UBS Asset Management

UBS Asset Management offers investment capabilities and investment styles across all major traditional and alternative asset classes. These include equity, fixed income, currency, hedge fund, real estate, infrastructure and private equity...

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The cynical power of earnings revisions

UBS Asset Management

The correlation between earnings revisions and share prices and the impact on investor behaviour is well-known. Clearly this suggests either sell-side analysts (rather than actual investors on the buy-side) drive share prices, or most buy-side investors don't form their own views and just follow brokers. Show More

ASX:COH ASX:CPU ASX:CSL ASX:REA ASX:RMD ASX:TWE

A focus on Australian small cap tech

UBS Asset Management

There are many sensible reasons for investing in Australian small caps. For example: Access to earlier-stage, higher-growth businesses; a broader range of sector opportunities to pick from; an ability to more easily back future trends. As always, the golden rule with small companies is to leave it to the professionals.... Show More

ASX:COH ASX:NXT ASX:RMD ASX:IPD ASX:ACX ASX:TNE ASX:AXP ASX:WTC

Quality vs value in Australian small caps

UBS Asset Management

Our small cap investment process involves building our own cash flow based valuation models and ranking stocks on a balance of growth, operating margin and capital required. We are very careful to account for the amount of cash required for fixed assets, working capital and intangibles. This process often keeps... Show More

ASX:APO ASX:OML

Value the market loves to hate

UBS Asset Management

Below we discuss 3 high conviction undervalued opportunities which we believe are fairly unique holdings particularly together in the same portfolio. All are cheap according to our conservative, sensitivity tested and mid-cycle anchored DCF. In addition, we believe fundamental industry economic risks are to the upside. Show More

ASX:AMP ASX:CTX ASX:LNK

Microcaps – Long term capital growth

UBS Asset Management

Most investors have some exposure to Australia's largest listed companies in their portfolio. The dividend yield on offer combined with exposure to well-known franchises provides a level of comfort and stability to the core component of a portfolio. However, our domestic stock market is concentrated around key industry segments –... Show More

Solar farms and batteries in South Australia

UBS Asset Management

We have had a long-term position in lithium miners Orocobre (ORE) and Pilbara (PLS). We have varied our investment in these companies over the last few years, as their rate of development and journey toward profitability has followed a wave-like pattern. However, we have always had one eye on the... Show More

tesla lithium ASX:ORE Elon Musk ASX:PLS batteries

Link Group ticking a lot of boxes

UBS Asset Management

Link Group has been listed for less than two years, but it is a business we have watched closely and have used a recent period of weakness to build a significant stake. It's also not well covered by brokers, with Factset showing 5 covering Link against 16 covering the similar... Show More

ASX:LNK

A high-quality, undervalued infrastructure network

UBS Asset Management

We continue to like Caltex Australia. Transport fuel earnings will continue to grow due to the continued shift to premium fuels (i.e. more European cars and the greater penetration of diesel passenger vehicles), growth in non-fuels convenience and a general increase in pricing to reflect a return on the store... Show More

ASX:CTX

Brambles (BXB) – What de-stocking?

UBS Asset Management

Early last week Brambles (BXB) downgraded its sales and EBIT guidance to +5% and +3% respectively for 1h17 (on a constant currency basis). This compares to previous full year FY17 guidance of 7–9% sales and 9–11% EBIT growth, affirmed as recently as November. Management has pinned the downgrade to issues... Show More

ASX:BXB Longform

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The merger of APN Outdoor and oOH Media...

UBS Asset Management

This week two of our significant investments announced a merger of equals and both announced earnings upgrades. It was a nice Xmas present for UBS Small caps. To recap. We are long term believers in the outdoor media space for a variety of reasons. I outline the key reasons below.... Show More

outdoor advertising Longform ASX:APO ASX:OML

Scoring goals not breaking legs

UBS Asset Management

After over two years OPEC has finally done the economically and indeed politically rational thing. Sentiment was supportive of a deal for most of the period since the initial Algerian meeting when such a cut was proposed. However, from last weekend the language from the main participants was reminiscent of... Show More

oil opec ASX:OSH ASX:STO ASX:WPL Longform ASX:AGL

Changing times for smallcaps

UBS Asset Management

The environment for equity investing has become a little more challenging in recent months in the wake of developments such as Brexit and the Trump presidency. Rising longer term interest rates (bond yields) and the risk of higher inflation in developed economies (fiscal policy returning to the fore?) has seen... Show More

Politics, policy and market developments

UBS Asset Management

Volatility in fixed income markets has subsided somewhat this week as the events and implications are being processed. We have more information but definitely not clarity around possible policy pathways and some people who may be executing president-elect Trump’s ‘vision’. We’ve collected some of our current thoughts on the situation. Show More

Longform Trump

Eight key factors of successful businesses (Part 4)

UBS Asset Management

In the final instalment of our series we examine the last two of the eight key factors we have found help distinguish those truly successful businesses from the also-rans. All eight key factors have been distilled from the many and varied learnings of the UBS small caps team over a... Show More

Why are Australian bank ratings under pressure?

UBS Asset Management

Earlier this week, Standard & Poor's (S&P) placed the entire Australian banking system on Negative Outlook. This implies that there is a one-in-three chance 25 Australian Banks' credit ratings may be downgraded within the next 2 years. S&P cited the continuing strength in property prices increases the risk of a... Show More

Eight key factors of successful businesses (Part 3)

UBS Asset Management

This is the third episode in our series examining the key factors distinguishing successful businesses. These are all learnings from our team’s many years of investing in Australian small companies. Factors #1–4, as discussed in parts 1 & 2, were: 1) Management are owners/founders or otherwise act as if they... Show More

Eight key factors of successful businesses (Part 2)

UBS Asset Management

Last week we began this series with a review of the first two of eight factors of successful businesses. 1) Management are owners/founders or otherwise act as if they are. 2) High returns on capital will often dispense with the need for high debt. Today we move on to Part... Show More

Eight key factors of successful businesses (Part 1)

UBS Asset Management

The UBS Australian Small Companies Fund has been successfully investing in great businesses for more than 12 years. Over that period of time the fund's investment process has consistently focused on "quality characteristics" when choosing what companies to invest in. This process has served our investors very well. Fundamental message:... Show More

ASX:SRX investment strategy Longform ASX:TNE ASX:ARB ASX:WTC

Aussie Dollar gets Trumped

UBS Asset Management

Commonwealth Bank's Foreign Exchange Strategy team released their outlook should Trump become President. They analysed his economic policies and deduced that Trump’s economic policies are very inflationary, given large income and company tax cuts, government spending and tariffs. They believe US bond yields and the US equity market will lift... Show More

aud Longform Trump WALE asx:clw asx:sgb

Microcap winners and losers

UBS Asset Management

The world remains in a low growth environment. Revenue growth is difficult to come by, the bulk of the heavy lifting on cost out appears to be behind us and levels of investment (which would drive medium-term growth) remain at benign levels. Against this backdrop, we have the continued emergence... Show More

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