Hugh Dive

Hugh
Dive

Chief Investment Officer
Atlas Funds Management

Hugh is the Chief Investment Officer at Atlas Funds Management, a boutique fund manager focusing on delivering consistent income. We manage money based on the view that smaller certain returns today are worth more than larger uncertain future gains.

Expertise

Who wins in the Coles demerger?

Hugh Dive

On Friday morning, Wesfarmers announced that they are looking to demerge its Coles division to create a new ASX top 30 company, with leading positions in supermarkets and liquor. This move was very well received by the market, with Wesfarmers stock finishing up $2.60, or +6.3%, on Friday. Over the... Show More

coles demerger ASX:WES

Highs and Lows from Reporting Season

Hugh Dive

Last week saw the end of reporting season for 180 of the S&P/ASX200 companies and around 2,000 of the companies listed on the ASX. Over the past month, these companies revealed their profit results for the six months ending December 2017 and provided guidance as to how they expect their... Show More

ASX:BHP ASX:CBA ASX:CSL ASX:FMG ASX:QBE ASX:RIO ASX:TLS ASX:A2M

What should you sell in a volatile market?

Hugh Dive

The first two months of 2018 have been a wild ride for Australian shares, with big falls and then big recoveries. However, from looking at the headlines in the financial press most investors would be surprised to find out that the ASX 200 index actually finished February exactly where it... Show More

ASX:WOW ASX:SCP

Does QBE have the capital for their buy-back?

Hugh Dive

There is an esteemed group of companies on the ASX, such as CSL and Macquarie, where investors give management the benefit of the doubt. They trust that short-term issues can be overcome, and that future earnings guidance will not only be met, but may even be exceeded. Once upon a... Show More

ASX:QBE What the market missed

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Avoiding the portfolio ‘torpedoes’

Hugh Dive

I have had the “fortunate” experience of having observed both the GFC in 2007-08 and the Tech Wreck in 2001 from the vantage points of helping to manage conservative value-style funds. During these periods the portfolios were populated with companies paying dividends from stable recurring earnings such as TransCanada Pipelines... Show More

ASX:WES ASX:WOW ASX:SCP collection

Where in the mining cycle are we today?

Hugh Dive

Unlike industrial companies such as Amcor or Transurban, profits for mining companies are inherently cyclical. The earnings from mining companies are subject to booms and busts, largely outside the control of their management teams. This occurs as ultimately any company producing a commodity is a “price taker” not a “price... Show More

resources mining cycle ASX:BCI ASX:OZL ASX:RIO

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Dogs of the ASX …. Woof Woof!

Hugh Dive

In this week’s piece written from snowy Norway, we are going to look at the “dogs” of the ASX, focusing on large capitalisation Australian companies with falling share prices. Additionally, we are going to sift through the trash of 2017 to try to discern any fallen angels with potential to... Show More

Croquettes and Duck Confit for Westfield

Hugh Dive

This morning European property company Unibail-Rodamco announced that it had entered into an agreement to acquire Westfield (WFD) to create a global developer and operator of flagship shopping centres in the US, UK, the Netherland and France. This deal values WFD at A$33 billion, or at a price earning multiple... Show More

ASX:WFD ASX:SCG

Earnings Chicanery - Part Two on how companies "dress up" their results

Hugh Dive

Last week in part one of Atlas’ surprisingly popular series on financial statement trickery - Earnings Chicanery, we looked at the three financial statements and some measures a company can take to “dress up” their financial results. In part two we are going to build on this and take a... Show More

ASX:AMC ASX:DOW ASX:WOW ASX:SGH ASX:CIM

Earnings Chicanery - how companies "dress up" their results

Hugh Dive

In part one of a two-piece series on financial statement trickery, we are going to look at some measures a company can take to “dress up” their financial results to create an unclear picture of their financial health. Show More

ASX:HVN ASX:STO ASX:SGH

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Banks Report Card - Handing out the grades

Hugh Dive

Looking at the common themes emerging from the November reporting season, differentiate between the different banks and hand out our reporting season awards to the financial intermediaries that grease the wheels of Australian capitalism. Show More

