Where to from here? (22/04/2014)
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.
david maynard
:
hi roger , i have been following with interest your very informative posts on g8 education and have noted with interest the substantial holder announcement posted by a well known funds manager on 23/4/14 followed the very next day by an announcement from the company of updated broker forecasts and dividend ?
Roger Montgomery
:
Our enthusiasm for this company has is diminishing. When any company substantially increases it’s dividend we ask a series of questions: Who benefits most from such a large dividend? Who owns the most stock? If you don’t want to be seen to be selling your shares what’s another way of taking out capital? To the last question, dividends are the answer and so the former questions become relevant.
These are the sorts of questions that should be asked every time related new information is provided by any company…
Michael Donohue
:
Can you please elaborate on that comment? Is it the business performance or management performance for which your enthusiasm is diminishing?
Roger Montgomery
:
Hi Michael, as our analysts have noted, $300 mln of acquisitions recently by a company that has been free cash flow negative for a few years suggests some questions need to be asked of management about motivation and funding.