What A1 companies does Roger Montgomery think are the best value right now?
Roger Montgomery reveals the A1 companies he thinks are the best value for money right now. Watch the interview.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Eamon
:
Thanks Roger, it took me years to accumulate all that wisdom. I’m only 24, and I see more learning ahead. Never lose focus!
Eamon ;)
Rob Vernon
:
Saw your show on switzer would like to learn more about your approach to investing.
Roger Montgomery
:
Hi Rob,
Thank you for writing. Grab a copy of my book to get started. I put in everything that you need to approach investing the way I think is rational.
Greg
:
Hi Roger,
What the difference between A B & C and 1 2 3 4 & 5?
Simple question huge answer.
Is this all covered in soon to arrive book?
In the video you say TRS was a A1 but is now an A2 because it took on some debt.
Is the difference between A1 & A5 just the level of debt?
Thanks Greg
Roger Montgomery
:
Hi Greg,
You are right. Huge answer! Cannot do it here. Like Buffett I am happy to discuss all the elements that go into the quality scores so that you can work it out. Debt is one of the more than 15 elements.
Eamon
:
Im going to try and guess some of the inputs to your valuation Roger, my view is it must consist of quantitative and qualitative factors.
So for qualitative factor i would assume you might have included;
1 – the actual sector the business operates under, (airlines, ie:Qantas, Virgin Blue would be deemed bad, constrast the big 4 banks with oligopoly moats with alligator around them would be deemed good)
2- Honesty of Managements, as if they are dishonest their intelligent and energy will rob you of all your wealth through false accounting pratices (Enron).
3- Whether the business has a franchise, the bigger the better as this creates a moat around its castle protecting it from all compeitors.
4- How simple does one understand the business.
So for qualitative factor i would assume you might have included;
5-Consistent track records of 6-high ROE above 7-expected return from the investor.
8- New equity inflow and the 9-returns attached to this increase.
10- Level of Debts, high is bad as banks covanents can be breach so thats a risk to the equity holder.
11- liquidity in the stock? questionable.
12- Im out of ideas now!
EAMON!! (maybe i’ll through in another one, how rational is the market at the moment, fear? or greed? as this will have bearing on short term gyrations)
Roger Montgomery
:
Could be Eamon. I am enjoying listening to your guesses. You may come up with something I haven’t considered.