When investing in emerging companies, it’s the quality of the management team that matters above all else, says Jonathan Pearce, Portfolio Manager at the CVC Emerging Companies Fund. A great management team can turn an underperforming company around, but conversely, a bad management team can destroy a successful company. Show More
In a famous speech on the psychology of human misjudgement, Charlie Munger, Vice-Chairman of Berkshire Hathaway, said ‘I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes... Show More
Reading between the lines of company guidance can reveal a great deal, explains Simon Shields, Principal at Monash Investors. “Ardent Leisure’s Main Event business in the United States provides family entertainment centres with bowling, rock climbing, etc. Ardent bought this business when there were only five centres in Texas and... Show More
Assessing management is one of the more difficult tasks investors face. In recent years, research has identified three quantifiable factors that influence company performance: CEO remuneration, gender equality at a board/executive level, and family/founder ownership. Global index provider MSCI recently released a report stating that “companies with lower total summary... Show More
Paul Taylor, Portfolio Manager of the Fidelity Australian Equities Fund, says that he builds conviction in company management over time. Taylor listens intently to what management teams promise and then tracks them to establish if they are delivering on their plans. “Have they delivered on what they said they were... Show More
A life-cycle change company is one undergoing a positive, transformational change in their business model. Brandon Geisler, Portfolio Manager at Marsico Capital Management, says that they like to look for companies that have had a change of management, or a significant change in the nature of their operating business. When... Show More
It’s been a fairly quiet week on Australian markets, but with the US rates decision next week, could it be the calm before the storm? Only time will tell. For investors in iron ore stocks, it has been a volatile week, closing up a massive 18.6% on Monday, then dropping... Show More
Investors are constantly forced to assess the sustainability of company business models when looking at adding new stocks to their portfolios or critically evaluating the companies that they currently own. Indeed, an institutional investor may be exposed to the management teams from several hundred companies in any given year. Amongst... Show More
Bloomberg writes that “11 of the 15 non-financial U.S. companies that spent the most on buybacks last year base part of CEO pay on earnings per share or total shareholder return, or both. And these metrics get a boost when businesses return cash to investors. Linking compensation to buybacks and... Show More
One IPO that has impressed the OC Funds investment team is The Citadel Group (CGL), which listed on the ASX in November 2014. CGL is a company that specialises in enabling an organisation’s knowledge capital by integrating systems, people and processes to provide information on an anywhere-anytime basis. The company... Show More
Analysing company management: a tricky business. Company analysis is all about the numbers, right? Knowing how to calculate price-earnings ratios, analyse return on equity and work out last year's capital expenditure are certainly useful skills. But they're a smaller part of the story than you might think. Just as important... Show More