Off the Press

Published 30 April 2013 in FINSIA website

Roger shares his views on investing with FINSIA on their website. Read the full interview here.

Published 1 March 2013 in Money Magazine

In his March 2013 Money Magazine column, Roger provides his insights into how to determine the true value of a business. Read here.

Published 27 February 2013 in Herald Sun

In his Short Cut column for the Herald Sun published 27 February, Roger highlights how the buoyant share price of GWA Group is not supported by the companies recent performance.  Read here.

Published 1 February 2013 in Money Magazine

In his February 2013 Money Magazine column, Roger outlines why it serves rational value investors to ignore the predictors of market fluctuations. Read here.

Published 16 January 2013 in The Australian

In His 8 December 2012 Australian column, Roger explains why quality and value are an essential combination for value investors. Read here.

Published 1 December 2012 in Money Magazine

In his December 2012 Money Magazine column, Roger explains why falling in love with even a historically high performing stock is a risky affair. Read here.

Published 24 November 2012 in The Australian

Roger highlights the risks to Resource Service firms revenue streams due to their status as contractors in this Australian article published November 24th 2012.  Read here.

Published 10 November 2012 in The Australian

In this Australian article published 10 November 2012 Roger discusses why listening to share market cliches is likely to result in poor portfolio returns.  Read here.

Published 1 November 2012 in Money Magazine

In his Money Magazine November 2012 article, Roger highlights the ongoing competitive advantage of Breville Group (BRG).  Read here.

Published 27 October 2012 in The Australian

In this Australian article published 27 October 2012 Roger discusses how behaving counterintuitively may result in better performance for your portfolio. Read here.

Published 13 October 2012 in The Australian

Roger discusses his best picks in the healthcare sector in his Australian article published on 13 October 2012.  Read here.

Published 1 October 2012 in Money Magazine

Roger provides his insights on gold miner Codan’s shiny prospects in his October 2012 Money Magazine article.  Read here.

Published 29 September 2012 in The Australian

Roger Montgomery discusses why using themes as an investment strategy is fraught with danger in this Australian article published on 29 September 2012. Read here.

Published 15 September 2012 in The Australian

Roger Montgomery discusses why investing in heavily leveraged companies is a risky pursuit in this Australian article published 15 September 2012. Read here.

Published 1 September 2012 in The Australian

Roger Montgomery discusses why earnings are not all equal in this Australian article published on 1 September 2012. Read here.

Published 1 September 2012 in Money Magazine

In his September 2012 Money Magazine article Roger outlines ongoing declining prospects for JB Hi-Fi (JBH).  Read here.

Published 15 August 2012 in The Australian

Roger discusses how the JB Hi-Fi positive 2012 result conceals future structural difficulties in this Australian article published 18 August 2012. Read here.

Published 1 August 2012 in The Australian

In his August 2012 Money Magazine article Roger discusses how company weighting in Australian market indices distort the overall performance.  Read here.

Published 21 July 2012 in Weekend Australian

Roger Montgomery certainly thinks so, and he explains why in this Weekend Australian article published 21 July 2012.  Read here.

Published 1 July 2012 in The Australian

Roger provides details of the sad decline of Hastie Group (HST) in this Money Magazine article for July 2012.  Read here.

Published 23 June 2012 in The Australian

Roger Montgomery discusses why excessive focus on High Yield stocks is likely to yield disappointing returns in this Australian article published on 23 June 2012. Read here.

Published 9 June 2012 in The Australian

Roger Montgomery certainly thinks so – and he explains why Value Investors need to do their homework to experience exceptional returns in this Australian article published on 9 June 2012. Read here.

Published 1 June 2012 in Money Magazine

Roger Montgomery discusses the expansion of Jumbo Interactive (JIN) and the implications of further developments in the online lottery ticket industry in this Money Magazine article published in June 2012. Read here.

Published 26 May 2012 in The Australian

In The Australian Roger Montgomery discusses why the laws of supply and demand suggest demanding times ahead for mining companies. Read here.

This article was published on 26 May 2012.

Published 12 May 2012 in The Australian

Roger Montgomery discusses in The Australian why his Value.able approach to investing requires investors to look past accounting depreciation to understand the true cash profitability of companies. Read here.

This article was published on 12 May 2012.

Published 1 May 2012 in Money Magazine

Roger Montgomery discuss how Sustainable Competitive Advantage is the platform for exceptional company performance in this Money Magazine article published in May 2012.  Read here.

Published 1 May 2012 in ASX Investor Update Email Newsletter

In the May 2012 edition of the ASX Investor Update Email Newsletter, Roger Montgomery outlines his Value.able framework for successfully investing in the share market. Read here.

Published 1 May 2012 in Money Magazine

In the May 2012 issue of Money Magazine, Roger Montgomery discusses why companies with a high Return on Equity maintain long-term Competitive Advantages in the industries in which they operate. Read here.

Published 28 April 2012 in The Weekend Australian

In the Weekend Australian, Roger Montgomery discusses how a value investor uses the concept of intrinsic value to determine the attractiveness of investments. Read here.

Published 20 April 2012 in Share Cafe

Roger Montgomery discusses how and if you should respond to the impact of changing global conditions on your BHP [BHP] stock holding. Read here.

Published 14 April 2012 in The Australian

For many, beating the market indices is the hold grail of share market investing.  In this Australian article published 14 April 2012 Roger Montgomery discusses how you too can beat the market using his Value.able investing strategy.  Read here.

Published 1 April 2012 in Money Magazine

Roger Montgomery discusses the prospects for Gold-Miner Red5 (RED) in this Money Magazine article published in April 2012.  Read here.

Published 31 March 2012 in The Australian

Roger Montgomery expounds upon his Value.able investing approach to illustrate how Big does not mean Best when choosing companies in this Australian article published on 31 March 2012. Read here.

Published 31 March 2012 in The Investors Voice

Roger Montgomery discusses how using Skaffold will allow you to learn the intrinsic value of stocks even during periods of high market volatility. Read here.

