Back in November 2018, we wrote exclusively for LiveWire that we remained a ‘Viva Believer’ as the stock plumbed to the depths of $1.70 and below. We reasoned that there was still insufficient evidence to indicate whether the significant decline in the refining margin was cyclical or structural. ... Show More
Mineral Resources Limited’s 1st half was uncharacteristically subdued, with revenue, EBITDA, NPAT and dividend all down on the prior corresponding period, and in some cases by a significant margin. Being long-term followers of MIN, most of this was already factored into our models and was consistent with prior management guidance.... Show More
Viva Energy has had a horrid start to public life. It is getting harder to be a believer. But for the time being, we are hanging on – just! Show More
In our piece titled ‘Is this the Next Credit Corp?’ in May 2017, we made the case for why we considered PNC to be the standout amongst emerging companies on our radar. At the time the share price was trading at $2.13, but it has since increased by around... Show More
I have to GASP when I look at the current valuations of some of the new generation disruptors; we are very clearly in bubble territory. And as with all bubbles, we don’t know when it will end but we do know what happens when it does. Show More
S32 boasts the best balance sheet of any big-cap resource stock globally, and we continue to believe that the discount to its peer group is unwarranted. The shares traded noticeably weaker leading up to the reporting date, and while this is always a cautionary signal, we held the view that... Show More
Growth stock such as Wisetech, Altium, and Afterpay have seen sensational gains this week, underscoring the power of backing the right growth names. However this strategy has been working for a few years now, and it is harder for investors to come across new ideas today. While tech and healthcare... Show More
After a stellar two-year run that saw the ASX 300 Metals & Mining Index more than double, it has slipped by 10% in 3 months as trade tensions and China data hit sentiment. So, is this the beginning of the end for the current cycle, or it is just another... Show More
Results for some of the biggest stocks on the ASX have started to drop and a few have delivered above expectations. While the immediate pop on the day is like a sugar hit for investors, evidence shows this outperformance can extend for months to follow. In this episode of Buy Hold... Show More
Viva’s listing on the 13th of July was less than overwhelming, opening at $2.43 and closing the day at $2.40 - versus its issue price of $2.50. At $4.8bn, it was the largest IPO since Medibank, and the largest non-Government IPO in Australia’s history. And this would appear to be... Show More
To quote Matt Kidman, the Cashflow Statement is the P+L on truth serum! Follow the cash; record cash collections and record net operating cash from operations. Beyond that, i would also point you to the tier 1 auditor, increasing payment plan book and high level of recovery (over a greater mainframe) which indicate that the amortization rates are conservative.
GASP (Growth At a Stupid Price) to a tee.
Not disputing the quality of the earnings (one of the 10 key criteria we use internally); it is the price that you are paying for this earnings stream that is not sustainable.
A good question and one that highlights a lot of the misconceptions around this company. Firstly its worth noting that despite fluctuations in housing prices, actual total credit growth has only been negative once in the past 2 decades. But even if credit growth was to turn negative There are at least (4) ways that AFG can continue to grow profits: 1. Increasing the share of their higher margin white label and even higher margin securitisation products 2. Push into SME lending where they have a fraction of the market compared to mortgages 3. Adviser growth ; since listing this has increased from 2200 to 2900; the BRC has added even further pressure on lenders (banks) to ensure that they have the highest level of compliance; banks prefer to deal with large aggregators such as AFG as they have the best internal controls; more advisers will be driven towards larger aggregators and AFG is the largest 4. AFG is actively working on FINTECH and as the largest player they have the largest IT budget; early days but they are not asleep.
We too are avoiding infrastructure plays at this point in the cycle. In our view, the 2 main drivers of infrastructure stocks are 1) comparative yields and 2) cost of their (substantial level of) debt. Both of these are transitioning from tailwinds to headwinds.
Hello Johan, Yes AML has certainly cemented its position as the #1 cobalt related play. Exceptional drilling results in terms of grades, widths and consistency.
Clarity and wisdom.
Beware projects with eye-catching high grades but no width or tonnage. Most of our work on Canadian/North American cobalt plays has left us particularly unimpressed at intersections measuring 1-2 metres or less. This is not gold mining! AML pregnant with newsflow over next 3 months. CLA also moving up our list.
AML is towards the very top of our shortlist and we are meeting with the company today to progress our research. Keen to hear what investors like and why?
A nice take on this and Chart #3 in particular is worth highlighting - ie that over the longer term the volatility of equity income is lower than that of cash
Fully concur Nigel; the 4 big banks represent nearly 1/3 of the ASX100 and a staggering 46% of the ASX20. That means that every ETF based on the ASX100 is pumping nearly 30c in every dollar into 4 banks, and worse for an ETF based on the ASX20. Investors are nervous about investing in the banks at this stage of the cycle, yet they willingly invest in some ETFs that are simply replicating this exposure.
AFG can be added to this list? Market Cap $280m but was through $300m last week.
Great piece; very insightful and certainly worth taking notice of
All of the above, albeit the competitors will need to space their NIM expansion so as to avoid the perception of collusion etc.
Atlas does indeed face greater challenges than FMG, the most pronounced of which is the mode of transportation and associated costs. At this stage its a watching brief.
Yes correct. Whilst 'anchoring' can be a dangerous psychological weakness, the whole thesis of this piece is that if it is the oil price that has driven the weakness, then when the oil price rebounds the weakness will abate. This is predicated upon the central tenet that it is the oil price that has driven the weakness in the STO share price - not anything related to the company itself.