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Australian companies are facing a combined debt bill of around $100 billion. In this interview with David Taylor, Roger Montgomery shares his insights on the challenge faced by many companies who are attempting to refinance their debt, particularly in light of the recent turmoil on global financial markets. Listen to the Podcast

by Roger Montgomery's Team Posted in Media Room, Radio.

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Reports of the death of Australian manufacturing are greatly overstated. Roger Montgomery visits Australia’s unloved manufacturing sector and finds a group of thriving companies worth adding to your watchlist. Read Roger’s article at www.eurekareport.com.au.

by Roger Montgomery Posted in Media Room, On the Internet.

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Floating a business in volatile times takes a big leap of faith. Bega Cheese (ASX:BGA) floated last month; issuing 127 million shares at $2 each, this raised $35 million which brought the companies value to $250million. In this interview with Ross Greenwood, Roger Montgomery shares his Value.able expert opinion on the future of Bega Cheese. Listen to Podcast.

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Qantas posted an underlying before-tax profit of more than $550 million, which is up almost 50 per cent on last year. However, while half a billion dollars may sound like a lot of money, Qantas Chief executive Alan Joyce says the airline’s profit is well short of where it needs to be to justify the investment from its shareholders. Listen to the Podcast or Read the article.

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Following Woolworths latest results announcement, Roger Montgomery shares his insights on why Australia’s leading retailer failed to meet the markets expectations. Roger said ‘WOW is lowering their prices to drive profit growth, which is not sustainable or good for our country’. In this appearance on Switzer TV, Roger also highlights the key data points that investors should look for when analysing annual reports. Watch the interview.

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Roger Montgomery heads back to Matrix to find out what happened to the share price and, more importantly, where it’s going. Read Roger’s article at www.eurekareport.com.au.

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Qantas has reported a $250 million profit just a week after announcing plans to lay off 1,000 workers. Roger Montgomery says the airline does have to change drastically to cover the soaring costs of new aircraft. Read the transcript.

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In the height of reporting season, and following the announcement of the annual results from Matrix Composite & Engineering (ASX:MCE), Roger Montgomery shares his insights and Value.able expert opinion with Ross Greenwood. Listen to podcast.

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When to sell Rule #1 is: No junk policy. In the second part of Roger’s selling mini-series, he identifies Rule #2: Expensive.

While market declines alone don’t prove merit in selling shares, the broad declines do suggest a disciplined approach to shares significantly above an estimate of intrinsic value is necessary. For me, if the businesses are also of a lower quality in terms of our A1-C5 ratings, for example Asciano, Amcor, Westfield or Santos – there is an additional urgency to review.

Three weeks ago these C-rated businesses were all trading at prices significantly higher than an estimate of intrinsic value. Fast-forward to today (19 August 2011) and despite the falls, Safety Margins are are stubbornly high:

Asciano: -75 per cent
Amcor: -39 per cent
Westifeld: -46 per cent
Santos: -76 per cent

For us, it is neither here nor there whether you agree with our valuations and therefore Safety Margins. What is important for us and the portfolio we manage, is the combination of quality and value. In the absence of either trait, we would be unlikely to remain a holder of the shares.

It can be potentially permanent devastating holding shares in poor quality businesses at prices significantly above value.

Imagine you acquired shares in a business today for $2 and estimated those shares to be worth $4, rising to $4.10 the following year. Then suppose after six months the share price rises to $3.00.  What would you do?   Value.able Graduates, are expected to answer that question correctly.  Now imagine the price of those same shares has risen to $6 in the same time frame. Would your answer change?

It may be tempting to set up some hard and fast rules about when to sell. I am not as comfortable with this approach as I am with the idea that the appropriate premium above intrinsic value at which to sell depends on the future prospect for the company and therefore its intrinsic value for the future.

Your response may be that there is greater uncertainty in future valuations. If that is your view, then you should sell.

Whilst we should not try to predict the future, it is important to look through a conservative telescope. What will be the value of each company in your portfolio next year? And the following year? Understanding the business and using that understanding to help establish prospects for intrinsic value appreciation in the future is a vital component of the Value.able approach, we advocate here.

If you are yet to join the Graduate Class, order your copy of Value.able immediately at ‪http://www.rogermontgomery.com/. Once you have 1. read Value.able and 2. changed some part of the way you think about the stock market, my team and I will be delighted to officially welcome you as a Graduate of the Class of 2011 (and invite you to become a founding member of our soon-to-be-released next-generation A1 service).

Value.able TV #5 was recorded at Montgomery HQ on 19 August 2011.

Posted by Roger Montgomery’s A1 team, fund managers and creators of the next-generation A1 service for stock market investors, 19 August 2011.

Visit ‪‪http://www.rogermontgomery.com/ for Roger Montgomery’s step-by-step guide to valuing the best stocks and buying them for less than they’re worth.

by Roger Montgomery Posted in TV Appearances.

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Qantas is planning to drastically cut costs by forming two new airlines and cutting 1,000 jobs in Australia. Roger Montgomery reveals his thoughts on Qantas. Read the transcript.

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