Published 17 March 2012 in The Australian

Participation in the stock market is at a low ebb – in this Australian article published 17 March 2012 Roger Montgomery explains how when you decide to re-enter the stock market his Value.able strategy will allow you to invest for value, and entirely avoid speculation.  Read here.

Published 1 March 2012 in Money Magazine

Roger Montgomery discusses why ‘watching the Directors’ is a “Value.able” strategy when assessing future business performance in his March 2012 Money Magazine article.  Read here.

Published 1 February 2012 in Money Magazine

Roger Montgomery discusses why the global investing outlook for 2012 will be impacted by a variety of negative influences in this Money Magazine article published February 2012.  Read here.

Published 21 December 2011 in

Roger Montgomery runs through the numbers behind Billabong’s spectacular 40% sell-off this week. Read Roger’s article at www.eurekareport.com.au.

Published 14 December 2011 in Alan Kohler's Eureka Report

Investors should keep a close watch on Monadelphous and Fleetwood. If their premiums to intrinsic value decline, they may present attractive opportunities. Read Roger’s article at www.eurekareport.com.au.

Published 7 December 2011 in Alan Kohler's Eureka Report

Buying shares in the right businesses will help investors avoid being caught in an index that is going nowhere. Read Roger’s article at www.eurekareport.com.au.

Published 1 December 2011 in Money Magazine

Roger Montgomery discusses why Embelton (EMB) is one of his stocks to watch in 2012 in this article published in the December 2011 issue of Money Magazine.  Read here.

Published 30 November 2011 in www.eurekareport.com.au

In 1979, just like today, many thought equities were finished. Investors in Credit Corp, Flight Centre, Northern Star and many more top stocks would disagree. Read Roger’s article at www.eurekareport.com.au.

Published 24 November 2011 in Alan Kohler's Eurkea Report

The Reject Shop is cheap but not good value. Read Roger’s article at www.eurekareport.com.au.

Published 16 November 2011 in Alan Kohler's Eureka Report

Among nano caps. Embelton Limited stands out even though its too small to attract broker research. Read Roger’s article at www.eurekareport.com.au.

Published 9 November 2011 in Alan Kohler's Eureka Report

Good luck trying to buy shares in this boring but reliable business. It is rarely traded and the family owns two-thirds of the shares. Read Roger’s article at www.eurekareport.com.au.

Published 4 November 2011 in Alan Kohler's Eureka Report

Gerry’s share price and intrinsic value are about what they were in 2003 and the outlook is not encouraging. Read Roger’s article at www.eurekreport.com.au.

Published 26 October 2011 in Alan Kohler's Eureka Report

According to Value.able investor Roger Montgomery, Woolworths is approaching its intrinsic value. However, as he explains, the company faces so many challenges that new CEO Grant O’Brien is going to have offer a compelling new growth strategy very soon. Read Roger’s article at www.eureakreport.com.au.

Published 19 October 2011 in Alan Kohler's Eureka Report

Telstra’s deal with NBN Co could give the company a lift, however as Roger Montgomery writes, “the longer-term outlook is less certain”. Read Roger’s article at www.eurkeareport.com.au.

Published 12 October 2011 in Alan Kohler's Eureka Report

Whilst the latest iPhone won’t ignite JB HI-Fi’s share price, the stock is back in Roger Montgomery’s buy zone. Read Roger’s article at www.eurekareport.com.au.

Published 5 October 2011 in Money magazine

Roger Montgomery reveals nine companies trading below his estimate of their Value.able intrinsic value. Read Roger’s article.

Published 5 October 2011 in Alan Kohler's Eureka Report

Roger Montgomery shares his Value.able insights on six new companies that meet one of his strict criteria criteria of extraordinary businesses – recurring revenue. Read Roger’s article at www.eurekareport.com.au.

Published 28 September 2011 in Alan Kohler's Eureka Report

Without cash, businesses can die. Understanding cash flow is a simple way to understand the quality of a business, and avoid investing in the next Centro. Read Roger’s article at www.eurekareport.com.au.

Published 21 September 2011 in Alan Kohler's Eureka Report

The track record of acquisitions in Australia is nothing short of appalling. To the detriment of employees and shareholders, hundreds of billions of dollars have been lost. Yet managers continue to be remunerated for sub-standard returns. Read Roger’s article at www.eurekareport.com.au.

Published 14 September 2011 in Alan Kohler's Eureka Report

Cochlear is one of the highest-quality companies listed on the ASX today. This week the recall of its flagship hearing device resulted in the subsequent slashing of the company’s share price, by almost 30 per cent in three days. Remember, during the GFC Cochlear shares fell from $78 to $44. In 2021 we won’t be thinking about this recent recall, just as nobody now talks about the Wembley Stadium delays that dogged Multiplex back in 2006. So are Cochlear’s glory days over, or is it oversold? Will the recall inflict permanent scars? Roger Montgomery’s guess is that it will not. Indeed, the sell-down could be a dream come true for value investors. Read Roger’s article at www.eurekareport.com.au.

Published 7 September 2011 in Money magazine

If your strategy is to buy extraordinary businesses trading at discounts to intrinsic value, Woolworths offers the required combination. Roger Montgomery explains why Woolworths is a good buy. Read Roger’s article.

Published 7 September 2011 in Alan Kohler's Eureka Report

What is the definition of a defensive investment? Despite the tired and predictable answers you are likely to get from the advice industry, it’s a fascinating question to ponder at a time when many traditionally ‘safe’ investment choices are exceedingly unattractive. Roger Montgomery has spent some time thinking about this conundrum and has arrived at an unorthodox conclusion. Read Roger’s article at www.eurekareport.com.au.

Published 31 August 2011 in Alan Kohler's Eureka Report

Reports of the death of Australian manufacturing are greatly overstated. Roger Montgomery visits Australia’s unloved manufacturing sector and finds a group of thriving companies worth adding to your watchlist. Read Roger’s article at www.eurekareport.com.au.

Published 24 August 2011 in Alan Kohler's Eureka Report

Roger Montgomery heads back to Matrix to find out what happened to the share price and, more importantly, where it’s going. Read Roger’s article at www.eurekareport.com.au.

