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An alternative way to look at the largest ASX-listed companies

08032019_looking at companies differently

An alternative way to look at the largest ASX-listed companies

One of the more profound changes to the practice of investment management in recent years has been the improvement in the availability of information; a change driven by both regulation and technology.

Information that once was made available selectively to those with access to management meetings is now broadcast widely via carefully scripted presentations that are released to the market at the same time as they are made, often via webcast. Financial data that once was available only to those who made a careful study of annual reports is now hoovered up electronically by powerful computers and stripped of its insights in short order. Also, new sources of information are springing up constantly, in the form of things like social media, satellite images, and a host of public and proprietary data sets generated by connected machines and sensors.

As the flow of information speeds up and traditional sources of informational edge get eroded, investors need to be on their toes to keep up.

One potentially interesting and new-ish source of information on listed companies comes from Glassdoor.com, which allows employees to anonymously review companies and their management. Glassdoor provides employee-generated ratings for various things that might be relevant to people making career decisions, including work/life balance, career opportunities and compensation.  It also provides ratings on things that might be of interest to investors, including ‘CEO Approval’, and the extent to which employees see the company as having a ‘Positive Business Outlook’.

Considerable care is needed in interpreting these sorts of data.  For example, it is likely that a company undertaking large scale restructuring would not be especially well-rated, even though the changes may be shareholder-friendly, and comparisons across different industries may be difficult to make. Good or poor ratings may also reflect things that are already well-known and so have limited investment value. Finally, in many cases, sample size may just be too small to draw a valid estimate.

With those caveats out of the way, it might be fun to look at how Australia’s largest listed companies compare on some of Glassdoor’s ratings. The table below sets out some of the larger ASX names sorted in order of ‘Positive Business Outlook’.

Company CEO Approval Positive  Business Outlook
Macquarie 99% 71%
Aristocrat Leisure 84% 59%
CBA 87% 58%
Transurban 84% 57%
Westpac 85% 55%
CSL 66% 55%
Woolworths 85% 55%
ANZ 89% 54%
Rio Tinto 85% 52%
Woodside 69% 50%
Brambles 67% 48%
ASX 69% 48%
Coles Group 68% 46%
NAB 67% 41%
BHP 74% 39%
Suncorp Group 71% 35%
QBE 53% 35%
AGL Energy 68% 35%
Telstra 35% 31%
Santos 64% 29%
Amcor 65% 28%
Insurance Australia Group 57% 17%

On these measures there appears to be daylight between Macquarie Group and the other companies listed, with CEO Approval especially high at 99 per cent. Shemara Wikramanayake has clearly earned the respect of her colleagues since commencing with Macquarie back in 1987.

Also interesting is the position of Telstra, whose poor rating may simply reflect the well-understood issues arising from the transition to the NBN and the associated need for restructuring and headcount restructuring.

Finally, the major banks appear reasonably well placed, although NAB is something of a laggard. Hopefully this reflects a justifiably positive view of the outlook for credit growth in Australia, and not blissful ignorance of the pressures currently being felt in residential property.

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Tim joined Montgomery as Head of Research and Portfolio Manager of The Montgomery Fund in July 2012. Prior to this, Tim was an Executive Director in the corporate advisory division of Gresham Partners, where he worked for 17 years. Before joining Gresham Partners, Tim worked for McKinsey & Company for four years, where he was involved in strategic consulting in both Australia and Denmark.

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.

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2 Comments

  1. Yep, I can’t see how this could be reliable. The internal ratings at my own workplace (not with glass door) involved the management making staff publicly sign that that they had done the survey. One has to put in demographic info that provides a good means of management figuring out who had done the survey. What is hilarious is that disgruntled staff game the survey by putting in false demographic data so as to avoid identification.

    I guess there is no substitute for good old fashioned socialising though that’s very time consuming.

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