, he bestrode the political world like a colossus.

Wry & Dry #7 FY-24. “No child will live in poverty.” Trumpster the mobster. VinFast what?

When the Indians are circling your wagon, the lessons of Politics 101 are clear. Divert attention away from the Indians until the cavalry arrives. What better diversion than a big, ‘nation building’ policy.

Former PM Bob Hawke was a master at this. Readers will remember either of “no Australian child will live in poverty” and/or “we will plant one billion trees.”

Wry & Dry #5 FY-24. Trumpster smashes own record. Phoenix Team. US credit downgrade.

What proud citizen of the USA would not want a president who admitted to a business relationship with a porn start? Really, it’s about free speech. And free trade.

Or one whose high intellect and sense of history meant that building a personal library of really historic documents was really understandable.

And now, conspiracy. Really? What’s the fuss? Who in politics hasn’t conspired before, during or after office?

Profit Reporting Season Concludes – Steadfast, Johns Lyng, Healius/ACL and Bapcore

This week, the Q2 ABS National Accounts data were released on Wednesday. Although a little backward-looking, the National Accounts can provide corroborative evidence of the trends we see from the company reporting season.
In this week’s Investment Matters, we will briefly discuss interesting trends from the reporting season and outline the results for Steadfast Group (SDF), Bapcor Group (BAP), and the new portfolio positions in Healius (HLS) and Australian Clinical Labs (ACL).

Reporting season continues – Worley, Inghams, Earlypay, Ventia and Woolworths

The BlueScope results clearly distinguished between short-term operating conditions and medium-term value creation. Like the Seek result discussed last week, we have been pleased to build a position in this company at a reasonable price when short-term conditions are challenging while the company invests in long-term improvements. 

Read this week’s Investment Matters as Craig explains reporting season results from Bluescope, Judo Bank, Reliance Worldwide and Cleanaway.

Reporting season continues – BlueScope, Judo Bank, Reliance Worldwide, Cleanaway

Image from khunkorn Via Canva

The BlueScope results clearly distinguished between short-term operating conditions and medium-term value creation. Like the Seek result discussed last week, we have been pleased to build a position in this company at a reasonable price when short-term conditions are challenging while the company invests in long-term improvements. 

Read this week’s Investment Matters as Craig explains reporting season results from Bluescope, Judo Bank, Reliance Worldwide and Cleanaway.

Reporting season continues – Seek, Seven Group Holdings, Beach Energy and Nufarm

Most companies who have an accounting year-end date in June, select August as the month to report their full year results. We’ll provide updates in Investment Matters over the course of the next few weeks. Here’s a snapshot of results reported in the week just past for stocks held within client portfolios.
A weak US employment report on Friday 2nd August added to the level of uncertainty. 

For market participants the principal task was determining whether the level of dislocation was indicative of sharp changes in a relatively narrow set of conditions, or whether concerns were much broader and more permanent. 

By the end of the week the outlook was much clearer and markets across the globe recovered much of their losses. This was especially the case in Australia where the markets are now only slightly down a year-to-date basis. More importantly measures of uncertainty such as the US VIX index of volatility had fallen 60 per cent from the highs of Monday.

Quick Return to Stability

Global equity, currency and bond markets experience some gyrations over the past week. Headline movements in Japanese equities, large moves in currencies and sharp falls in equities markets in Australia and the US hinted at significant changes in either positioning or fundamentals. 

A weak US employment report on Friday 2nd August added to the level of uncertainty. 

For market participants the principal task was determining whether the level of dislocation was indicative of sharp changes in a relatively narrow set of conditions, or whether concerns were much broader and more permanent. 

By the end of the week the outlook was much clearer and markets across the globe recovered much of their losses. This was especially the case in Australia where the markets are now only slightly down a year-to-date basis. More importantly measures of uncertainty such as the US VIX index of volatility had fallen 60 per cent from the highs of Monday.

Finding the crunch point – RBA raising rates? What? 

In our recent communications, we have suggested that the RBA, while it can reduce interest rates and mortgage costs through 2024, could benefit significantly by following the rest of the world’s lead in reducing rates. This approach would result in a longer pause at current rate levels, particularly in the face of higher or persistent domestic inflation. 

Read as our CIO explains how interest rate increases can disproportionately affect different segments of the economy.

Company Profit ‘Reporting Season’ preview

It’s an intense time of year for equity market professionals. But one that is welcomed because of the opportunity to review financial data, hear about company strategy, assess management and operational performance, and to review one’s own stock selection and analytical prowess.

Lull before company profit reporting season

Late July is when there is a lull in company news, as industrial companies are in communication lockdown before company profit reporting in August. Mining companies are busy releasing production reports and not much else, also ahead of profit reporting.

Out with the old, in with the new

There has been a significant period of de-equitisation in the Australian equity markets in the past couple of years. Our portfolios, and performance, have been the beneficiaries of this phenomenon.  Several stocks we own are subject to takeover bids:

Selectivity and Productivity

This week we discuss two major topics. Japan and why we are more heavily invested than global benchmarks and Productivity: why is this a problem for Australia and how does it impact returns?

Going, Going, Gone – the de-equitization of the Australian Equities Market

Two of our investments, Costa Group and United Malt, received confirmation relating to takeover bids this week.

Both takeovers provided support for our investment strategy. This strategy concentrates on finding opportunities where the market fails to price either the long-run asset or the franchise-based value of a company, and instead focuses on short-term earnings fluctuations. In such cases it is often an external party, via a takeover, that unlocks the value.

Did Aussies just stop spending?

In addition to the usual market updates, this week’s Investment Matters provides updates on two companies in client portfolios: Costa Group and Aristocrat.

Some interesting introductions

We’re always looking for new ideas to introduce into the investment portfolios. A spate of recent takeovers within the portfolio (think Newcrest, Origin, United Malt, Pushpay, Eildon Capital) has accelerated the need for fresh ideas to replenish building cash positions.

“Gilty” as charged

The Australian market fell by a whopping 8% over the past two weeks. However, it’s set to end the week higher than it began.

We try to draw some lessons from a wild, but ultimately uneventful few weeks in markets.

Insurance via Superannuation – at what cost?

Firstly, insurance policies offered via superannuation may not always be suitable for every person, particularly those who have specific insurance needs. Examples include those requiring the added protection of an ‘own-occupation’ policy definition – such as surgeons. Such policy definitions were rendered incompatible with superannuation.

Understanding the rise in mergers and acquisitions

Two people shaking hands with a light blue background

When the share-market does not see value or investment merit in a particular stock the stock’s share price will recede. This could be because the company’s earnings (i.e. profit) outlook is poor (e.g. Bega Cheese Ltd) or perhaps the industry in the which the company operates is struggling (e.g. ARN Media Limited).
But often someone or a company will see value where the share-market does not. The logical outcome of this is one of the more interesting aspects of investment: the merger or the acquisition. Or, in jargon: M&A.