Tag: stocks

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.”

Unemployment rate & Emeco deep dive

This week, a new set of ABS Labour Force data was added to the plethora of economic data released in recent weeks. Once again, the impact on RBA interest rate decisions was to the fore. 

This month, the unemployment rate held steady at 4.3%, but the number of people working fell by 21,000.  

So what happened?  

Recovering markets and updates on Aquirian Limited, Emeco, Matrix Composites & Engineering and Dirty Clean Food

First Samuel portfolios have outperformed through deliberate sector positioning—more exposure to small and mid-caps, less weight in the major banks—and strong contributions from technology and gold holdings. To further test portfolio assumptions, we completed an extensive visit to Perth and regional WA, meeting with management teams across key investments.

Our discussions highlighted the strategic progress underway at Aquirian, operational and technological improvements at Emeco, growing diversification and optionality at Matrix Composites & Engineering, and the profitability and distribution expansion of Dirty Clean Food. These company-level insights continue to reinforce our long-term investment positioning.

Rates, Inflation and Retail: Reading the Signals Behind the RBA’s Cup Day Hold

At Investment Matters, we try to avoid focusing on the minutiae of economic and interest-rate policy. Consuming seemingly endless writing on perceptions of the Reserve Bank (RBA) and changes in the underlying data may be a staple for the investment team, but not necessarily critical to Readers.  

But there are exceptions, and the changes over the last week, including the RBA’s decision to hold the cash rate at 3.6% on Melbourne Cup Day, as widely expected, deserve attention due to their impact on markets and the Australian economy.

AI Capital Allocation and Market Implications

This week’s Investment Matters examines the topic of AI investment within a historical framework of overinvestment and the misallocation of resources. 

A rash of new investment in artificial intelligence in the US, especially by Nvidia, the chipmaker, and OpenAI, the owner of ChatGPT, has been announced in recent months. Investment in data centres and IT helps explain a significant portion of overall US growth in recent years. But markets have begun to concentrate on the financial engineering and cross-company relationships that funded this investment.

September CPI: Implications for Markets and Housing

The September CPI print has shifted the narrative surrounding monetary policy in Australia. While global inflation has shown tentative signs of moderation, the Australian experience highlights the structural persistence of price pressures in non-tradable goods and services.

First ten weeks of FY25, interest rates, Gold miners, Emeco and Santos

The first ten weeks of the 2025 financial year have been characterised by robust equity markets, heightened corporate activity, and renewed confidence that the monetary policy cycle has turned. The ASX has gained 4.5%, including dividends, reflecting resilient earnings and easing macro headwinds.  

Reporting season concludes: Bapcor, Nib Insurance, Lynas Corporation and IGO Limited

The profit reporting season concluded last week, and we were pleased with the overall market growth and the relative performance of our client portfolios. See this month’s CIO video for more details.  

This week’s Investment Matters covers some interesting economic data and results from three portfolio companies, Bapcor, Nib Insurance, Lynas Corporation and IGO Group.

Reporting season concludes – EarlyPay, Inghams, Healius and economic data from the Commonwealth Bank 

During reporting season, Investment Matters will update clients on all the results for portfolio companies in a simple table that outlines the share price impact of the results, along with short notes on our views of the results.

Readers should expect to see instances where we believe the result was positive, yet the stock market reaction was the opposite, and vice versa. Such mismatches are often due to the difference in investment timeframes. We are assessing company results with a medium-term valuation perspective.

Profit Reporting Season Continues: Emeco Holdings, Cleanaway, Reliance Worldwide, Challenger

During reporting season, Investment Matters will update clients on all the results for portfolio companies in a simple table that outlines the share price impact of the results, along with short notes on our views of the results.

Readers should expect to see instances where we believe the result was positive, yet the stock market reaction was the opposite, and vice versa. Such mismatches are often due to the difference in investment timeframes. We are assessing company results with a medium-term valuation perspective.

Reporting Season: Life360, Seven Group Holdings, QBE Insurance Group

Deeper into Profit Reporting Season this week, with several portfolio companies reporting results. We flagged in recent weeks that we expect significant volatility in share prices associated with this year’s results. Twenty years ago, share price changes were more muted, but several issues have arisen that increase the volatility of results in ASX’s two reporting seasons in February and August. 

Steady start to reporting season: Beach Energy and Garda Property Group

An uneventful first week of Profit Reporting Season with only Beach Energy bringing forward its results to Monday. We also caught up with the management team of our strong-performing Garda Property Group this week. 

In this edition of Investment Matters, we update clients on the Beach Energy and Garda results. 

We are challenging the markets’ view

© 2025 First Samuel Limited Read the previous week’s Investment matters. Photo © NuTz from Via Canva.com The Market Challenger Group (CGF) This week, we return to discussing our core Australian Shares sub-portfolio and a recent new addition: Challenger Group Limited (CGF).   In part, this is a reacquaintance of sorts with a previously well-held position […]

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.

Profit Reporting Season – Stockland, Mirvac, Garda and Lendlease

laptop with the words property on it with small colourful illustrated houses

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.

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.

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

Premier Investments brand portfolio diagram showing key brands including Smiggle and Peter Alexander

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).

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.

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.

The end of globalisation? How your investments will be managed.

The global supply chain landscape has shifted significantly since the COVID-19 pandemic. As trade stagnates, countries are implementing protectionist policies and focusing on local production. Australia, once a beneficiary of global trade, needs to adapt by developing domestic industries, strengthening ties with allies, and investing in local supply chains. 

This month, Craig Shepherd explains how trends, such as “friend-shoring,” are driven by technological advancements and a desire for greater control over supply chains. 

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.