High Priced Shares

Hugh Dive

Earlier this week Macquarie Bank’s share price almost touched $100 after releasing a solid set of profit results and there was speculation in the press that Macquarie Bank would join Cochlear, Blackmores and CSL in having a three-figure share price. In this week’s piece we are going to look at... Show More

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Taxing Times

Hugh Dive

Earlier this month Atlas sent out the tax statements for the Atlas High Income Property Fund, and for a relatively straightforward fund with a simple tax structure (income is passed through to investors untaxed), I was surprised at the number of potential categories of income. Show More

ASX:GPT

Breaking up and spinning off

Hugh Dive

In late September Commonwealth Bank announced both the sale of its life insurance business and that they were looking at floating the bank’s funds management business Colonial First State GAM on the share market. Based on the strong performance of recent spin-offs investors are likely to have a close look... Show More

ASX:BHP

Meeting with management: Our take

Hugh Dive

As reporting season finished last week, we have been very busy over the month meeting with management teams from various companies and property trusts. In this piece, we are looking to shed some light on the role that these meetings play in the investment process. Show More

What we have learned from this reporting season

Hugh Dive

During the months of February and August every year, the majority of Australian listed companies reveal their profit results and most provide guidance as to how they expect their businesses to perform in the upcoming year. Whilst we regularly meet with companies between reporting periods to gauge how their businesses... Show More

Bad and Fake Buy-backs

Hugh Dive

Earlier this month casino operator Crown Resorts announced a buy-back of up to 4.2% of its outstanding shares, which builds on the $500 million of stock the company had already bought back over the past 12 months. Despite this prima facie positive announcement Crown has fallen 9% in August as... Show More

ASX:BSL

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Give me my money back!

Hugh Dive

Two weeks ago, shopping centre owner Vicinity announced it would buy back up to 5% of its stock on market after it delivered its full-year results on August 15. This delivered investors an immediate 5% bounce in the trust’s share price, as the market anticipated over $500 million of Vicinity’s... Show More

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The biggest IPO of all Time

Hugh Dive

Since mid-June the oil price is up 15%, which has breathed fresh hope into beleaguered energy companies globally. The catalyst for the recovery in the oil price was the announcement that Saudi Arabia, OPEC’s largest producer, will limit oil exports coinicidentally as the Saudi's begin to start marketing what is... Show More

ASX:DLX ASX:SCP asx:cgc

Half Year Report Card for Australian Equities

Hugh Dive

The last six months have been stressful for Australian equity investors, despite the calm suggested by the ASX200 delivering a total return of +3.2% (capital appreciation plus dividends). December’s Santa Claus rally/Trump reflation tradewent a bit sour in January, similar to the feeling given by excessive consumption of four litre... Show More

ASX:BSL ASX:QBE ASX:SCG ASX:VCX

Great note Steve. Earlier this week we were looking to do a piece combing through BIG's Appendix 4Cs and to over the last year to try find some obvious signs for retail investors that they should have concerns, without much success. The quarterly cash flows appeared strong and the only sign we could find was the categorisation of operating cash flows as "Receipts from customers and other sources" - not really massive warning sign when these accounts were examined in mid 2017. Hugh

On One Big Lesson from the Big Un Debacle -

Kui, Great question, if you apply the $409M proceeds against debt the gearing only comes down to 36%, outside the target range of 25-35%. So QBE require organic capital generation to fund the buy-back. Whilst new management have made some positive moves, it is probably premature in February to assume that QBE will have a smooth year without any major cat events, especially prior to the Atlantic hurricane season (June to November). Hugh

On Does QBE have the capital for their buy-back? -

Mark, The beta's that you are getting from Commsec don't look right. What we use is a 5 year beta with observations taken weekly. From experience shorter periods (which Commsec may be using) tend to throw up some weird numbers. Email me on inquiries@atlasfunds.com.au if you want to discuss further Hugh

On High Priced Shares -

Jaiprakash, GMA's buy-back is clearly supporting the share price, though one may question the long term rationale behind reducing a mortgage insurers prescribed capital rating at a time when GMA's metrics are deteriorating sharply. Hugh

On Bad and Fake Buy-backs -

Thanks Dylan. PTM are yet to buy back a share since the buy-back was announced Sept 13th 2016

On Bad and Fake Buy-backs -