Published 17 August 2011 in Alan Kohler's Eureka Report

If anyone were to make a second run at Qantas, now would be the time to do it. Read Roger’s article at www.eurekareport.com.au.

Published 10 August 2011 in Alan Kohler's Eureka Report

There’s an odd whiff about the upcoming float of Australia’s top-selling cheese brand. No matter what the company says, investors will have their shares diluted by Bega’s acquisition of Tatura Milk Industries. Read Roger’s article at www.eurekareport.com.au.

Published 3 August 2011 in Money magazine

If you had $100,000 to invest in the stock market, betting the farm on one hot tip could turn your $100,000 to $5 million, but its more likely to wipe you out. An option is to slowly, carefully build a portfolio that, over time is almost certain to beat the market. First recognise the best companies. We call these A1 businesses. If you invest in extraordinary businesses at prices less than they’re worth, you are on your way. Roger Montgomery shares his investing philosophy. Read Roger’s article.

Published 3 August 2011 in Alan Kohler's Eureka Report

In case you’ve missed it, Australia’s leading retailers have been putting up a brave fight against the evil spectres of online shopping and a record high savings rate. Forecasts have been slashed and investors have deserted the sector in droves. But weak retail conditions won’t last forever, making some stocks look like big buys. Read Roger’s article at www.eurkeareport.com.au.

Published 27 July 2011 in www.eurkeareport.com.au

It’s never a dull moment for shareholders in Leighton, but what’s it really worth? Roger Montgomery runs his famous Value.able ruler LEI to measure the true value of this fading star. Read Roger’s article at www.eurekareport.com.au.

Published 20 July 2011 in Alan Kohler's Eureka Report

Roger Montgomery identifies one businesses that stands head and shoulders above the rest of Australia’s fledgling pharmaceutical industry. And it hasn’t been taken over yet! Read Roger’s article at www.eurekareport.com.au.

Published 13 July 2011 in Alan Kohler's Eureka Report

Roger Montgomery breaks out the calculator and assesses the merits of the $280 million IPO of Collins Food Group, owner of more than 200 fast food franchises, including KFC. Read Roger’s article at www.eurekareport.com.au.

Published 12 July 2011 in ASX Investor update July 2011

It is almost reporting season, the time of year companies report their annual and, for some half yearly results. To make it a little easier, here is a Value.able tool to help you discern the very best companies during this years reporting avalanche – and later, a list of seven companies worth watching. Read Roger’s article.

Published 6 July 2011 in Money magazine

Are you looking to build a second income stream from your share portfolio? Roger Montgomery shares his Value.able strategy that you can follow to pick up extra income without permanently risking your capital. Read Roger’s article.

Published 6 July 2011 in Money Magazine

It’s hard to get excited about Telstra: three sell-downs of shares by the federal government at $3.30 (T1), $7.40 (T2) and $3.60 (T3) has meant no float participant still holding the shares has made a capital gain yet. If you are after a company whose intrinsic value is rising significantly over the years, neither Telstra’s past nor its future offers much to get excited about, says Roger Montgomery. Read Roger’s article.

Published 6 July 2011 in Alan Kohler's Eureka Report

Cost cuts at Ten have given the share price a kick but the impact is likely to be fleeting. Roger Montgomery asks what is a fair price to pay?

PORTFOLIO POINT: It remains to be seen how Ten will perform after its restructure. Well run businesses don’t need restructures.

Warren Buffett observed that we are all “accidents of the womb”. If you will allow me to extend this train of thought to “accidents of business” there must be many successful entrepreneurs in Australia who might wonder how much bigger their empires could have been if they had perhaps been born or established their business in LA, New York or London.

And I suspect this is a question – give or take a few expletives – that must surely vex Lachlan Murdoch in the context of his latest management decisions at Ten Network where he has a maximum audience of just 22,638,747.

The way to think about the market economics of TV is like a giant card game. There are three high roller teams at the table: Lachlan, Gina Rinehart and James Packer at Ten; the private equity outfit CVC at Nine; and Kerry Stokes at Seven.

Each ratings season represents a hand that is dealt and must be played. Sometimes Seven gets a good hand, but next time it will be Ten and then after that it will be Nine. The order doesn’t matter much and the stakes don’t get any bigger (literally!).

The point is that the three teams are sitting in a room with the doors and windows closed, there’s a fixed amount of money in the pot and who wins will simply depend on the strength of their current hand.

It’s a card game without an end. New hands are being dealt constantly. Occasionally one of the players will have a good run, get cocky and overplay his hand by spending too much on programs that flop. Someone else takes up the mantle and round and round we go.

That anyone thinks this is going to dramatically and permanently improve is perhaps the only surprising thing about the television game.

Actually, on second thoughts, I may have been a little optimistic. I did say the amount of money in the pot stays the same. After we take inflation into consideration it definitely is smaller! Then there are the forces of fragmentation at work.

The upshot of all of this is that the share prices of these companies go through periods of favour – almost always at the expense of another – and then periods of rejection. In the long run, the aggregate performance is unlikely to be impressive, nor any improvement be permanent.

But as we all know the stockmarket is a popularity contest in the short term and there aren’t enough companies for fund managers to chase, so a turnaround story could translate to an improving share price.

Ten has just announced the run of bad hands is over and has changed its lucky cufflinks. Lachlan Murdoch at the weekend announced a restructure following a review of costs that commenced in February. With that in mind, what is Ten Network worth?

I thought it might be useful to run a couple of scenarios and, using the Value.able formula for estimating intrinsic value, produce a range of valuations below which the price of Ten Network could be deemed attractive.

As an aside, well-run businesses don’t need restructures or cost cutting drives to keep the business on track. A well-run business never gets “fat” in the cost department, just as a well-kept house never needs a wholesale cleanout. Keeping costs down at Ten Network should be automatic, a part of the culture and daily business life of the television station.

More worryingly, all the free-to-air stations are merely reacting to the structural challenges presented by the internet. There is arguably no clearly defined strategy among the networks that proactively embraces any online opportunity. Indeed one wonders whether there is any strategy at all.

