During this part of the cycle, M&A typically accelerates

Thomas Schoenmaker

Wentworth Securities

During this part of the cycle, M&A typically accelerates. We look at what is happening, and why, and ideas to position for the thematic. Why is M&A accelerating? • Debt is very cheap (unless you're an iron ore produce as Fortescue found out last week) • Company balance sheets are strong. • Companies are struggling for organic growth, so they are buying back their own shares at record pace, which sends a poor management signal in that they cannot find ways to grow.The cost cutting has already been done. Good acquisitions should be a better alternative. • Company PE's are higher than historic norms, so a good time to use the value of your equity. full note here (VIEW LINK)

Thomas Schoenmaker
Director and Head of Wealth Management
Wentworth Securities

Tom is a Founder and Head of Wealth Management. For the past 10 years, he has been running the Wentworth Model Portfolios, focusing on macroeconomics and tactical equity positioning. These portfolios were initially created as a solution for "core...

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