In this interview with Ross Greenwood, Stuart Jackson discusses investors chasing dividend yields.

by Stuart Jackson Posted in Radio.

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The law of unintended consequences states that actions – particularly by government – can have adverse effects that are unanticipated or unintended. This law could soon play out as a result of lending restrictions placed on the major banks by the Australian Prudential Regulation Authority (APRA). Continue…

by Stuart Jackson Posted in Market commentary.

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These days, it’s hard to go far without being distracted by outdoor advertising. Displays are everywhere: from roadsides to shopping malls to bus stops. We believe the industry is poised to enjoy continued revenue growth. And this should benefit businesses like oOh!media and APN Outdoor – which have tabled a $1.6 billion merger – and QMS Media. Continue…

by Stuart Jackson Posted in Companies.

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Seek is a high quality business that has been a core part of our portfolio for a few years. We like Seek for a number of reasons. These include its dominant market position and its ability to pull the pricing power lever. The company lived up to our expectations when it recently delivered its HY17 results. Continue…

by Stuart Jackson Posted in Companies.

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At Montgomery we focus heavily on a company’s prospects. This refers to the outlook for the company’s earnings growth. While a growing earnings stream is valuable, not all growth is equal. In this video Stuart discusses two types of growth: organic and acquisition.

by Stuart Jackson Posted in Video Insights.

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IDP Education (ASX:IEL) is a provider of international student placement and English language testing services. It also owns English language schools in South East Asia and organises educational events and conferences. IDP’s strong result for the six months to December 2016 saw a spike in its share price, and confirmed our faith in this high quality business. Continue…

by Stuart Jackson Posted in Companies.

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If you want to find more signs of stress in the Australian economy, then look no further than the recent result of Genworth (GMA:ASX), our largest mortgage insurer. In its announcement, GMA noted rising delinquencies, moderating economic conditions, and increasing underemployment. The result also signals that bad debt provisions may be a headwind for banks in FY18. Continue…

by Stuart Jackson Posted in Companies.

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The outlook for Australia’s banks in 2017 is now tougher given the rerating of the stocks the last quarter of 2016. The expectations built into share prices have clearly lifted in 2017.  The big change we expect is a slowing of loan book growth. If interest rates have bottomed, affordability of debt will suffer. Market expectations imply a continuation of the growth rates we’ve seen over the past decade or two, but if the cost of debt stops falling this could act as a drag on loan book growth and the broader economy. Funding costs continue to rise, pressuring net interest margins. Slowing loan book growth is also likely to increase competitive pressure as banks look to gain market share as an offset.

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by Stuart Jackson Posted in Editor's Pick, Financial Services.

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As we have noted before, the outlook for loan book growth is one of the main factors that drive the prospects for bank earnings growth. The issue for the banks – and investors in the sector – is that rates are more likely to rise in the medium to longer term, and this will put downward pressure on loan book growth.
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by Stuart Jackson Posted in Financial Services.

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Our retailers are about to face a whole new challenge. Amazon has announced it will trial a new concept store in the US that uses its ‘Just Walk Out’ technology to change the format of a traditional grocery store by removing cash registers and the check-out process. Customers simply use the Amazon Go app, then take the products they want, and go. It’s set to come to our shores in late 2017. Continue…

by Stuart Jackson Posted in Companies, Editor's Pick.

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