BioTech Deals Coming Soon

John Kimber

The annual Bio Technology conference in San Diego, which we attended, ended with many smiles and a surge in Biotech / medical share prices in the US and on the ASX following a Kaiser report indicating that there would be no price clampdown and that regulation will continue to be... Show More

Amazon's Opportunities

John Kimber

Amazon’s relentless focus on price, convenience and customers has created structural problems for the Amazon model. A raft of specialty retailers whose share prices are rising have recognized the opportunities created by the Amazon model. Show More

Amazon and WholeFoods

John Kimber

I cannot be the only observer who sees a peculiar facial likeness between Jeff Bezos the CEO of Amazon and Roger Corbett formerly of Woolworths. Show More

High yield ... and growing

John Kimber

The universe of US listed Business Development Companies (BDC's) are debt and equity investors in mid and small sized listed and unlisted ventures. They reside in a space occupied in Australia by the banks, unlisted private equity groups, funds and LICs. Recent names familiar in Australia are Carlyle Group, TPG... Show More

Airlines, injuries and oil

John Kimber

The passenger injured when dragged from a United Airlines flight last week is now preparing to sue for millions of dollars. His misfortune and subsequent outraged publicity has cost the US airline industry a lot more in terms of market capitalization. Show More

Incomparable Brambles

John Kimber

At Independent Research we look for a comparative advantage in similar securities in different markets.  The vast majority of the Brambles logistics business is outside Australia yet rarely is there an attempt to find peer group valuation outside Australia. US markets have been led by transports and industrials, a bullish... Show More

As an Australian US licensed investment analyst working in the USA the contrast with Australian tax laws is stark. US dividends are taxed at 20 per cent and distributions from retirement funds are mostly taxable. Franking encourages companies to pay more tax, not less abd explains the astronomically high payout ratios in Australia. I have been looked at in disbelief by US investors when I try to explain the obsession with fully franked dividends.. Australians need to remember the irony that franking was introduced to curb investment in property.

On Wilson: 25,000 reasons to stop changes to dividend imputation -

Catriona Sensata is a great story but why is there such a large short position in the stock? Looks like about 15 days to me

On Why investors should be going global -

And don't forget that it is not just commentary on social media and the fake news sites. The goods sold on many internet ecommerce retail sites, including the biggest, are if not fake, then duplicated and corrupted. Eventually consumers will choose between convenience and price and actually getting what they ordered.

On Digital platforms confront fake news -

I am pretty sure that the US fund manager thought I was lying when I explained that Australian fully franked dividends are essentially free of tax for Australians and free of withholding tax for foreign investors. Advocates of no franking would be right at home in the US where corporate taxable income drives buy backs, massive takeovers, huge salaries, and tax inversions in Ireland and other low tax jurisdictions. The only US investment that comes close to a fully franked dividend is a tax free municipal bond. Unlike Australian fund managers who receive the cash benefits of franking there is much less choice in the USA about how corporate profits are allocated. If you want unfranked, visit the USA.

On The curse of dividend imputation -

Volatility and political uncertainty today has concealed the Dow Transport Index which last week broke to the upside while the rest of the market was going down. The Transport Index is one of the most reliable leading indicators of the Dow Jones index. Unfortunately, political volatility will continue to rule until next Monday. The Transport Index needs to hold its gain for another week when the talking heads will run out of steam.

On Back in black -

FACEBOOK, AMAZON, NETFLIX, GOOGLE the four FANG stocks are all under pressure including NETFLIX. But they are not the only media stocks. Time Warner is trading at 20 per cent discount to the AT and T offer which will not be approved by a Clinton Administration unless Bill and the Democrats can find a way to make money out of the deal in which case there is $18 dollars a share arbitrage profit for $9 dollars downside to where Time Warner was trading before the offer. But what about deals elsewhere? T Mobile, Disney, Viacom, CBS, Comcast and Verizon ( not Fox with the Murdoch moat). The most possible deal is CBS and Viacom. Mario Gabelli owns both stocks. The struggling Viacom could be the acquirer and CBS gets a premium. Here is the scorecard for the last 12 months: Sprint up 40 pct T Mobile up 29 pct CBS up 20 pct At and T up 12 pct Netflix up 10 pct Verizon up 4 pct Comcast up 2 pct Disney down 18 pct Viacom down 21 pct Disney has great entertainment and needs the widespread distribution like Netflix. For value investors Disney satisfies all of Buffett's investment criteria except perhaps for EPS growth over five years which has been about 20 pct.

On Why Netflix is in trouble -

SUNDAY NIGHT IN THE US and Trump is closing the gap fast. Not surprising that the SPX is down nine days in a row.. Wall Street wants Clinton in the White House and the Republicans in the House, which tonight is looking less likely. What will happen to the markets? A daily losing streak of 9 days is very unusual and created a potential for a big bounce. The SPX reached its 200 day moving average on Friday which is the usual short term bottom. The Dow Transport Index, which leads the SPX, has been consolidating, not falling supporting the view that short term we are down as far as we can go. It is certain that the accusations of election fraud will continue , and the result will be contested, leading to legal challenges, and a wide range of trading... as much as 400 points on election day and maybe more over the week.

On US Election: On a Knife's Edge -

Amazon needs to solve its own unreported problems which are ignored by commentators who would prefer to create fear than magnify the probable derailing of the Amazon model. First, Amazon is focused on its customers not its suppliers. It is loaded with counterfeit products which Amazon will refund if discovered but will not do anything when a supplier complains about its products being ripped off. Just ask Birkenstock which was forced to remove its brand from Amazon as result of counterfeiting that Amazon will not control.Birkenstock is not the only supplier to have confronted the Amazon model and decided not to list on Amazon. Secondly, any supplier to Amazon will discover that they will lose control of their brand, their pricing and their good will. Amazon has complete control and is well known for capriciously removing or moving products in its website. I recommend anyone contemplating supplying to or buying from Amazon take a look at its complaints pages. Thirdly, the anonymous Amazon employee who is planning on decimating the Australian retail industry needs to first explain how much Amazon will charge suppliers for the privilege of listing in Amazon ( its about 40 per cent to Amazon) which is likely to be far more than the margin available at local retailers where you will Not be forced to compete with counterfeit products. Fourthly, Amazon competes actively with its own suppliers. They know exactly how much is being sold and have no hesitation in creating a product that copies an existing successful brand which is then produced for Amazon in China. Australian companies need to protect and promote Australian brands. Many have looked at using Amazon and in spite of its obvious size and presence have decided not to use Amazon. Australian suppliers are far better off promoting their own websites and logistics where they can retain their goodwill and avoid the costs uncertainty and complexity of Amazon. Good luck to once only Australian consumers who may or may not get what they want from Amazon. Suppliers need to become very sceptical.

On Amazon: “We are going to destroy the retail environment in Australia” -