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Double edition white paper: ARB & Speciality Fashion Group

Double edition white paper: ARB & Speciality Fashion Group

In this month’s subscriber-only white paper, Roger analyses two companies: ARB Corporation and Speciality Fashion Group. What are the prospects for these two businesses?

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Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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12 Comments

  1. Hey Roger , why the companies in Australia have been into acquisitions lately ? Why is the growth so inorganic? Does this mean most of the companies are already residing in the saturated industry ?

  2. Off topic but noticed query on WPL… I get around $50 in an ex-growth scenario, interested to know your own val.

  3. ARB is my biggest holding. I agree with your assessment of ARB’s competitive advantage. Management is a big one, they don’t issue shares, they pay themselves conservatively, this is a Buffett type company with the way they are run in my opinion. I like their steady-as-she-goes approach.
    They haven’t expanded fast or slow. They are handling what they can and doing well. Moving forward every year, new warehouse in Thailand, new stores overseas etc.
    The Brown family own a lot of shares so there is little risk of any short term directors getting on the board. Also, too small for super funds to hold.
    Their brand name is very strong.
    R&D is something they never compromise on. Any new model, they have parts for it.
    Anyone with deep pockets can replicate ARB’s business. It may take years and getting the right people would be a challenge but it can be replicated.
    I think one thing that could be defined as a unique competitive advantage (but not really) is that, because it is a very small market, there isn’t really anyone with deep pockets that would take on ARB for a pretty small market segment. There probably is room for 2 big players but I think ARB would be pretty hard to shake in this small sector.

  4. Roger
    The white paper was great reading in fact I have bought your book and reading through the principles of value investing……thank you for your insights on BHP.
    I’m doing an assessment of Woodside Petroleum it is a share that has been between 30- 40 dollars for th e past 5 years. It has gown it’s assets from 10B in 2008 to 24B in 2013, continued to maintain its liabilities at around 8B and reduced debt. Does it meet your intrinsic value criteria?

    Prabha

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