Investing Education
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What is your best performing stock pick for the next 9 months?
Roger Montgomery
October 5, 2012
September was a challenging month for investors but Montgomery chalked up another outperformance in both The Montgomery [Private] Fund and The Montgomery Fund (see figure 1).
Of course in the short term the performance of share prices can be attributed to noise and randomness and so the bigger question is always; which businesses will be worth substantially more in the future?
What is your suggestion for the best performing stock for the next nine months to June 30, 2012?
Pick the best performing stock in the next nine months and gain fame and notoriety, kudos and credit.
Each month we’ll track the list and present the table until June 30, 2012.
All the best and stay tuned.
by Roger Montgomery Posted in Companies, Intrinsic Value, Investing Education.
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A good time to consider allocating to equities ?
Tim Kelley
September 27, 2012
At Montgomery Investment Management we don’t claim any special ability to predict where equity markets will go next, but we do know that buying equities when they are relatively inexpensive is a reliable path to better than average long-term returns. One simple way of gauging relative value is to compare the dividend yield for the market as a whole with its historical average (although we don’t advocate valuing individual companies in this way). It’s worth noting that the current dividend yield on the ASX All Ordinaries is around 4.65%, vs an average of 3.84% for the last 20 years (Source: IRESS).
by Tim Kelley Posted in Insightful Insights, Investing Education.
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If Only They Had Skaffold
Roger Montgomery
September 20, 2012
Notch up another win for investors who use Skaffold. Back in August last year I was asked by a viewer on Sky Business what I thought of MacMahon Holdings (ASX:MAH).You can watch the video here at 5 mins 20 seconds.
When asked the question, I looked at Skaffold.com and noting the very small change in intrinsic value over many years I said “This business is not going to deliver sustainable long-term outperformance”.
Today’s near-40% share price decline, announcement of a cost blowout, a downgrade to previous earnings guidance and the immediate resignation of the CEO Nick Bowen is a blow to those investors who own the shares of MacMahon and do not own Skaffold.
by Roger Montgomery Posted in Companies, Insightful Insights, Investing Education, Skaffold.
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MEDIA
How should you view a takeover offer on a company in your portfolio?
Roger Montgomery
September 19, 2012
Roger Montgomery discusses his insights into how to view takeover offers, and in particular he discusses the Sundance Resources (SDL) takeover bid with Ross Greenwood on Radio 2GB. Listen here.
This program was broadcast 19 September 2012.
by Roger Montgomery Posted in Insightful Insights, Investing Education, Radio.
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New ASX Investment Talk – Beating the Index
Roger Montgomery
September 14, 2012
Join Roger as he explains how the long-standing principles of value investing can be applied so that you too can identify A1 businesses for your portfolio and beat the index. Watch here.
by Roger Montgomery Posted in Insightful Insights, Intrinsic Value, Investing Education, Market Valuation.
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Big Apple?
Roger Montgomery
September 12, 2012
Did you know that the market capitalisation of Apple Inc. is now more than the entire equity markets of Spain, Portugal, Ireland and Greece combined? Its stunning. Surely Forrest Gump from Greenbow Alabama would be writing to Jenny with much enthusiasm. But what about its intrinsic value? Back in 2010 (http://rogermontgomery.com/is-apple-an-a1/) I wrote that Apple’s intrinsic value was higher than the share price at the time. The table below first published in July 2010 reveals the company’s pattern of rising intrinsic values. back then the price was indeed showing a small margin of safety.
A couple of blog readers have subsequently told me they purchased Apple shares and obviously they have done nicely. But what about today?
Only last year, when the share price hit $600 I wrote that I thought price had run ahead of intrinsic value (but not forecast intrinsic value) and the share price subsequently fell slightly. We also noted declining margins and market shares losses. But improving quarterly results and rising forecasts means revisions have resulted in IV estimates continuing their stellar rise so a revisit of our assumptions might be worth our time.
The graph below reveals that our ‘revised’ back-of-the-envelope intrinsic value estimate for Apple is forging ahead. If you are confident that Apple’s pipeline of products will usurp the competition, take back market share and fill Apple’s coffers towards 1000 billion dollars and that the iPhone 5 – expected to be revealed this week – will knock everyone’s socks off, then the massive rises in intrinsic value, might not seem so extreme.
Of course all intrinsic values are just estimates and while our haven’t done too badly for us – we’ve been spot on with BHP at $30 and done well on others – the reality is they can change dramatically as new information comes to hand.
So lets keep an eye on whether Apple impresses this week with its new release.
by Roger Montgomery Posted in Insightful Insights, Investing Education, Market Valuation, Value.able.
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MEDIA
Round 1: Value Investing vs the “new” paradigm – you be the judge……
Roger Montgomery
September 10, 2012
One of the constants of the last 10 years is market commentators saying that “this time is different” – we believe that the principles of of value investing never change, and Roger articulates the reasons why in this interview with Ticky Fullerton (and Marcus Padley!) on ABC1’s The Business, broadcast 7 September 2012. Watch here.
by Roger Montgomery Posted in Insightful Insights, Intrinsic Value, Investing Education, TV Appearances.
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Value.able digital edition now available on the iBookstore
Roger Montgomery
September 5, 2012
“Follow the steps outlined in Value.able, and I believe that over the long run, you cannot help but beat the market.”The stock market can be richly rewarding and the broad market indices relatively simple to beat over time but you must first discover the steps to identifying the very best stocks and the steps to buying them for less than they’re worth. Value.able invites you to not only discover and master the steps to successful value investing but to also hear and watch how Roger Montgomery applies the steps to identifying the best stocks and avoiding the worst with stunning audiovisual clips and screencasts from his own trading screen and using the software he invented.
Using this visually rich and captivating premium version of Montgomery’s best seller will entertain, engage, educate and enrich through all of the stock market’s trials and tribulations.
by Roger Montgomery Posted in Insightful Insights, Investing Education, Value.able.
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Ironic or Moronic?
Roger Montgomery
September 4, 2012
Last night the US markets rallied. There was no good news. In fact the reason for the rally was that the US economy was floundering. A floundering economy means more stimulus and stimulus is good because it should eventually lead to a better economy.
In other words an unhealthy patient is about to receive another sugar hit which might make them better. Buy!
Clearly the irony was not lost on traders of Fortescue shares this morning. FMG’s share price rallied several percent on the open in response to FMG’s announcement that it will significantly cut back on capex and production targets. Apparently, investors in a pure play iron ore company are pleased that the company will be less exposed to iron ore. Evidently the company is worth more if it does less. Taken to its extreme, it worth the most if it does nothing.
We believe that over the long term, equity markets work effectively as a weighing machine. In the short term, however, they can sometimes seem a little odd – and thats putting it mildly!
Stay tuned we are cooking something mind boggling about FMG and its peers…
by Roger Montgomery Posted in Energy / Resources, Insightful Insights, Investing Education.
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GWA – as close to a bond as you can get – pity about the share price
Roger Montgomery
September 3, 2012
Portfolio point: Reporting season is in full swing and there have been some excellent results. We always watch GWA because it’s a company that has the potential to regain its crown but the 2012 results didn’t inspire.
GWA is a leader in the design, manufacture, import and distribution of bathroom & kitchen products, door and access systems, and heating & cooling products. Brand names of these three core building fixtures and fittings divisions include Caroma, Dorf, Fower, Brivis, Dux, Gainsborough and Trilock. Analysis of virtually every financial measure over the past five years has seen GWA demonstrate bond like qualities.
by Roger Montgomery Posted in Companies, Intrinsic Value, Investing Education, Manufacturing.
