Wry & Dry #21 FY-24. Heaven: a busy week. Dubai: COP that. US: Haley’s comet.
It’s been a busy week at the Members’ Entrance to the pearly gates to heaven.
On Tuesday Charlie Munger arrived in a limmo longer than a bus. Charlie was Warren Buffett’s conservative investment alter ego. He arrived and immediately began arguing with St Peter about heaven’s recent investments (remembering that time doesn’t matter in heaven): “That St Peter’s Basilica property development in Rome was a waste of money.”
Wry & Dry #3, FY-24: Through Dan’s eyes. Ski lodges. Superannuation funds fail.
Anthropologists believe there may be tribes living in the farthest reaches of New Guinea who have yet to hear that Chairman Dan has cancelled the state of Victoria holding the upcoming Commonwealth Games.
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
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.
Profit Reporting Season – Stockland, Mirvac, Garda and Lendlease
we’ve maintained higher weights in cash holdings within property sub-portfolios with an expectation that a significant rises in interest rates would necessitate an increase in cap rates (implied returns on property values), a resultant reduction in property book valuations and trigger a resultant slew of equity capital raises at discounted share prices in order to restore balance sheets to within bank funding covenants.
While the dull shine of copper comes in focus, we shed little light on BHP. Similarly, our focus this week on financial services dives deeper than the four major banks.
Profit Reporting Season – Sandfire, Perpetual and Judo Bank
This week’s Investment Matters will continue to focus on the recent reporting season.
While the dull shine of copper comes in focus, we shed little light on BHP. Similarly, our focus this week on financial services dives deeper than the four major banks.
Profit Reporting Season – Cleanaway, Emeco, ParagonCare and Worley
This week’s Investment Matters will concentrate on key company results as the reporting season winds down. On balance, market strategists have noted that earnings revisions have been neutral across the board, which is better than historical outcomes of net negative earnings revisions by optimistic investment banking equity analysts.
Profit Reporting Season – Ventia, Johns Lyng, Earlypay and Nanosonics
Read key company results as the reporting season winds down. On balance, market strategists have noted that earnings revisions have been neutral across the board, which is a better than historic outcomes of net negative earnings revisions by optimistic investment banking equity analysts.
Profit Reporting Season – Week 2
This week’s Investment Matters will concentrate key company results as the reporting season ramps up.
Profit Reporting Season Update
This week’s Investment Matters will concentrate key company results as the reporting season ramps up.
Early profit reporting season and news update
In last week’s Investment Matters we concentrated on the confession season, the period in which companies make early announcements to the market surrounding material changes to upcoming earnings.
This week’s Investment Matters will also concentrate on news flow and early reporting season results.
Confessions of a corporate earnings season
Most ASX-listed companies in Australia have a June fiscal/financial year-end. Accordingly, those with June and December balance days will tend to present their (half-year/annual) financial results to the market in each of the months of February and August.
Judo Capital – back to the future of banking
As a raft of stocks in the portfolio have been taken over or have successfully met our internal price targets, we’ve been on the hunt for new names to replace.
Perpetual – finding a way to unlock value
In the past year, we have often commented that we’ll exhibit due patience as part of our investment approach. This is required as we often seek to invest in businesses that are significantly unloved and misunderstood and where assets may, therefore be mispriced.
Premier Investments – A deep dive into a new opportunity
In recent weeks, clients will have seen the addition of Premier Investments to their Australian equity sub-portfolios. Famously partly owned and operated (whether formally or informally) by Solomon Lew, Premier Investments is amongst the most successful discretionary retailers in Australian history.
Steadfast in its approach
© 2024 First Samuel Limited The Markets This week: ASX v Wall Street FYTD: ASX v Wall Street Steadfast Group Limited is an Australian insurance broking network that provides insurance broking services to businesses and individuals across Australia and New Zealand. The company was founded in 1991 and has become one of Australia’s largest insurance […]
Growing – in two very different ways
In recent weeks, we heard the mildly alarming statistics that the ASX had fallen to a low in October 2023 of 6703.2, lower than the levels seen in the broad market index at the close of October in 2007 (6770).
Falling share prices – An opportunity (not) to be wasted
This week we highlight a new addition to the portfolio.
Inghams: laying golden eggs
Inghams is the dominant supplier of chicken products in Australia. It is also amongst the largest positions in client portfolios. In the past week, it delivered an update on progress within the business across the first half of the fiscal year.
Lynas gets a rare (earth) licence reprieve in Malaysia
This week, we discuss developments in the critical minerals sector and take a look at Woolworths Q1 trading update and what it may reflect with respect to the Australian consumer.
When should we be worried about worrying? Consumer confidence.
This week we look at Consumer Confidence and Consumer Sentiment and hope to relate it to longer-term historical trends and current portfolio construction.
RBA Speaks – more nuance, slightly less ideology?
On Wednesday, RBA Assistant Governor Christopher Kent gave a speech to a Bloomberg gathering with a title that would surely only excite economists: “Channels of Transmission.”
Consolidation of Newcrest/Newmont – Do we continue to hold?
To provide a more complete investment picture, we will continue to provide some updates on the prospects of our sub-portfolios’ companies as gleaned from our coverage of the ASX Company Profit Reporting Season.
Company Profit Reporting Season – the final instalment
To provide a more complete investment picture, we will continue to provide some updates on the prospects of our sub-portfolios’ companies as gleaned from our coverage of the ASX Company Profit Reporting Season.
Company Profit Reporting Season: Peak Week
The ‘peak’ week of company reporting season has just gone by. We provide some of the more relevant company-result takeaways.
Company Profit ‘Reporting Season’
The second substantive week of company reporting season kicked off last week. We provide some of the more relevant company result takeaways.
Company Profit ‘Reporting Season’
The first substantive week of company reporting season kicked off last week. We provide some of the more relevant company result takeaways.
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.
A deep dive and a frustrating ACCC rejection
This week, we have decided to present a (a) deep-dive on a company we have held for several years and (b) a comment on failed takeover.
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.
Understanding the rise in mergers and acquisitions
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.