Kicking off Reporting Season (11/02/2014)
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.
Roger Montgomery
:
BJ Writes: What am i missing on Primary Health Care, as i can’t see how its close to IV?
Is there something specific i am missing on they way they report and some other adjustment i should be looking at? Profit of $152m in FY13 on equity of $2.7bn is Roe of only 6%?
Are you using a lower required rate?
Simon Stewart
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Hi Roger,
I think we are probably seeing a lot of the good quality companies exceeding their intrinsic value so the pace at which the share price continues to rise is limited due to the educated investor being aware of this. Perhaps you have educated us too well and now the speculators are driving the price of the lower quality companies as they expect the sector as a whole to be on the re-bound. I notice for example Silver Lake Resources announced record gold production but at what cost? Producing gold at one of the mines at a cost of $A2,000 an ounce when the price is $A1400 an ounce doesn’t make any sense to me. Still maybe the average investor just reads the headlines.
Roger Montgomery
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Inevitably the price follows the value!
Andrew Legget
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Looking forward to seeing this video when i get the chance but thought i would throw something out there. I know you guys have discussed how yield chasers have pushed up a lot of companies stock prices.
CBA looks really expensive. I did some quick calcs using the approach in Rogers book and the highest i could stretch it was up to $61.55 based on the last 10 years worth of results. My very generous range (ignoring 1% probability events and allowing for everythign else) has fair value for CBA between $44.18-$61.55 for what its worth.
The current price of $75.81 would imply ROE above 20% which is higher than it has ever generated over the last 10 years.
Although i do not think the market is in a bubble, i think there are some areas which are approaching possible trouble areas. It is just a case of what the catalyst will be. I think those chasing yield and ignoring everything else are playing a dangerous game.
Roger Montgomery
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Fundamentally sensible Andrew
Vish Marken
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Hi Roger,
Given that you mentioned MMS as one of the companies towards the end, what do you think is going to be the likely impact of Ford, Holden and now Toyota exiting car manufacturing in Australia on the future performance and earnings of MMS?
thanks
Roger Montgomery
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MMS provides a service used largely by nurses, teachers etc. There’s always a risk of legislative change but it would in our estimation be small
zoran arnautovic
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VEDA
C’mon Roger, sort this thing out, ha,ha
Cheers
Peter Harris
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Hi Roger
You mentioned Challenger. I can find three possible Challengers in Skaffold – non of which look impressive. Can you please clarify?
Many thanks
Peter
ric.braga.9
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Hi Roger….My GF had her CCard stolen and ended up registering with Veda for $60 a year I think,,,,,We got a loan for a house together and Veda didn’t contact her to notify. This was one of the critical reasons she uses their service.
Not exactly sure all of what Veda do but they’re not doing this part properly that’s for certain.
Anyway, thanks Roger.