Whitepapers

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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