And the gold medal goes to…
As we’ve pointed out recently, it’s getting harder and harder to find quality Australian businesses with really strong prospects. Which is why we are quite excited about Altium (ASX:ALU) and Vitagroup (ASX:VTG). Their profit results for FY16 were arguably two of the reporting season’s best.
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.
Jade
:
Hi Roger,
Just finished reading your book “Value-able” for the 2nd time in 3 weeks and want to say how amazing this book is. Well done! Congrats.
And now that ive buttered you up a little, ive used your valuation tables to value VTG and have come to an estimate of $7.05, im hoping ive done it correctly and wondered if this valuation sounds correct to you?
Keep up the good work!
Roger Montgomery
:
The valuation is always based on the inputs. What inputs have you used Jade?
Paul Cooney
:
Hi Roger
Was interested in your current thoughts re VTG. As we have seen in recent weeks a number of quality stocks, such as HSO have fallen considerably. Do you still see VTG as a fundamentally good stock and last week’s pull back as a possible opportunity to acquire a good business at a more reasonable price, thanks
Roger Montgomery
:
With respect to VTG we are leaning towards the rumours of lower remuneration from telstra to licences ‘generally’ being right but we don’t know whether this will apply to all operators nor whether it is a way for Telstra to pick and choose which licensees it works with – i.e. forcing marginal operators out. Keep in mind that VTG is producing a billion dollars of revenue for Telstra, so one suspects they won’t want to hurt the successful operators.
Paul Cooney
:
Thanks Roger
Wayne
:
Do you think that VTG is still a buy? You were recommending it via livewire even thought Maxine sold a huge chunk due to divorce and now they want to move into men’s clothing and just now they come out indicating that they are in discussions Telstra about contracts. A very confusing time.
Roger Montgomery
:
Hi Wayne, Are you investing in shares directly based on what you read in blogs and what you hear commentators and investor stalk about on TV?
Majella
:
Hi Roger,
For someone wanted to buy into ALU and VTG, should we hold off and wait to see if the market falls after the USA election. Or do you recommend buying these shares at their current prices.
Roger Montgomery
:
Hi majella,
We don’t ‘recommend’ you do anything. Rather than trying to investing like us, you may be better served speaking to an advisor about investing with us.
Lachlan
:
70% and 100% returns on these two thanks to you Roger. In fact, after reading your book, the only stock that hasn’t achieved a very impressive return (yet) is ISD. But I have no doubt that as the good news comes out, this will approach its intrinsic value too.
So I just wanted to say thank you to you and your team!
Roger Montgomery
:
Delighted to hear it Lachlan. And of course it may yet be that one or more of them disappoints.
rob barnett
:
Roger,
I think that you agree that companies over the long run can only achieve high returns on invested capital if they have a sustainable competitive advantage or an economic moat. The definitive author on this subject has been Pat Dorsey (formerly of Morningstar). In order to help my understanding of your investing thesis for these companies, using Doresey’s broad definitions, can you please describe the moats of ALT & VTG that will sustain their current returns?
Many thanks.
Roger Montgomery
:
Hi Rob,
Use the search bar to review everything we’ve written here at the blog and also review the press and media section.
Bernie Kuran
:
Skaffold helped me identify VTG as a business to consider owning in my SMSF back in Feb 2014. It’s been a great ride so far.
Kelvin Ng
:
Great call on these companies. Well done!
Kelvin