"We're focussed on valuing the business rather than just the stock. Underlying that is our estimate of private market value, which is what an informed, rational investor would pay for the entire company" ~John Rogers, investor, philanthropist and founder of Ariel Capital Management Show More
Spark Infrastructure (SKI) is a regulated utility company with a market capitalisation of $3.8 billion. Its current portfolio comprises interests in the following regulated assets: Show More
Whitehaven Coal (WHC) is an Australian coal production company that produces approximately 20 million tonnes per annum of high-energy thermal coal. This production compares to global coal consumption of approximately six billion tonnes. Thermal coal is used to run coal fired power stations. Show More
Australian bond yields declined rapidly over the December quarter, anticipating a major slowdown in the Australian and global economy. Real estate has a correlation to bonds, a function of the leases it has in place with its tenants and generally performs well in weak equity markets. Show More
The current 25-year credit cycle has seen Australian household leverage rates move to record levels versus all other developed markets. This degree of leverage is unprecedented in Australian history and is often a precursor to a major housing correction. Show More
To meet the stated requirements of electric vehicle manufacturers, lithium production must grow from current levels of 300,000 tonnes to two million tonnes by 2030. Our analysis, supported by interviews with independent industry specialists, concludes the lithium price needs to stay in the $US10,000 to $US12,000 per tonne price range... Show More
We have argued the case for an exposure to the resources sector for over 12 months. Despite the excellent performance of the sector over this period, we continue to remain confident as our multi-pronged investment case remains intact. Show More
We recently undertook a review of a company called Lynas Corporation (LYC). LYC is a miner and processor of rare earths. Rare earths are a critical component within electric vehicles. The growth in the electric vehicle industry will support demand growth for rare earths over the coming decade. We expect... Show More
While most of our positions are in companies in the traditional real estate and infrastructure sector, we are also able to make investments in real estate technology companies. One company that earned our interest was Updater (UPD), a company solving a real problem that we could relate to. Show More
We would like to offer up our perspective on the climate change debate. We do not think this is a political or ideological debate as is presented in the media and by politicians, but one about risk management. Show More
Since the rapid 20% correction witnessed from August to November 2016, the real estate and infrastructure sector has made a significant recovery. This recovery is difficult to reconcile given there has been no fundamental improvement in the earnings outlook for many of the securities that have rallied so strongly –... Show More
We highlight the recent share price weakness in toll road owner and operator Macquarie Atlas (MQA). We explain in simple terms why the share price has fallen 15% in several weeks for reasons not explainable by its fundamentals and highlight the opportunity to take advantage of the situation presented by... Show More
Significant household investment decisions depend on confidence, or ‘animal spirits’, which are clearly emerging in the USA. As per history, this confidence will manifest in households making high-value purchases – particularly new residential housing. While market analysts are expecting construction of new US housing to take four years to grow... Show More
The resources industry performed well over 2016 and it may appear to some that it is ‘too late’ to increase exposure to the sector. Our analysis suggests that the recovery remains in its early stage. In making our case we have written the following research piece providing eight justifications for... Show More
We have written a piece on the Australian housing market out of frustration from reading the views of so many market commentators that don’t seem to have studied the rich history of housing crises. Show More
Central banks want prices to rise consistently and with low volatility, normally in a range of 2 to 3% per annum. Prices growing at greater than 3% per annum apparently signal capacity constraints in an economy, so the central bank raises interest rates to crimp consumer spending and investment -... Show More
We have just completed a research paper on a renewable wind energy producer called Infigen (IFN). We would like to share our findings with you. Show More
Real estate investment trusts have performed exceptionally well this calendar year as investors rotate out of industries with earnings risk into perceived safety. Show More
Excellent piece Scott, thank you. It is a material mispricing and no doubt will correct once the market becomes more aware of the company and its excellent investment fundamentals.
I appreciate your response Ian, and a very fair point. Coal will eventually decline as a source of base power, but not for many years. Nuclear power would be a terrific transition. An honest question for you: How do you power your home and office, and how do you travel?
Thank you for the feedback. We have not done sufficient research on the graphite market to give you a considered opinion - apologies.
Terrific response Max and some great points raised. We will certainly review and revert.
Excellent question. You are correct that BLD has significant exposure to the Australian housing construction market, which we believe will experience a typical cyclical downturn. We believe that this downturn will be offset by BLD's exposure to the non residential construction market, which is experiencing strong growth. To answer your broader question, I am sure there are more pure exposures to the US housing construction market recovery, but we have confined out investment universe to those companies listed on the ASX.
An excellent note, thank you.
Thanks James, we are compiling a detailed report on the 'sector'. We look forward to sharing with you.
Thanks for the comments. Obviously I can only be general with such a short video. It was meant to be a word of caution, that's all. We have seen some very poor quality business models come to the market with very high valuations, not a good combination for investors.
Hi Patrick, different types of electricity generators run at different rates. Because mainstream renewable sources are variable (wind blowing, sun shining) - their actual output can range from 20-50% of installed capacity. Conversely, base load generators such as nuclear and thermal run close to 100%.