It is winter in the United States, and there has been a severe outbreak of influenza. New York State declared a public health emergency on Saturday, with nearly 20,000 cases of flu reported across the state so far this season (compared with 4,400 cases reported in the whole of last season). There has been a widespread public services campaign to encourage people to receive vaccines, and under the emergency order pharmacists in New York will be allowed to administer flu vaccinations to patients between 6 months and 18 years old, temporarily suspending a state law that prohibits pharmacists from administering immunisations to children.
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by Ben MacNevin Posted in Health Care, Insightful Insights.

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At Montgomery Investment Management we are pleased to learn that Graham Turner of Flight Centre has been named the best value Chief Executive Officer for 2012 by Egan & Associates.

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by Ben MacNevin Posted in Insightful Insights, Tourism.

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With the number of Australian friends who seemed to be enjoying White Christmases (overseas holidays) this year, I wanted to briefly discuss an often touted criticism of Webjet’s business model.

Like many businesses, customers can easily search their website free of charge for what they are after (in the case for flights, room nights, holiday packages), but then purchase the product and bypassing the booking fees by going directly to the supplier – in this case Airlines, hotels, car rental agencies. This is the core reason Webjet’s business model was considered ‘unsustainable’.

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by Ben MacNevin Posted in Insightful Insights, Tourism.

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Fairfax have announced that they are selling their holdings of Trade Me group, which is an online classified platform in New Zealand. Despite Trade Me being one of Fairfax’s key performing assets (comprising $86 million of the group’s $506 million in earnings in FY12), it is being sold down to reduce Fairfax’s net debt.

Many would argue they are cutting down the roses to water the weeds but before jumping on that bandwagon, it suggests to me they have a plan. I reckon its an online plan and one they believe they can repeat.

The proceeds are required to “provide the financial flexibility to invest and to complete the company’s structural transformation”. While it makes you wonder how successful the company’s “structural transformation” will be if they offload this river of gold I reckon they have a plan to repeat their Trade Me success. The database is huge and with the right offering(s) they have the opportunity to dominate mobile the way no-one has yet. Oh, and its interesting that the share price is the closest its been to intrinsic value (according to Skaffold.com) in a decade…

by Ben MacNevin Posted in Media Companies.

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The Federal Open Market Committee stated in its latest release that it is willing to continue with its easing measures until the unemployment rate is below 6 ½ per cent. This is remarkable, as is it officially states that the Federal Reserve is using its monetary policy tools to bring down the unemployment rate to below a certain level, when historically its focus has been on maintaining stable inflation – effectively, if inflation is maintained at a certain rate, unemployment should take care of itself.
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by Ben MacNevin Posted in Insightful Insights.

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Players at next week’s Australian PGA Championship have been reminded to be careful of their comments of the event with social media. Ironically, it has become one of the most talked about events in Australian sport – and this all due to the erection of a few dinosaurs around the golf course.

With all the comments about whether this detracts from the traditional form of the game or whether it is good for the game itself, it is generating “buzz”. And in business, sustainable value can be generated by transforming “buzz” into intangible assets – just look at the story of Red Bull.
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by Ben MacNevin Posted in Insightful Insights.

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It was pleasing to see figures released last week by Tourism Research Australia that revealed Chinese tourists were still flocking to Australia’s shores. According to the report, there were 573,071 Chinese arrivals in the 12 months to September, which was a 17 per cent increase over the previous corresponding period.

While there has been a lot of commentary on the state of the tourism industry, there is one company that is frequently cited as the shining example of a group that can successfully capture the opportunities in this growing tourism market, and that is Crown Ltd.

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by Ben MacNevin Posted in Insightful Insights, Tourism.

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Few Australian management teams and their boards have been successful over long periods of time in ‘rolling’ up businesses under one roof. Inevitably, too much is paid; they struggle to deploy systems to drive scale and efficiencies; and retaining key management becomes a key problem once their lock-in period expires. It’s why we are so cautious of business strategies that revolve largely around acquisitions to grow the business. While it is easy to ‘grow’ by simply purchasing another business’ earnings, unless the return on the equity employed remains stable or improves, such capital allocation decisions will erode shareholder wealth over time.

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by Ben MacNevin Posted in Companies, Insightful Insights, Insurance.

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With Christmas trading moving into full swing, everyone’s focus seems to be on the retail climate in Australia, with particular themes in the media springing to mind:

· Online sales are making it difficult for bricks and mortar stores

· Interest rates need to be cut further to stimulate spending

· The failure of Click Frenzy…

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by Ben MacNevin Posted in Companies, Consumer discretionary, Investing Education.

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