But back to what it could be worth. From what I can gather, operating costs are running at just over $600 million, representing a rise of $200 million over the past five years. Costs are expected to rise further next year around news, the digital station Eleven and MasterChef - the popularity of which may begin wane this year or next.

It has been reported that headcount will be reduced by more than 100, possibly 200, and that the network will save about $45 million by walking away from AFL coverage. Attrition is already reducing headcount.

The digital station One, which has been losing about $20 million, is being relaunched but one expects that $20 million loss to be reduced rather than eliminated. Also rumoured to be eliminated is $20 million of additional costs associated with 100 staff hired for regional news bulletins and the 6.30 with George Negus program.

Assuming no new ratings sensations next year, the revenue may remain flat. The network employs more than 1300 people and last year salaries were $145.2 million, an average of $111,692.

Cutting, say, 150 people produces savings of $16.8 million. Add the $45 million saved from the AFL, the $20 million from cutting news and cuts to Sports Tonight, Video Hits and publicity and marketing departments in Perth, Adelaide and Brisbane, and you have savings of maybe $100 million.

Starting with $120 million in savings, some of which will be reversed because of the aforementioned cost increases, Ten may end up with net savings of $90 million pre tax.

The market might think like this: If market capitalisation is $1.2 billion and stays at 8.5 times earnings, and 70% of those savings drop to the bottom line, the measures could add almost $535 million to the market’s valuation of Ten. That is a big increase.

Predicting changes in price, however, is not the job of the value investor. Intrinsic value is what I am interested in and the intrinsic valuation changes from the cost cutting are significant but less so. The changes being proposed may add $63 million in 2012 to the profit expected this year of $86 million. The impact would be an increase in intrinsic value from the current 85¢ to 99¢. The shares recently traded at $1.05 and James Packer paid more than $1.60.

Because Packer & Co paid too much, they will need to extract a whole lot more to avoid an accident of the womb!

Published 29 June 2011 in Alan Kohler's Eureka Report

Many shares that appear cheap based on their fundamentals may just be harbouring dark secrets. Read Roger’s article at www.eurekareport.com.au.

Published 22 June 2011 in Alan Kohler's Eureka Report

The retail landscape is changing, and changing fast. Hyped-up tech floats will be here soon enough, but there are better ways to play this theme. Read Roger’s article at www.eurekareport.com.au.

Published 15 June 2011 in Alan Kohler's Eureka Report

Telstra’s woes are unlikely to be cured by a multi-billion dollar novelty cheque. To prosper, the company must use the cash injection to build a valuable and sustainable competitive advantage. Read Roger’s article at www.eurkeareport.com.au.

Published 8 June 2011 in Alan Kohler's Eureka Report

The broad market selloff is an opportune time to begin constructing a portfolio blueprint for 2011-12. Roger lists 10 stocks for Value.able Graduates to consider. Read Roger’s article at www.eurekareport.com.au.

Published 1 June 2011 in Money magazine

If you take your cues from price rather than values, fear may have recently set in. For Value.able investors, a market correction is a reason for celebration rather than consternation. Roger Montgomery explains why holding on may be the wiser decision. Read Roger’s article

Published 1 June 2011 in Alan Kohler's Eureka Report

The prices of rare earths have rise, but share prices of the producers have fallen. What’s the bigger picture? Read Roger’s article at www.eurekareport.com.au.

Published 25 May 2011 in Alan Kohler's Eureka Report

With June 30 fast approaching, and following a series of reports that highlight a decline in global economic growth, analysts around the globe have begun to reassess their assumptions about commodity prices, inflation, China and company earnings. But every dark cloud has a silver lining. With that in mind, Roger Montgomery suggests five businesses to put on your watchlist. Read Roger’s article at www.eurekareport.com.au.

Published 18 May 2011 in Alan Kohler's Eureka Report

The attachment of ‘value’ to physical assets is not unusual. Roger Montgomery says assets of the intangible variety – the economic goodwill (rather than the accounting variety) – are more valuable. Read Roger’s article at www.eurkeareport.com.au.

Published 11 May 2011 in Alan Kohler's Eureka Report

Owning a bank based on an island – that’s pretty attractive. Choosing one bank is no easy decision, but on balance, over the next few years, Roger Montgomery anticipates the ANZ to prove superior, provided costs can be controlled and expectations don’t put the price up beyond intrinsic value. But if you want to buy the best bank in terms of economic performance, it would be CommBank. Unfortunately, it is now expensive. Ranked by the Montgomery Quality Ratings only, the banks are all A-class companies, but which receives Roger’s coveted A1 Montgomery Quality Rating? Read Roger’s article at www.eurekareport.com.au.

Published 4 May 2011 in Money magazine

When markets rise and your Value.able portfolio rises even more, its difficult not to want to enjoy some fruits. But Roger believes value investors must keep constant vigil and if it’s high-quality smaller companies that suit, there are a few with exposure to oil and gas that your advisor should look at. Read Roger’s article.

Published 4 May 2011 in Alan Kohler's Eureka Report

Smart people are capable of not-so-smart things. Consider the marriage of Foster’s and Southcorp. On Friday 29 April 2011 Friday Foster’s shareholders voted in favour of a divorce; on 4 May 2011 the Supreme Court of Victoria granted a decree absolute. Companies considering merging should pay attention to Foster’s experience. The next time the board of a company you own makes a bid for one you don’t, do yourself a favour and send them a copy of Value.able! Read Roger’s comments at www.eurekareport.com.au.

Published 27 April 2011 in Alan Kohler's Eureka Report

When it comes to company floats, there’s one piece of information Roger Montgomery looks for above all others. Read Roger’s article at www.eurekareport.com.au.

Published 21 April 2011 in ASX Investor Update

You can’t buy shares in a business and hold them forever. Business is dynamic and unfortunately many of those listed on the sharemarket are destined to be liquidated, or go into receivership or administration. Companies disappoint operationally, their prospects become less bright, they take on too much debt, pay too much for an acquisition, or their share price simply rallies far above any reasonable estimate of value. How then can you hold these shares and expect to do well? Read Roger’s article.

