Value.able

Thank you for your support in 2012 and for all of your wonderful contributions to the knowledge bank.

I am delighted to finish the year again on a positive note.

I am pleased to report The Montgomery Fund’s initial investors (the fund was launched 17 August this year) have received a return of 15.2% after all fees in the four months to December 17, 2012. Over the same period, the ASX 300 Accumulation Index increased 6.8%. While the Fund has delivered 8.4% of out-performance, it is over a short time frame and our focus remains firmly on the long-term performance prospects for our businesses.

continue…

by Roger Montgomery Posted in Value.able.

• 3 Comments
• save this article
• POSTED IN Value.able

We are delighted by the trading update provided late Wednesday night by Silver Chef’s (ASX: SIV) – a business I mentioned just last week on the Sky Business Channel as a ‘Stock to Watch’. It is also one we own in the both The Montgomery Fund and The Montgomery [Private] Fund.

Management have forecast strong EPS growth of 12.7% to 18.3% for the first half. This would be an excellent achievement in what many have dubbed a tough retailing environment. Clearly not everyone in the retail sector deserve to be tarred with the same brush.

Our expectations are for the business to report earnings at the top-end of this range given the underlying momentum and demand for their product suite.

Silver Chef provides lease financing to hospitality businesses under the Silver Chef brand and more recently, for commercial businesses under its GoGetta brand and excellent risk management processes appear to be in place. Both brands enjoy a growing a reputation as industry-leading financing product providers. In particular Rent-Try-Buy and Rent-Grow-Own put less stress on a businesses cash flow in their start-up phases, a large reason for their take-up.

Management have indicated to us that they believe their potential market is equivalent to about $250m in revenue per annum. At the full year 2012, SIV reported $85m in revenue. With the potential to expand by a factor of 3x from here, we are long-term holders and anticipate many more positive future updates. Keep watching this space.

A word of caution. We have a large holding across our two well-diversified funds in Silver Chef and as shown, the share price has performed spectacularly well recently. Please therefore seek professional advice and understand the risks.

by Russell Muldoon Posted in Companies, Insightful Insights, Market Valuation, Value.able.

• 9 Comments
• save this article
• POSTED IN Companies, Insightful Insights, Market Valuation, Value.able

At this time of year, many of us are inclined to take stock of highlights and lowlights of the year gone by, and perhaps to consider what we might wish for the year ahead. Accordingly, we thought it might be interesting to look at the best and worst performing ASX stocks during the past 12 months, and see what sort of story they tell.

The list below sets out the top performers according to Bloomberg. We have limited the analysis to stocks with a market capitalization of at least $200m.
continue…

by Tim Kelley Posted in Insightful Insights, Market Valuation, Value.able.

• 7 Comments
• save this article
• POSTED IN Insightful Insights, Market Valuation, Value.able

With the wipeout in the Billabong (BBG) share price, from a high of $14.00 in mid-2007, the Company has now received its third takeover bid in a year.

President of the America’s Division since 1998, Paul Naude, together with a consortium of financiers, have “dropped in” a $1.10 per share bid, valuing BBG at $527m. This is a slight premium to the deeply discounted 6/7 rights issue at $1.02 per share, which delivered $225m in mid-2012 for debt reduction purposes.

The Board’s response will be interesting. Recently appointed CEO, Launa Inman, has well developed plans in getting Billabong back into the competition.

We have been told there are pockets of operational excellence at Billabong, but these need to be scaled-up across the organisation. The severe under-spend on IT is also being addressed.

by David Buckland Posted in Value.able.

• save this article
• POSTED IN Value.able

One of the issues attracting media and analyst commentary recently is the potential impact of American shale gas exports to the economics of Australia’s large LNG projects.

The theme of many of the comments is that there is no cause for alarm, at least for the time being. Some of the reasons advanced include: the reluctance of US policymakers to permit exports; the time taken to ramp up supply if the US does export; and the fact that LNG contracts tend to be linked to oil, rather than gas prices.

continue…

by Tim Kelley Posted in Energy / Resources, Insightful Insights, Value.able.

• 1 Comments
• save this article
• POSTED IN Energy / Resources, Insightful Insights, Value.able

We are again delighted to provide an update on the results for The Montgomery Fund.

Whilst it is still early days and you must understand that past results are not a reliable guide to future returns, we continue to be encouraged by the combined performance of The Montgomery Fund’s 33 constituents.

continue…

by Roger Montgomery Posted in Insightful Insights, Value.able.

• 1 Comments
• save this article
• POSTED IN Insightful Insights, Value.able

On 27 July 2012 I wrote “over the past fifty years, US housing starts have averaged 1.5m per annum. Currently starts are less than half the long-term average. Deutsche Bank is looking for US housing starts to jump to 1.0m by 2014 and to 1.4m by 2016 as follows”.

continue…

by David Buckland Posted in Insightful Insights, Value.able.

• save this article
• POSTED IN Insightful Insights, Value.able

Some believe Japan has just entered a full scale crisis and its not priced into markets. Their Balance of Trade is running at minus ten trillion Yen (US$100bln) and the resurgence of Chinese nationalism over the Senkaku islands could see trade deteriorate further and another 1 1/2 or 2% of GDP added to the deficit. GDP, by the way, is running at minus 3 1/2% to minus 4% in Japan (that forecast post-Tsunami-recovery in economic activity never eventuated dear economic experts!). Averting a full crisis may now be impossible and full current account negativity (deficit) is likely (It has already fallen from a US$210bln surplus in 2007 to US$120bln in 2011 and Credit Suisse were forecasting a seasonally adjusted surplus of just Y206bln in October.

continue…

by Roger Montgomery Posted in Value.able.

• 2 Comments
• save this article
• POSTED IN Value.able

Earlier this week The International Energy Agency released its World Energy Outlook. While total US oil and gas production is expected to increase 35 per cent from 17 million barrels of oil equivalent per day (mboe/d) in 2010 to 23 mboe/d in 2020, the transformation is explained by the expected 6 mboe/d surge in unconventional oil and gas production over this decade. Together with the widening of the Panama Canal by 2014, which will allow LNG Supertankers to travel to Asia from the Gulf of Mexico, the US could potentially turn into a cheap exporter of gas, in competition with Australia.
continue…

by David Buckland Posted in Energy / Resources, Insightful Insights, Value.able.

• save this article
• POSTED IN Energy / Resources, Insightful Insights, Value.able

In releasing the Government’s white paper, Prime Minister Gillard told the Lowy Institute the 21st Century would see Asia’s return to leadership. Asia’s rise was “not only unstoppable, it is gathering pace.” Treasurer Swan said Australia “must continue building on our strengths to take advantage of the opportunities that are unfolding in the Asian region”. Large productivity gains is a major focus of the white paper.

Of the twelve separate categories that make up the rankings in the “Global Competitiveness Report” from the World Economic Forum, “Labour Market Efficiency” remains Australia’s nemesis. If our political leaders are serious about productivity gains and workplace reform, then our poor record in areas like burden of government regulation, wastefulness of government spending, flexibility of wage determination and infrastructure bottlenecks need to be urgently addressed.

by David Buckland Posted in Insightful Insights, Value.able.

• save this article
• POSTED IN Insightful Insights, Value.able