Insightful Insights
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Looking at Ansell’s Long Term Incentive Plan
Ben MacNevin
November 18, 2014
Upon examining Ansell’s (ASX:ANN) Long Term Incentive Plan for management, we have noticed some interesting developments in the company’s capital position. continue…
by Ben MacNevin Posted in Consumer discretionary, Health Care, Insightful Insights, Investing Education.
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Free Trade or simply Free?
Roger Montgomery
November 17, 2014
Is the chest beating and plumage preening about and over the Free Trade Agreement a bit of a joke?
Parliamentary Secretary to the Prime Minister, Josh Frydenberg, said the deal to be signed today with China could be worth (note the word ‘could’) up to $18 billion to the Australian economy over the next few years. I think he actually said 10 years. If that’s the case, it’s worth $1.8 billion per year.
Let’s put that into context. Our total annual iron ore exports are 600 million tonnes. At US$80/tonne, the total value is A$56 billion. The total value of the FTA could be wiped out by a US$2.79/tonne move in the iron ore price.
The full terms of the deal are expected to be signed this afternoon and the details released then also. Stay tuned.
by Roger Montgomery Posted in Economics, Insightful Insights, Market commentary.
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Property; be careful! Equities; get ready!
Roger Montgomery
November 17, 2014
It doesn’t seem that long ago, but the Global Financial Crisis-inspired rout in the stock market began in late 2007 and even though it bottomed in March of 2009, the symptoms that triggered the collapse, are even worse today.
But before you go jumping at shadows keep in mind that while interest rates remain low, the status quo is very likely to be maintained. Indeed low or lower rates could trigger an equity bubble before any correction is experienced. continue…
by Roger Montgomery Posted in Economics, Insightful Insights, Investing Education, Property, Value.able.
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Good news this week for two Montgomery holdings
Roger Montgomery
November 14, 2014
Firstly, Seek Limited (ASX:SEK) subsidiary Zhaopin Limited (NYSE:ZPIN) received a boost when it reported 3Q14 revenue growth of 32 per cent year-on-year (YOY); and EBITDA growth of 34 per cent YOY.
We will be investigating why the unaudited result was so strong given the company had been growing at around 11 per cent YOY; and Zhaopin’s key competitor, JOBS, reported 3Q14 revenue growth of just 13 per cent YOY. The result, which was reported under A-IFRS (Australian Accounting standards), will differ to the results prepared under GAAP for its US listing. continue…
by Roger Montgomery Posted in Financial Services, Insightful Insights, Investing Education, Technology & Telecommunications, Value.able.
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Iron Ore Pricing: Where is the floor?
David Buckland
November 14, 2014
Citigroup Inc. analyst, Ivan Szpakowski has slashed his iron-ore forecast to average US$65/tonne in 2015.
Ivan is looking at the iron-ore price bottoming in the September 2015 quarter at an average US$60/tonne on the back of renewed supply growth and further demand weakness. About 140 million tonnes of export supply growth is expected in 2015, with the bulk of this coming from Rio, Vale and BHP.
When the Australian Federal Budget deficit of A$30 billion for the 2014/2015 financial year was announced in May, the iron-ore price was above US$100/tonne and few analysts could see it would decline to the current levels.
So far this calendar year, the iron-ore price has declined 44 per cent from US$131/tonne to US$74/tonne. If Ivan is right, there are further declines expected.
As we have previously noted, it is worth remembering that for decades prior to 2004, the price of iron ore traded between just US$10/tonne and US$20/tonne. The price then rallied to $187 in 2011. It has been falling ever since. Today’s experts guessing iron ore’s near term levels are the same people who failed to see the current levels materialising.
by David Buckland Posted in Energy / Resources, Insightful Insights.
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AFR: Just how good are our banks
David Buckland
November 13, 2014
The Australian Financial Review’s Jeremy Chunn published an excellent piece this week taking a look at the major banks. With full-year results for three of the four major banks delivered in the past two weeks, Jeremy asked five professional investors for their outlook on the sector. This included a London-based analyst for perspective on the value of Australian banks relative to international peers.
The Montgomery team has generated meaningful insights from our research and analysis of the banking space and the impact of the changes emanating from the Financial System Inquiry. Read the article to below to find out which bank is the stand out pick in an industry facing increasing challenges.
Click here to read the article on the AFR’s site.
Please note, you may need to be an AFR subscriber to view this article.
by David Buckland Posted in Companies, Financial Services, Insightful Insights, Montgomery News and Updates.
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Stress Testing The Banks
David Buckland
November 12, 2014
Wayne Byres, Chairman of Australian Prudential Regulation Authority (APRA) recently made a mockery of the Banks’ self-administered stress tests. continue…
by David Buckland Posted in Companies, Financial Services, Insightful Insights, Montgomery News and Updates.
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Healthscope vs Ramsay Health Care
Ben MacNevin
November 12, 2014
Healthscope (ASX: HSO) and Ramsay Health Care (ASX: RHC) hotly contested the Northern Beaches hospital tender at Sydney’s Frenchs Forest, with Healthscope emerging victorious. Should Ramsay shareholders be concerned? continue…
by Ben MacNevin Posted in Health Care, Insightful Insights, Montgomery News and Updates.
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The need for speed
Scott Shuttleworth
November 11, 2014
Last week I posted some data from the Australian Bureau of Statistics to find out how fast Australia’s appetite for downloads had been growing over the past few years. If you haven’t read it, you can find the post here.
Now I pose a different question although slightly related, is there a relationship between the speed of internet offered in a country and demand? Interestingly enough there is. continue…
by Scott Shuttleworth Posted in Insightful Insights, Technology & Telecommunications.
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Are you being rewarded?
Tim Kelley
November 10, 2014
Proponents of the efficient markets hypothesis argue that the only way to achieve higher investment returns is to take more risk. Clearly, there’s some truth to this – very low risk asset classes (like cash) tend to deliver lower returns – on average – than higher risk asset classes (like shares). However, when you look within the shares asset class, the picture is rather more interesting. continue…
by Tim Kelley Posted in Insightful Insights, Investing Education.