Published 20 April 2011 in Alan Kohler's Eureka Report

Roger Montgomery’s ValueLine portfolio for Alan’s Eureka Report rose by 12.79% in its first year of operation (with less than half the portfolio invested), compared to the index gain of 9.69%. This financial year the portfolio has grown by 15.11% compared to the index, which has grown by 12.71%. The invested portion of the portfolio returned 27.6% in year one and 23.4% this year thus far. It goes to show that Roger’s Montgomery’s Value.able strategy of buying the best stocks – those with the higher Montgomery Quality Ratings or MQRs – for less than they’re worth leads to meaningful outperformance over time. How the ‘blue chips’ in your portfolio compare? Compare your portfolio to Roger’s list of 51 companies and their Montgomery Quality Ratings. Read Roger’s article at www.eurekareport.com.au.

Published 13 April 2011 in Alan Kohler's Eurkea Report

Investments are never certain, but avoiding particular sectors and companies can improve your prospects. Extraordinary A1 businesses businesses are not blue-chip. Find a business whose shares are available at prices below intrinsic value and one whose value is expected to rise materially over the next few years, then provided the other characteristics of quality are met you would be unwise to leave your funds parked anywhere else. Read Roger’s article at www.eurekareport.com.au.

Published 6 April 2011 in Alan Kohler's Eurkea Report

Whilst Roger Montgomery can’t predict how high the oil price will go nor tell you what kind of trajectory it will take, he does believe, with a considerable degree of certainty, that Australian’s will be paying higher prices for fuel over the next decade. Zicom, a supplier of equipment to service vessels, is just one company set to benefit from our growing need for oil. Read Roger’s article at www.eurekareport.com.au. WARNING: Zicom is a thinly traded microcap in which Roger Montgomery has purchased shares because it meets his investment criteria. It may not meet yours. It is therefore information that is general in nature and NOT a recommendation or a solicitation to deal in any security.

Published 6 April 2011 in Money magazine

Unlike a conventional “Blue Chip” portfolio founded on the principles of diversification in large well-known companies, Roger Montgomery’s Money Value.able portfolio is driven by the pursuit of extraordinary businesses at prices less than they’re worth. In the April 2011 column, Roger diverges slightly from his ‘picks and shovels’ theme to focus on a company that is reaping the benefits of Australia’s exploding internet usage. Read Roger’s article.

Published 30 March 2011 in Alan Kohler's Eurkea Report

I have prepared a list of companies that achieve extremely high Montgomery Quality Ratings of A1, A2 or B1, with a market capitalisation of greater than $1 billion, returns on equity of more than 10% and historical and forecast intrinsic value increases of more than 10% per annum. I hope you find the list educational and are able to put it to good use. Read Roger’s article at www.eurekareport.com.au.

Published 23 March 2011 in Alan Kohler's Eureka Report

Entrants in Australia’s retail sector range from nippy thoroughbreds to tired donkeys… Harvey Norman, Oroton, Woolworths, Myer, Coles, Noni B, Kathmandu, JB Hi-Fi, Fantastic Furniture, Nick Scali, The Reject Shop and Billabong. Roger reveals his Montgomery Quality Rating (MQR), forecast change in Value.able intrinsic value over the next twelve months and the current safety margin for these well-known Australian retailers in his latest column for Alan’s Eureka Report. Read Roger’s article at www.eurekareport.com.au.

Published 16 March 2011 in Alan Kohler's Eureka Report

Last year Roger Montgomery wrote about TFS Corporation (TFC), an owner and manager of Indian sandalwood plantations in the east Kimberly region of WA. On Wednesday, the company emerged from a trading halt, announcing a $38 million capital raising. What happens to the value of the company? Well, a company that loses cash has a value that requires no calculations. It is simply zero. Read Roger’s article at www.eurekareport.com.au.

Published 10 March 2011 in Alan Kohler's Eureka Report

Audience fragmentation, declining revenues and duelling billionaires. Its enough to put any investor off the media sector for life. But as Roger Montgomery reveals, there are opportunities in this constantly evolving space that investors would be silly to ignore. Read Roger’s article at www.eurekareport.com.au.

Published 3 March 2011 in Money magazine

If you are looking for a true blue chip portfolio, you may need to rethink conventional wisdom. According to Roger Montgomery, a true blue chip portfolio has nothing to do with size or longevity and everything to do with quality. Roger’s Value.able portfolio for Money is proof of this strategy – on average, the stocks in the portfolio have risen 27 per cent in just six months. Read Roger’s article.

Published 23 February 2011 in Alan Kohler's Eureka Report

Matrix is a stock with the lot. It was added to Roger Montgomery’s Value Line portfolio in August 2010. Since that time, and with Middle East tensions fuelling the price of oil, MCE is soaring. Its competitive advantages combined with deep-sea exploration expertise put this A1 stock in a league of its own. Read Roger’s article at www.eurekareport.com.au.

Published 16 February 2011 in Alan Kohler's Eureka Report

Put simply, if you want a high return on your money, Transurban probably isn’t for you. Its success hinges on revenues going up and interest rates remaining stable or declining. Rather than paying down its existing debt, Transurban persistently refinances and the amount that still needs to be re-financed before 2020 now exceeds $3.5 billion. Like airlines, investing in Transurban is unlikely to put you on the fast lane to high returns. The stock does not look cheap and in Roger Montgomery’s opinion, there are plenty of better (A1) and less risky options out there. Read Roger’s article.

Published 9 February 2011 in Alan Kohler's Eureka Report

Last year in Eureka Report Roger Montgomery wondered out loud if JB Hi-Fi’s steep profit trajectory may be levelling out. Has the company matured and what are the consequences of management’s promise to review its capital management practices? Read Roger’s article at www.eurkeareport.com.au.

Published 1 February 2011 in Money magazine

Roger Montgomery reckons 2011 can be a real cracker, so long as investors follow just three simple steps – turn the stock market off, separate the extraordinary businesses from the ordinary and understand how to calculate intrinsic value using Roger’s Value.able method. Read Roger’s article.

