Insightful Insights

I had the privilege this week of joining a prominent group of experts at a breakfast to discuss director obligations within the context of continuous disclosure. continue…

by Roger Montgomery Posted in Insightful Insights.

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Brambles, the world’s largest pallet provider, has proposed to demerge its Recall business, which specialises in document management. The company has recently held its Annual General Meeting (AGM), and the board had much to say about the value that would be created for shareholders from the transaction.

Question: is this concept of value creation different to how we consider it at Montgomery Investment Management? continue…

by Ben MacNevin Posted in Companies, Insightful Insights.

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When we last provided an update on AGI, the share price was progressing towards our $5.00 valuation at a pace that was taking us by surprise. continue…

by Russell Muldoon Posted in Companies, Insightful Insights.

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When the Labor Government proposed changes to the Fringe Benefits Tax in July, it sent shock waves through the novated leasing industry. While the Coalition rejected the proposed changes when it was subsequently elected, companies like McMillan Shakespeare (ASX: MMS) experienced a sharp decline in business activity during this period. It now seems however that conditions are returning to normal. continue…

by Ben MacNevin Posted in Companies, Insightful Insights.

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Pop quiz everyone: if a company’s market value reflects what is considered to be its “fair value”, will this value change over the long run? continue…

by Ben MacNevin Posted in Insightful Insights, Intrinsic Value.

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The financial markets are on edge as the United States once again comes to the brink of defaulting on its debt. Many commentators have claimed that it is impossible to predict the scale of the fallout if Congress fails to reach a deal, and hence are unsure of how to act. But Central Banks may already be adjusting their reserve holdings as the credit quality of the country deteriorates. continue…

by Ben MacNevin Posted in Economics, Insightful Insights.

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For many investors, the sharemarket seems daunting and impossible to understand. One day it’s down on fears that interest rates might rise or that the US will default. The next it’s up on confirmation that they have or on speculation that the debt ceiling will be raised.

In our experience, confusion amongst investors exists, at least partly because of the human tendency to complicate matters. That, and the fact that many experts being replied upon simply end up being wrong. The tendency to make simple things difficult coupled with a plethora of daily news to be distracted by ensures obfuscation rather than clarity is the environment in which investors find themselves operating in. Of course, it doesn’t need to be this way. continue…

by Russell Muldoon Posted in Insightful Insights.

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The equity market can at times seem like a creature of fashion, if not completely bipolar. Particular investment attributes, like high rates of EPS growth or resistance to economic downturn, may attract a premium for a period of time only to fade down the track as other attributes rise to prominence in the minds of investors.

One of the more dramatic examples in recent times was the way the market’s views on gearing evolved through the GFC. Before mid-2007, companies with high gearing levels did not appear to be penalised by the market for the increased risk that comes with debt. Later, when debt became harder to refinance, gearing levels and maturity profiles became primary drivers of the market’s assessment of corporate merit. continue…

by Roger Montgomery Posted in Insightful Insights.

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It’s Good Food Month in Sydney so now is the time to come over to our office in Pyrmont and allow us take you to lunch at one of the fantastic restaurants in The Star complex. Uh, well, actually…no. We can’t. Why? Well unless it’s Friday – they’re closed. continue…

by Roger Montgomery Posted in Economics, Insightful Insights.

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The US Government debt ceiling, according to Treasury Secretary, Lew, will be exhausted by next Friday 18 October 2013.

We believe there are four alternatives that may play out over the next week as the political infighting reaches a crescendo continue…

by David Buckland Posted in Economics, Insightful Insights.

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