In a recent post here, we explored the Online Travel Agent (OTA) space and came away with a view that barriers to entry in the industry were arguably low, which went a fair way to explaining why there are so many agencies already in existence. It appears that this piece was unknowingly well-timed. Continue…

by Russell Muldoon Posted in Insightful Insights.

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One of the core tasks of an analytical role such as being an equity or business analyst, is really understanding what makes a business tick. Why does the business exist? Why do clients use their product or service? How do they monetise what they do? How sticky are their clients and how long will it last given the ever threat of competition and obsolescence? These are just some of the basic questions that always need to be asked when trying to understand a business and ultimately frame an investment decision. Continue…

by Russell Muldoon Posted in Insightful Insights.

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Well, what a difference a few weeks can make in financial markets. It seems that based on the daily moves higher in all things commodities, the bears gave up en-masse on their shorts. Just overnight oil rose another 5.5 per cent and iron ore with 62 per cent content jumped up an incredible 19 percent. The biggest one-day gain since 2009 by some margin.

To put these moves into context however, a few comments from a recent Bloomberg article below are noteworthy;

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by Russell Muldoon Posted in Insightful Insights.

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If you are a close observer of the share market and the subsequent release of material information such as half-year and full-year reports, you may be perplexed to see a stock price fall after the company increased or even delivered record earnings, or conversely, similarly confused as to why a stocks price would jump after the company announces earnings that decreased producing an ugly set of results? Continue…

by Russell Muldoon Posted in Insightful Insights.

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With reporting season underway, this is the time we get to revisit the assumptions behind many of our current portfolio holdings. Through large amounts of data crunching, we are also able to compare and contrast management teams and businesses we hold against others that we do not and potentially identify opportunities. Continue…

by Russell Muldoon Posted in Companies, Stocks We Like.

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Ever since GUD Holdings (ASX: GUD) acquired Brown & Watson International (BWI) in early July 2015, we have had the business on a watch, wait and learn brief.

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by Russell Muldoon Posted in Insightful Insights.

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Further to our recent blog post on Altium Limited (ASX:ALU), Altium has today announced that it has signed an OEM agreement with Dassault Systèmes to introduce a new SOLIDWORKS Electronic Computer – Aided Design (ECAD) product based on Altium’s Printed Circuit Board (PCB) software technology. Continue…

by Russell Muldoon Posted in Companies, Insightful Insights.

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In our domestic funds at Montgomery, one of the reasons we have had a very pleasing year both in absolute and relative terms, is largely due to the fact that we have been able to avoid having our portfolios exposed to businesses facing significant economic headwinds. Continue…

by Russell Muldoon Posted in Insightful Insights.

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A lot has been written about the woes of the resources sector recently with a similar amount of energy spent trying to work out when is the right time to expect ‘mean reversion’. A simple theory that although sounds complex, really just suggests that prices and returns eventually move back towards the mean or average as time periods are extended. Given the resource sector has been a material underperformer of late, the theory suggests you should reallocate a portion of your portfolio to such businesses in the expectation (or hope) that if such an event occurs, recent underperformance will lead to outperformance.

Sounds good in theory.

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by Russell Muldoon Posted in Energy / Resources, Insightful Insights.

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“Revenue is vanity, profits are sanity and cash flow is reality”. That was a quote I heard from a very successful business man and a company I was fortunate enough to be researching in my formative years as an analyst. Thankfully, it stuck.

Poor cash management practices are the number one reason why businesses go bankrupt. Without the proper amount of cash on hand, reckless spending on unprofitable ventures or worse a business that doesn’t produce any, entities can run into trouble quicker than you think wreaking havoc on your portfolio. Continue…

by Russell Muldoon Posted in Insightful Insights.

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