Published 1 February 2011 in Equity magazine

The New Year is typically a time for resolutions and when it comes to the task of increasing one’s wealth, good intentions are often met with sore disappointment. In this feature article for the Australian Shareholder’s Association, Roger Montgomery gives investors the tools he uses to beat the stock market over the long term. Read Roger’s article.

Published 22 December 2010 in Eureka Report

The techniques of value investing prove it’s possible to beat the market as long as you remain disciplined. Read Roger’s article at www.eurekareport.com.au.

Published 15 December 2010 in Eureka Report

The sharp fall in The Reject Shop’s shares might be an opportunity in disguise. Roger Montgomery thinks it will a stock to watch in 2011. Read Roger’s article at www.eurekareport.com.au.

Published 8 December 2010 in Eureka Report

Shareholders must be certain that any business they own has strong competitive advantages. Pfizer’s decision to bypass Australian distributors bites deep into revenues to two pharmaceutical wholesalers is a lesson to investors. Read Roger’s article at www.eurekareport.com.au.

Published 1 December 2010 in Money magazine

With all the noise about the QR National float, investors may have missed MACA Limited, a relatively straight forward mining services business that meets Roger Montgomery’s value investment criteria. Read Roger’s article.

Published 1 December 2010 in Eureka Report

You would think that a country so reliant on infrastructure would offer good investment opportunities for value investors. Unfortunately there are depressingly few opportunities. Read Roger’s article at www.eurekareport.com.au.

Published 23 November 2010 in Eureka Report

A company’s profit figure can bear little resemblance to the cash profits or cash flow. Thanks to tax-driven asset purchases, disposals and attempts to “estimate” the wear and tear on equipment, among many other things, the accounting profit is often not an accurate reflection of the economic performance of a business. Perhaps the best example of this in the listed company arena is Qantas. Read Roger’s article at www.eurekareport.com.au.

Published 17 November 2010 in Eureka Report

Bad PR and reregulation at home and abroad combine to create serious headwinds for bank stocks. They really do need to fight the regulatory cloud hanging over them. And investors should only be buying at very big discounts to intrinsic value – which currently don’t exist. Read Roger’s article at www.eurekareport.com.au.

Published 10 November 2010 in Eureka Report

Westfield plans to spin off half of its Australian and New Zealand assets (about $12 billion) into a new vehicle called the Westfield Retail Trust (WRT). The company It also plans to raise $3.5 billion worth of equity to pay down debt associated with the original vehicle Westfield Group (WDC), which will own the remainder of the assets and stay listed. Roger Montgomery investigates if the de merger will restore the company to its glory days. Read Roger’s article at www.eurekareport.com.au.

Published 3 November 2010 in Eureka Report

Transpacific has a near monopoly – usually a recipe for strong profits – yet its returns are on the nose. Roger Montgomery says TPI is one monopoly business that investors would do well to steer clear of. Read Roger’s article at www.eurekareport.com.au.

Published 1 November 2010 in Money magazine

Roger Montgomery has his doubts about the upcoming QR National Float, adding that there are many devices being employed by the promoters to make sure its doesn’t slump. Read Roger’s article.

Published 27 October 2010 in Eureka Report

Retailers with competitive advantage make big profits. Here are my top picks. Read Roger’s article at www.eurekareport.com.au.

Published 20 October 2010 in Eureka Report

QR National has got everyone talking,  but Roger Montgomery uncovers a float that’s actually worth considering. Read Roger’s article at www.eurekareport.com.au.

Published 13 October 2010 in Eureka Report

Australians are expected to buy more than a million cars this year. So apart from carsales.com.au, what other businesses in the automotive sector are worth a look? Read Roger’s article at www.eurekareport.com.au. Click here to read Roger’s insights on Carsales.com.au.

Published 9 October 2010 in ASX.com.au Investor Update

Roger Montgomery teaches investors how to spot the difference between outstanding value and ‘value traps: low or negative ROE, negative cash flow, high debt and share prices far higher than a company’s intrinsic value. Read Roger’s ASX Investor Update article at asx.com.au.

Published 6 October 2010 in Eureka Report

Roger Montgomery applies his famous valuation technique to one of the most heavily oversubscribed floats of 2009 – Carsales.com – and discovers it is a business in excellent shape and delivering astounding returns. But does it meet Roger’s rigorous standards? Read Roger’s article at www.eurekareport.com.au.

Published 1 October 2010 in Money magazine

Supplying miners with the equipment they need to repair their infrastructure is now big business. In his Value.able Stocks column for Money magazine, Roger Montgomery reveals three businesses in the sector that have recently received or confirmed their A1 Montgomery Quality Rating (MQR). Read Roger’s article.

Published 30 September 2010 in Eureka Report

Will the infrastructure stocks sold off in favour of QR National present any bargains? Roger Montgomery digs deep into the transport and infrastructure sector in search of a bargain. Read Roger’s article at www.eurekareport.com.au.

Published 22 September 2010 in Eureka Report

The pending float of QR National will stir up plenty of memories. Some good, some bad. Its time to crunch some numbers. Read Roger’s article at www.eurekareport.com.au.

Published 15 September 2010 in Eureka Report

Looking for top-quality stocks? Ignore the ‘blue-chips’ and start with Roger Montgomery’s list of A1 businesses – those with enduring quality as evaluated by the Montgomery Quality Rating. Read Roger’s article at www.eurekareport.com.au.

Published 8 September 2010 in Eureka Report

Millions of tonnes of waste are created every year. Surely that’s an opportunity? Read Roger’s article at www.eurekareport.com.au.

Published 1 September 2010 in Money magazine

Roger Montgomery’s Value.able will reinvent the way you invest. He reveals his principles for long-term stock market investing in the latest issue of Money magazine. Read article.

Published 1 September 2010 in Money magazine

Roger Montgomery reveals in his monthly Money magazine column, Value.able stocks, that he now has reservations about JB Hi-Fi. Read article.

Published 1 September 2010 in Eureka Report

The retail giant is doubling the size of its share buyback, which should bolster confident in its ability to keep delivering solid returns to shareholders. Don’t believe the hype. Woolworths is well placed to continue delivering solid returns. Read Roger’s article at www.eurekareport.com.au.

