Companies
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Why the big banks are underperforming the market
Stuart Jackson
April 23, 2020
If you’re holding shares in an Australian bank – particularly National Australia Bank (ASX:NAB), Westpac (ASX:WBC) or Australia and New Zealand Banking Group (ASX:ANZ) – then you’re likely feeling less wealthy than you were back before Coronavirus was a household word. In just two months, the market has priced in the impact of loan losses by the banks and the potential need for dilutive equity raisings. And the worst may not be over. continue…
by Stuart Jackson Posted in Companies, Financial Services.
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Four mining services companies where we see value
Dominic Rose
April 23, 2020
Investing in small cap mining services firms is not for the faint hearted given their exposure to the commodities cycle. But with the sector down around 40 per cent year to date (vs Small Ords down 23 per cent), and most major miners continuing to produce, we see value as attractive for the risk. There are four companies we particularly like.
continue…by Dominic Rose Posted in Companies, Stocks We Like.
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Why Flight Centre needed to raise capital – and fast
Joseph Kim
April 20, 2020
With the Australian share market rallying strongly in April off the 25 March low, there has been a spate of capital raisings by cash-strapped companies looking to reduce debt and/or ‘pay the bills’. One of those is travel retailer, Flight Centre (ASX:FLT). In this 2-part blog, I outline our assessment of the business in the face of COVID-19 risks and the likelihood of negative earnings for the foreseeable future. continue…
by Joseph Kim Posted in Companies.
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Has NEXTDC caused some stormy weather in shortville?
Gary Rollo
April 15, 2020
Short selling is a consistent feature of the equity market and much was written earlier this year about Tesla’s equity journey with its short sellers. But what about the short selling story at NEXTDC (ASX:NXT), one of Australia’s most shorted stocks? Did shorting NXT pay off? continue…
by Gary Rollo Posted in Companies, Stocks We Like.
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Bank investors – your dividends could soon be put on ice
Stuart Jackson
April 9, 2020
Each day the coronavirus pandemic sets another domino to fall. The latest could be bank dividends. It’s now very likely that our banks will cut – or even postpone – their dividends this year. If they do, it will be a major blow to many retail investors and retirees. continue…
by Stuart Jackson Posted in Companies, Financial Services.
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WHITEPAPER
INTEREST RATES, THE BEST IT GETS. IT’S TIME TO DEPLOY CASH
Curious about the investment landscape in 2024? It appears that the current market offers a plethora of enticing opportunities for investors, a rarity not experienced since pre-pandemic times. This unique scenario stems from a confluence of factors, including elevated yields and comparatively rational equity valuations.
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Beware wealth destroying capital raisings
Roger Montgomery
April 9, 2020
The stock market sell off validated an internal decision to abstain from the bubble in the months leading up to January 2020, but it wasn’t the only forecast that came to pass. We also discussed at length the likely prevalence of deeply-discounted capital raisings by companies needing to shore up balance sheets, to weather the COVID-19 lockdowns or simply be rescued from insolvency. continue…
by Roger Montgomery Posted in Companies, Market Valuation.
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Is NSR cheap at its current price?
Roger Montgomery
April 6, 2020
COVID-19 has thrown the investing rule book out the window for now. Having patiently held cash for two years amid an unwillingness to participate in the unbridled enthusiasm that saw shares trade at record multiples despite declining prospects, we are now finding once-in-a-decade opportunities. continue…
by Roger Montgomery Posted in Companies, Editor's Pick, Stocks We Like.
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Your questions: Markets and Macroeconomics
Roger Montgomery
March 31, 2020
We recently ran a webinar explaining how we had positioned our domestic funds as markets were peaking in February and ahead of the Coronavirus pandemic. Attendees were shown our testing data analysis, as well as our suggested framework for navigating the market meltdown. At the conclusion of the webinar, we invited attendees to submit their questions only some of which we were able to answer in the time allotted to us. continue…
by Roger Montgomery Posted in Companies, Market commentary.
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Three small cap retailers to watch
Dominic Rose
March 30, 2020
Small cap discretionary retailers have been among the biggest losers in this market rout. But, sifting through the wreckage, we’ve found some great businesses that could bounce strongly if the worst-case scenario being priced in by the market turns out better than expected. continue…
by Dominic Rose Posted in Companies, Consumer discretionary, Stocks We Like.
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Is the US about to experience a nasty spike in coronavirus cases?
Roger Montgomery
March 11, 2020
With markets bouncing it is worth making a couple of observations. Firstly, there were periods during the Global Financial Crisis when the market rallied as much as 10 per cent. Secondly, there is a solid relationship between really ugly COVID-19 case spikes and inadequate early testing. continue…
by Roger Montgomery Posted in Companies, Market commentary.
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