Consumer discretionary
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What we do and don’t like about Tassal
Tim Kelley
February 16, 2015
Atlantic Salmon producer, Tassal Group (ASX: TGR) has caught our eye recently. Although the business does not have a great economic track record, it appears that performance has been steadily progressing, following a period of substantial capital investment and management focus, and the half year result just released shows a continuing improvement trend. continue…
by Tim Kelley Posted in Companies, Consumer discretionary, Manufacturing.
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SAE it ain’t so
Ben MacNevin
February 5, 2015
Companies that can reinvest large amounts of capital at high rates of return are a rare breed. Such companies must be careful to preserve value when pursuing growth outside of their core competency, especially if management becomes distracted by new business opportunities. continue…
by Ben MacNevin Posted in Consumer discretionary.
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Kathmandu – Leverage works until it doesn’t
Russell Muldoon
February 4, 2015
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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Vocation, vocation, vocation
Scott Shuttleworth
February 2, 2015
After a review of the events leading up to Vocation Limited’s (ASX: VET) recent announcement (see here), you may just feel like a vacation. Events such as these can create utter destruction in the wealth of shareholders, which is unfortunate, however they also offer valuable lessons in what to watch out for. Below I’ve prepared a brief chronology of events for Vocation over the last 6 months or so. continue…
by Scott Shuttleworth Posted in Consumer discretionary.
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Did Christmas come at all?
Russell Muldoon
January 21, 2015
Following on from our anecdotal feedback we posted last week that Christmas trading came very, very late for retailers, the Australian Chamber of Commerce and Industry (ACCI) has trumped even our most negative expectations.
ACCI produce a quarterly survey of a group of businesses and their investing confidence. The latest survey for the December 2014 quarter described the all-important Christmas retailing period as “the worst for 23 years”. continue…
by Russell Muldoon Posted in Consumer discretionary, Insightful Insights.
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How did retailers go over Christmas?
Russell Muldoon
January 16, 2015
Since we last published this chart back in November, our view on listed retailing stocks remains largely unchanged and based on anecdotal feedback to date, the wealth effect from rising share markets and property prices is still not translating into spending. We have seen three downgrades (Kathmandu, Flight Centre & Oroton) and based on our research, it’s entirely possible these will not be isolated cases. continue…
by Russell Muldoon Posted in Consumer discretionary, Insightful Insights.
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What captured your interest in Q2 2014?
Roger Montgomery
January 7, 2015
Over the next few days, we will take a look back at 2014 and highlight the most popular articles based on your views and comments.
The mention of house prices falling and negative gearing was a popular post.
In May, we talked Coca-Cola Amatil share price having declined by 40 per cent, and the duopoly that makes up Australia’s grocery retail landscape has putting the company on a strict diet of shrinking volumes, values and loss of market share to Schweppes and more particularly, the category known as “Private Label” soft drinks.
The forecast Australian population growth from 23 million to 40 million by 2060 bodes well for self-storage providers – and small-cap National Storage is no exception. We take a closer look at how the third-largest self-storage provider is positioned. Note, you will need to log in as a subscriber to see this paper.
by Roger Montgomery Posted in Consumer discretionary, Insightful Insights, Investing Education, Property, Value.able.
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Key issues for 2015
Roger Montgomery
January 5, 2015
In December I wrote an article for the ASX Investor Update, I thought I would share my thoughts with you as a welcome back to the year ahead.
What you should be watching out for in 2015 and what to expect with property prices, index funds and shares. continue…
by Roger Montgomery Posted in Companies, Consumer discretionary, Energy / Resources, Financial Services, Insightful Insights, Investing Education.
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Corporates behaving badly?
Roger Montgomery
December 22, 2014
Court finds Coles engaged in unconscionable conduct and orders Coles pay $10 million penalties.
The Federal Court has today, by consent, made declarations in two proceedings instituted by the ACCC that Coles Supermarkets Australia Pty Ltd engaged in unconscionable conduct in 2011 in its dealings with certain suppliers.
The Court has also ordered Coles pay combined pecuniary penalties of $10 million and costs. continue…
by Roger Montgomery Posted in Companies, Consumer discretionary, Insightful Insights.
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Are you throwing the baby out with the bathwater?
Roger Montgomery
December 22, 2014
As we start to turn our minds to a well-earned break, we cannot help to ponder what the year ahead might unearth and whether we’ll find something useful and attractive that others have thrown out.
What we know today however, is that Materials and Energy stocks are under the pump from rising supply and falling demand. Some of them, along with those in the mining services game, will shutter operations or go broke – don’t forget there are over 700 mining services companies in Australia and 90 per cent of them are unlisted. Given that China is forecast by the US Conference Board to be growing at only 5.5 per cent in the next few years and by 3.5 per cent in the years to 2025, it is difficult to see any rapid turn around in the economics of materials exploration, mining and production. continue…
by Roger Montgomery Posted in Consumer discretionary, Energy / Resources, Financial Services.