Published 25 August 2010 in Eureka Report

Telstra is one of the most analysed stocks on the ASX. So what’s it really worth? Read Roger’s article at www.eurekareport.com.au.

Published 18 August 2010 in Eureka Report

Finding an undervalued stock is a wonderful thing. Finding a group of them is something else. In this edition Roger identifies a cluster of undervalued companies and adds one to his benchmark-beating portfolio. Read article.

Published 11 August 2010 in Eureka Report

Its shares are still at a discount to their intrinsic value, so they won’t be sold out of the ValueLine portfolio anytime soon. But JB’s years of fast growth have slowed. Read Roger’s article at www.eurekareport.com.au.

Published 4 August 2010 in Money magazine

Roger Montgomery explains to readers of Money magazine the difference between investing and speculating. Read article.

Published 4 August 2010 in Eureka Report

Companies with a history of carefully investing shareholder capital usually don’t give it away undeservedly. When it comes to Downer EDI, Shareholders would have been better off owning Forge, Decimal or Monadelphous. Read Roger’s article at www.eurekareport.com.au.

Published 1 August 2010 in Australian Investors Association Investors' Voice

In an urgent world that drives you to act constantly value investing seems boring or even slothful, but it os precisely this single minded focus  on the best businesses that will almost always improve your investment returns. Read article.

Published 28 July 2010 in Eureka Report

When share prices start getting ahead of even the most optimistic forecasts then it’s probably time to let them go. Read Roger’s article at www.eurekareport.com.au.

Published 21 July 2010 in Eureka Report

The real tragedy about the collapse in Nufarm’s share price is that you probably hold a lot of companies like it. You just don’t know it yet. Read Roger’s article at www.eurekareport.com.au.

Published 14 July 2010 in Eureka Report

They are favoured by financial advisers and brokers as defensives because of their reliable revenues, but their performance does not justify their prices. Read Roger’s article at www.eurekareport.com.au.

Published 12 July 2010 in Money magazine

Roger Montgomery shows readers of Money magazine how to do their homework and pick superior retail stocks. Read article. In June 2010 Peter Switzer invited Roger Montgomery to join him for an interview with Sally MacDonald, CEO of Oroton Group, on the Sky Business Channel’s Switzer TV. Watch the interview at Roger’s YouTube channel.

Published 7 July 2010 in Eureka Report

Investors who buy cyclical businesses on the basis of a forecast are destined for disappointment. Read Roger’s article at www.eurekareport.com.au.

Published 1 July 2010 in NRMA Open Road

If you find stock market tips a bit hit and miss, and you would like to do better, all you need to do is work out what a share is really worth. Read article.

Published 30 June 2010 in Eureka Report

Roger Montgomery’s Eureka Report ValueLine portfolio outperformed the market by 17.9%, demonstrating once again that all investors need to do to be successful is buy the highest quality businesses and wait. Read Roger’s article at www.eurekareport.com.au.

Published 23 June 2010 in Eureka Report

Primary Healthcare, Virgin Blue and Fairfax are just some of the many stocks trading at prices far above intrinsic value. Read Roger’s article at www.eurekareport.com.au.

Published 16 June 2010 in Eureka Report

You may not have heard of Return on Incremental Equity but it determines which bank is the best value. Read Roger’s article at www.eurekareport.com.au.

Published 14 June 2010 in Money

Roger Montgomery introduces his new column on constructing a winning share portfolio for Money magazine. Read article.

Published 9 June 2010 in Eureka Report

Sometimes selling bad businesses can be just as profitable as buying good ones. Take iSoft. Read Roger’s article at www.eurekareport.com.au.

Published 2 June 2010 in Eureka Report

Reasonable prices are emerging among quality players such as Fleetwood and WorleyParsons. Read Roger’s article at www.eurekareport.com.au.

Published 26 May 2010 in Eureka Report

There are only four good quality companies on the ASX that are trading at levels worth acquiring right now. Read Roger’s article at www.eurekareport.com.au.

Published 19 May 2010 in Eureka Report

There is little evidence that Healthscope is worth anything near the private equity bid of $5.50 a share. Read Roger’s article at www.eurekareport.com.au.

Published 12 May 2010 in Eureka Report

Asiano’s $1.1 billion writedown should have investors looking hard at other stocks, particularly where goodwill dominates balance sheets. Read Roger’s article at www.eurekareport.com.au.

Published 5 May 2010 in Eureka Report

The sharp fall in CSL’s share price represents a good opportunity for investors with the courage to swim against the tide. Read Roger’s article at www.eurekareport.com.au.

Published 1 May 2010 in NRMA Open Road

Roger Montgomery reveals the formula to value businesses. Read article.

Published 28 April 2010 in Eureka Report

Index funds have to buy Telstra, but there’s little to recommend it to investors. Read Roger’s article at www.eurekareport.com.au.

Published 21 April 2010 in Eureka Report

There are no shortcuts in the world of investment. A single metric can only tell you so much. Read Roger’s article at www.eurekareport.com.au.

Published 14 April 2010 in Eureka Report

Forecasts of new highs for gold and a takeover bid have returned Lihir to two year highs. But what is it really worth? Read Roger’s article at eurekareport.com.au.

Published 13 April 2010 in ASX Investor Update

If you have ever paid a high price for a share, it is time to turn your back on speculating and start investing. Stop hoping for a spectacular short-term return and start being certain of a great long-term one. Read Roger’s 5-step plan that will teach you how to make value-investing work for you.

Published 7 April 2010 in Eureka Report

Tatts Group’s purchase of NSW Lotteries could reduce its intrinsic value. A lottery ticket might be a better investment. Read Roger’s article at eurekareport.com.au.

Published 31 March 2010 in Eureka Report

They might be able to run a business, but many managers are incompetent at allocating capital. Read article.

Published 24 March 2010 in Eureka Report

Not all health stocks are created equal. Here’s why.

Published 17 March 2010 in Eureka Report

There are many insurance stocks on the ASX but only one is attractively priced. Read article.

Published 3 March 2010 in Eureka Report

Rio Tinto’s fortunes are so closely tied to China that any ‘speed bumps’ in Chinese demand would hit the company hard. Read online.

