Wry & Dry #36 FY-24 From the Murray to… “That would be the Euphrates”. Rats.

In the most flagrant breach of responsible government since that which caused then PM Whitlam to give Federal Treasurer Jim Cairns the DCM in 1975, Victorian Premier Allen has not given state Treasurer Tim Pallas the DCM.

And in abject bovine indifference, the financial media chewed the cud spewed out by the government’s PR machine and effectively said “Tut, tut. Must do better.”

Even the state opposition leader (err, bowler’s name?) couldn’t bring himself to ask for the head of Pallas to be impaled on a spike at the city gates.

Is gold the new haven? The mystery behind the price surge

Pile of gold

This week’s Investment Matters will shed light on the surge in the price of gold and gold stocks in the past few months. 

We hold gold stocks in our clients’ sub-portfolios for several reasons. It is therefore useful to understand why increases in the gold price warrant special attention. 

The task for First Samuel is to profit from such price increases. 

In discussing this, I have split this week’s Investment Matters into two lengthy sections. I urge you not to skip straight to the second section (on how we profit from gold prices increases).

Optimistic optimism: strong returns to both Australian and global equities

This week’s Investment Matters will focus on different asset classes, their relative performance, and our broad thoughts on the implications of tactical asset allocation decisions. 

When we survey benchmark performance, we see that Australian and Global equities portfolios have delivered returns well above expected long-term returns for those asset classes this financial year. 

Revisiting takeovers

we’ve maintained higher weights in cash holdings within property sub-portfolios with an expectation that a significant rises in interest rates would necessitate an increase in cap rates (implied returns on property values), a resultant reduction in property book valuations and trigger a resultant slew of equity capital raises at discounted share prices in order to restore balance sheets to within bank funding covenants.

While the dull shine of copper comes in focus, we shed little light on BHP. Similarly, our focus this week on financial services dives deeper than the four major banks.

Profit Reporting Season – Stockland, Mirvac, Garda and Lendlease

laptop with the words property on it with small colourful illustrated houses

we’ve maintained higher weights in cash holdings within property sub-portfolios with an expectation that a significant rises in interest rates would necessitate an increase in cap rates (implied returns on property values), a resultant reduction in property book valuations and trigger a resultant slew of equity capital raises at discounted share prices in order to restore balance sheets to within bank funding covenants.

While the dull shine of copper comes in focus, we shed little light on BHP. Similarly, our focus this week on financial services dives deeper than the four major banks.

Profit Reporting Season – Sandfire, Perpetual and Judo Bank

This week’s Investment Matters will continue to focus on the recent reporting season.

While the dull shine of copper comes in focus, we shed little light on BHP. Similarly, our focus this week on financial services dives deeper than the four major banks.

Profit Reporting Season – Cleanaway, Emeco, ParagonCare and Worley

This week’s Investment Matters will concentrate on key company results as the reporting season winds down. On balance, market strategists have noted that earnings revisions have been neutral across the board, which is better than historical outcomes of net negative earnings revisions by optimistic investment banking equity analysts. 

Profit Reporting Season – Ventia, Johns Lyng, Earlypay and Nanosonics

Read key company results as the reporting season winds down. On balance, market strategists have noted that earnings revisions have been neutral across the board, which is a better than historic outcomes of net negative earnings revisions by optimistic investment banking equity analysts.

Early profit reporting season and news update

In last week’s Investment Matters we concentrated on the confession season, the period in which companies make early announcements to the market surrounding material changes to upcoming earnings.

This week’s Investment Matters will also concentrate on news flow and early reporting season results.

Confessions of a corporate earnings season

Most ASX-listed companies in Australia have a June fiscal/financial year-end. Accordingly, those with June and December balance days will tend to present their (half-year/annual) financial results to the market in each of the months of February and August.

Perpetual – finding a way to unlock value

In the past year, we have often commented that we’ll exhibit due patience as part of our investment approach. This is required as we often seek to invest in businesses that are significantly unloved and misunderstood and where assets may, therefore be mispriced.

Premier Investments – A deep dive into a new opportunity

In recent weeks, clients will have seen the addition of Premier Investments to their Australian equity sub-portfolios. Famously partly owned and operated (whether formally or informally) by Solomon Lew, Premier Investments is amongst the most successful discretionary retailers in Australian history.

Steadfast in its approach

© 2024 First Samuel Limited The Markets This week: ASX v Wall Street FYTD: ASX v Wall Street Steadfast Group Limited is an Australian insurance broking network that provides insurance broking services to businesses and individuals across Australia and New Zealand. The company was founded in 1991 and has become one of Australia’s largest insurance […]

Growing – in two very different ways

In recent weeks, we heard the mildly alarming statistics that the ASX had fallen to a low in October 2023 of 6703.2, lower than the levels seen in the broad market index at the close of October in 2007 (6770).

Inghams: laying golden eggs

Inghams is the dominant supplier of chicken products in Australia. It is also amongst the largest positions in client portfolios. In the past week, it delivered an update on progress within the business across the first half of the fiscal year.

Understanding the rise in mergers and acquisitions

Two people shaking hands with a light blue background

When the share-market does not see value or investment merit in a particular stock the stock’s share price will recede. This could be because the company’s earnings (i.e. profit) outlook is poor (e.g. Bega Cheese Ltd) or perhaps the industry in the which the company operates is struggling (e.g. ARN Media Limited).
But often someone or a company will see value where the share-market does not. The logical outcome of this is one of the more interesting aspects of investment: the merger or the acquisition. Or, in jargon: M&A.

Wry & Dry #43: The Sky Is Falling…

Australia has arguably the world’s most diverse and abundant supply of energy, with the exception of Tsar Vlad’s empire. But somehow, this abundance has gone pear-shaped this week