Let’s say four years ago you were offered the opportunity to buy a portfolio of well-known businesses for $272.3 billion, which are expected to generate $24 billion in after-tax earnings. While this implies an earnings yield of 8.8 per cent, you decide to forgo the investment. Continue…

by Russell Muldoon Posted in Financial Services, Insightful Insights, Investing Education.

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One thematic that stood out in the latest reporting season was the increase in dividend payout ratios across listed companies. Whilst this no doubt pleases income hungry investors right now, many would be unaware that an insatiable hunger for dividends today could actually cost you a tonne of money longer-term. Continue…

by Russell Muldoon Posted in Market commentary.

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In recent times the market has been captivated by the ‘chase for yield.’  This phrase simply represents the symptom of the repressive money printing acting on interest rates globally. As a result of these low interest rates, funds are being ripped out of the safety of cash and poured into riskier assets in the pursuit of higher returns. Continue…

by Russell Muldoon Posted in Companies, Insightful Insights, Market Valuation.

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Given its relatively undemanding market price, we decided to take a cursory glance at Nine Entertainment Co. Holdings Limited (ASX: NEC). While the shares might look attractively price however, there’s a good reason we believe they aren’t.  Continue…

by Russell Muldoon Posted in Companies, Technology & Telecommunications.

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We take a look at Sirtex Medical Limited’s half-year result to 31 December 2014. According to Portfolio Manager, Russell Muldoon, the result is much stronger across the board, than previously modeled, particularly in dosage sales (volumes), price increases and average selling prices.

Sirtex’s half-year result is further evidence of our current belief in the business’s underlying strength and management’s strategy.

Continue…

by Russell Muldoon Posted in Companies, Health Care.

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Below you will find an overview of today’s results. Particularly, we have focused on those businesses that have above average market liquidity, a measure representative of their size.

As an overall quick summary, what we have seen to today, across a broad range of sectors including port operators, retailers, banks, engineering and healthcare companies, is generally no or low growth. Continue…

by Russell Muldoon Posted in Market commentary.

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We take a look at CSL Limited’s half-year result to 31 December 2014. CSL is a global specialty biotechnology company that researches, develops, manufactures and markets products to treat and prevent serious human medical conditions. While the market is focusing on Immunoglobulin, and the potential supply growth from competitors, the story is much bigger than this and we should avoid getting too caught-up in the short-term.

CSL is a major holding in both The Montgomery Fund and The Montgomery Private Fund.

Russell Muldoon is the Portfolio Manager of The Montgomery [Private] Fund. To invest with Montgomery, find out more.

by Russell Muldoon Posted in Health Care, Whitepapers.

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For the past few months we have written regularly about the headwinds facing the retail sector. Numerous retailers have downgraded sales and earnings, which were subsequently followed by share price declines. On Monday however, one listed retailer separated itself from the pack with the most sobering trading update yet. Kathmandu (ASX: KMD) has historically been favoured by Montgomery Investment Management. Yet with a business model that has a high degree of operational leverage, we were quick to exit the position in 2014 as it became clear that the company would not be immune to the deteriorating industry conditions. We have discussed the concept of operational leverage on many occasions. Retailers are subject to high levels of fixed costs such as rent, wages and electricity, which means that any price discounting will have a profound impact on the bottom line: a one per cent reduction in gross margin can often translate into a five per cent reduction in earnings. Continue…

by Russell Muldoon Posted in Companies, Consumer discretionary, Insightful Insights.

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Here is a simple investing rule: share prices will follow a business’ profitability over the long term. In the words of Warren Buffett, “Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value”. Continue…

by Russell Muldoon Posted in Insightful Insights, Investing Education.

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