Published 1 March 2010 in NRMA Open Road

Focusing on price leads to speculation, and speculation is not investing. Read online.

Published 1 March 2010 in Charter, The magazine for Australian Chartered Accountants

Measuring business performance correctly rather than conventionally is the key to investment success. Read article.

Published 24 February 2010 in Eureka Report

The profits don’t justify the share price, which I calculate are trading at more than twice their intrinsic value. Read article.

Published 22 February 2010 in ABC The Drum

Only three years ago some very bright private ‘equiteers’ authored a deal to buy Qantas for $11.1 billion. It fell through. Not long after, Qantas shares hit $6.06 and the business was being valued, by my arguably equally-bright fund management peers, at $12.3 billion. Today, Qantas shares are trading around $2.75 and Qantas has a market value of about $6.2 billion. Where did $6 billion go? Read article.

Published 17 February 2010 in Eureka Report

As much as I enjoy receiving dividends, I struggle to accept them. Here’s why.

Published 10 February 2010 in Eureka Report

Richard Uechtritz built revenue from $158 million to $2.8 billion in a decade. Will JB Hi-Fi be the same without him? Read online.

Published 3 February 2010 in Eureka Report

Does Asciano’s sharp price drop and bright outlook make it good value? Well no, if you consider the headwinds the company faces. Read online.

Published 1 February 2010 in NSW Seniors Card eNews

Half of all shareholders in Australia own at least one major bank in their share portfolios. Are you one of those investors? Read article.

Published 27 January 2010 in Eureka Report

Once you have identified and valued a great business, it’s time to wait for an opportunity to present. It inevitably will. Read online.

Published 20 January 2010 in Eureka Report

Building a portfolio of great businesses means ignoring the hype and the hubris … and the duds. Read online.

Published 13 January 2010 in Eureka Report

Successful investing means identifying sound businesses and buying them for the right price. It’s a world (and just three steps) away from speculating. Read online.

Published 1 January 2010 in NRMA Open Road

Roger Montgomery covers the first step investors should take to outperform the market. Read article.

Published 23 December 2009 in Eureka Report

Three rules of value investing, once learned and applied, never need change. Read online.

Published 16 December 2009 in Eureka Report

All the figures are strong for Reece Australia. If only the share price would drop below its intrinsic value … Read online.

Published 9 December 2009 in Eureka Report

Most companies are not cheap and some are downright expensive, making value harder to find.

Published 2 December 2009 in Eureka Report

Rising interest rates make it more important than ever to invest in those companies with the best returns on equity. Read online.

Published 1 December 2009 in NSW Seniors Card eNews

Has your stockbroker or adviser told you that a company’s shares were cheap because they were trading on a low PE ratio? Zip up your wallet and run!

Published 25 November 2009 in Eureka Report

Goodwill comes in two forms: economic and accounting. Don’t over-pay for accounting goodwill.

Published 18 November 2009 in Eureka Report

Transurban might have an impressive collection of assets; but the figures are not so persuasive.

Published 11 November 2009 in Eureka Report

A 50 for one split in his Berkshire Hathaway shares puts a slice of the world’s greatest investor more affordable. But is it good value?

Published 4 November 2009 in Eureka Report

CSL is delivering strong returns, has world- class management and bright prospects, yet its shares are below their level of March 6.

Published 1 November 2009 in NSW Seniors Card eNews

Investors keen on a quick profit from the Myer float may get their wishes fulfilled but the opportunity is not certain and the odds remind me of the man who jumps from a great height, hoping that the landing won’t hurt.

Published 28 October 2009 in Eureka Report

I regard P/Es as nonsense, and forward P/ Es, sector average P/Es and the like as nonsense squared.

Published 23 October 2009 in Money News Weekly

Published 23 October 2009 in Money News Weekly

Published 21 October 2009 in Eureka Report

How will the sagging US dollar affect your portfolio?

Published 14 October 2009 in Eureka Report

Roger Corbett will have a titanic challenge in turning around the good ship Fairfax.

Published 7 October 2009 in Money News Weekly

Published 7 October 2009 in Eureka Report

Investors who have enjoyed the market’s sharp rebound might be thinking about taking profits. Here are four points to consider.

Published 1 October 2009 in Crikey

Your performance in the stockmarket is more a function of the boat you get into than who is rowing. Fund manager, Roger Montgomery reveals his thoughts on Fairfax. Read the article.

Published 30 September 2009 in Money News Weekly

Published 30 September 2009 in Eureka Report

The enthusiasm surrounding the Myer float is good reason for a value investor to stay clear. So is the expected price.

Published 23 September 2009 in Money News Weekly

Published 23 September 2009 in Eureka Report

If you ever hear I’ve bought an airline, call an ambulance. Here’s why.

Published 16 September 2009 in Eureka Report

Westpac and The Reject Shop have been good investments, but now it’s time to cash in.

Published 9 September 2009 in Eureka Report

The retailer has competitive advantage, high return on equity and no debt, all of which leads to the enviable “profit loop”.

Published 2 September 2009 in Eureka Report

Cash in the bank offers better returns than iSoft, which is still trading well above its intrinsic value.

Published 26 August 2009 in Eureka Report

ASX used to be a wonderful business but is now expensive. Telstra is not as expensive, nor is it wonderful.

Published 19 August 2009 in Eureka Report

JB Hi-Fi and Cochlear post strong results, which leads to their intrinsic value being lifted further.

Published 12 August 2009 in Eureka Report

The retailer’s same-store and overall sales were strong, it is dominating its sector and its prospects are bright.

Published 5 August 2009 in Eureka Report

Westpac has strong assets, is a good corporate citizen, and I’ll be buying more shares if the price dips below intrinsic value.

Published 22 July 2009 in Eureka Report

At $2.40, few investors wanted The Reject Shop. Now at $12, it is much more popular. But where to from here?

Published 15 July 2009 in Eureka Report

Fund managers, at the right price, can be wonderful investments.

Published 8 July 2009 in Eureka Report

A sound portfolio is about buying shares in the right businesses at the right prices.