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Expansion success hinges on global economies

Two analysts, presented with the same set of facts can, and often do, arrive at entirely different conclusions.  Indeed, every day and every time a stock trades, the buyer and seller are arriving at vastly different conclusions.

On the one hand a renewed interest in cyclical stocks does not make it difficult to imagine Servcorp shares racing higher – the company having boldly positioned itself for an economic upturn by doubling its floor portfolio and expanding in the United States in anticipation of a strengthening global economy.

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by Roger Montgomery Posted in Companies, Whitepapers.

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As you know at Montgomery Investment Management we have held a very cautious view on iron ore for almost a year, noting the apparent over-investment in supply and reliance on Chinese demand. However, we have a more positive outlook in other areas.

Energy is one area where we feel that the supply and demand outlook is more favourable, and we have turned our minds to which companies might benefit from this.

As we have written about elsewhere, one such company is Miclyn Express Offshore Limited (ASX:MIO).

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by Roger Montgomery Posted in Energy / Resources, Whitepapers.

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Returns from lending people money or from giving them what they want before they can afford it, are enormous. Here we discuss two companies profiting from the impatience of others.

This white paper is exclusively for Roger Montgomery.com subscribers.

by Roger Montgomery Posted in Whitepapers.

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Here’s what you are missing out on.  This is sample of the feature reports our members receive each and every month.

Become a member and don’t miss the next report exclusively for members. Join Now – Its Free!

Download SAMPLE REPORT – ‘Don’t Reject The The Reject Shop (TRS)’ HERE

by Roger Montgomery Posted in Montgomery News and Updates, Whitepapers.

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What is ailing the stock market and why have investors deserted it in droves?

Founder of Montgomery Investment Management and author of value-investing bestseller Value.able reveals the steps he is taking to ensure investor returns and investors return.

This white paper is exclusively for Roger Montgomery.com subscribers.

by Roger Montgomery Posted in Investing Education, Whitepapers.

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Some smaller manufacturers have good momentum in a tough market.

The media often portrays Australia’s manufacturing sector as on its knees. The high dollar, rising wage and input costs, and soft demand are clearly taking a toll. But to suggest all manufacturers are struggling is wrong. Some smaller listed manufacturers are performing well.

Transport parts manufacturer Maxitrans Industries almost tripled net profit to $12.3 million in FY2012 and its shares have rallied from 40 cents in January to 79 cents. Another parts manufacturer, Supply Network, said in July it expected full-year earnings before interest and tax (EBIT) to rise $2.2 million to $6 million. Its shares have almost doubled this year to $1.26.

Engineering solutions manufacturer, Legend Corporation, also has good momentum. In August it reported full-year net profit after tax (NPAT) grew 18.2 per cent to $9.4 million, for its fourth consecutive year of profit growth. Legend’s total shareholder return over one year (including dividends) is 8.1 per cent. Over three years, the average annual total shareholder return is 49 per cent.

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by Roger Montgomery Posted in Manufacturing, Whitepapers.

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High return on equity, high yield – and high debt – makes Dicker a challenging investment.

Australian technology floats have been rare in the past three years. Most initial public offerings (IPOs) have been for exploration companies and the majority are trading below their issue price. In a risk-averse market, investors have shunned information, biotechnology and clean technology floats.

The wholesale technology hardware distributor, Dicker Data, has had little fanfare since listing on ASX in January 2011, despite stellar earnings growth, a high return on equity and a share price that has more than doubled since listing, making it among the best-performed small IPOs.

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by Tony Featherstone Posted in Technology & Telecommunications, Whitepapers.

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Like many Australian industries, the share registry sector is dominated by two giants: Computershare and Link Market Services. The much smaller Advanced Share Registry (ASR) barely rates by comparison, but is well positioned for faster growth when the sharemarket recovers.

A weak sharemarket is a big headwind for share registries, which update and manage company share registers. Fewer initial public offerings (IPOs) and corporate actions, such as rights issues and meeting notices, means less demand for additional share registry services.

ASR’s challenge is compounded by its exposure to smaller resource companies. The Perth-based share registry might struggle if more listed explorers go into their shell, to preserve cash.
Share registries can be great businesses. Computershare’s return on equity has averaged 28.1 per cent over its last four financial years and it is capitalised at $4.2 billion, Skaffold data shows. However, its average annual total shareholder return over five years is negative 3.2 per cent.

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by Tony Featherstone Posted in Companies, Whitepapers.

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When pop singer Madonna wrote Material Girl in 1985 I suspect she wasn’t thinking about BHP or FMG. But nearly thirty years later that is exactly the material world that will determine whether you retire materially well-off or not. BHP’s share price has fallen 30 per cent in the last twelve months so it’s easy to say the shares are now cheap but does BHP represent value or is it a value trap? What I can tell you is that consulting geologists who spend their days planning exploration programs for large miners are in no doubt about whether we have seen the peak of the resources boom.

Six months ago these experts were being told by their major-miner clients that money is not an issue, that the issues were resourcing – labour and drill rigs. “Just make it happen” the geologists were being told “there’s $80 billion of planned infrastructure spending in the pipeline”.

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by Roger Montgomery Posted in Whitepapers.

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