Our Meetings Download September Meeting Audio here
"The 'yield curve' is one of the most accurate predictors of a future recession – and it's flashing warning signs" — http://theconversation.com/the-yield-curve-is-one-of-the-most-accurate-predictors-of-a-future-recession-and-its-flashing-warning-signs-119963 PIG MEETING MAY 2021 RE-VISIT PRICE–EARNINGS RATIOS Names – Price Earnings Ratios; P/E; PER; P-E Intended use – long used metric to judge the relative value of a listed company’s share compared to: Its historical value, The overall market place (e.g. ASX All ordinaries, ASX 200 etc.) Its market sector (industrials, finance etc.) Its competitors Calculation Methodology A simple calculation made by dividing the share’s “price” by its “earnings” (earnings per share or eps) at a particular time. Price – simple to obtain from ASX, AFR etc. Price is constantly changing during the trading day so it is better to use the opening ask price or the closing ask price. Earnings – This is a more complicated exercise and may have several alternative values. Quoted earnings may be on a before tax basis such as EBIT and EBITDA etc. These earnings are useful in project evaluation but investors need after tax results that have depreciation [...]
PIG MEETING MAY 2021 RETURN ON EQUITY Return on Equity is another metric that Investors should use in managing shares in their portfolio. Its components are as follows: “Return” as measured by cash profit from operations for a 12-month period (usually TTM). This information is provided in the annual accounts and is updated with periodic updates from the company. The final cash profit is deemed to be on a continuing business basis. “Equity” is the shareholders net worth and is the difference between Total Assets and Total Liabilities. Components are as follows: Share Capital – shares on issue at their issue price plus additional shares from re-investment plans and placements Reserves Retained earnings Example – Take ANZ Bank Share Capital $26531m Reserves $1501m Retained Earnings $33255m Total Shareholder Equity $61287m 2020 Cash Profit from Operations – $3,800m Return on Equity - 6.1% Shareholders must then judge whether this is a satisfactory return for the company and for the shareholders. This must be a key consideration for investors.
Three items that needed followup from last week’s meeting are as follows. At the March PIG meeting we will select companies for our new, regular and spec portfolios. Please bring your suggestions for selection. Have a look at the new ASX website as discussed at the meeting. A copy of the Macquarie paper (4 pages) on Hydrogen energy is attached. [pdf-embedder url="https://probus.pittwater.org.au/wp-content/uploads/2021/02/Scan-5.pdf" title="Scan 5"] [pdf-embedder url="https://probus.pittwater.org.au/wp-content/uploads/2021/02/Scan-4.pdf" title="Scan 4"] [pdf-embedder url="https://probus.pittwater.org.au/wp-content/uploads/2021/02/Scan-3.pdf" title="Scan 3"] [pdf-embedder url="https://probus.pittwater.org.au/wp-content/uploads/2021/02/Scan-2.pdf" title="Scan 2"]
Our November meeting covered a variety of investment issues and some topics needed some analysis that I promised to do. A main topic for follow-up was “fixed interest returns” and with an official cash rate of 0.1% and Term Deposits yielding little more the question was “where can we go for better returns?”. The opportunity mentioned was Bond ETFs and my research showed the following. The ASX has 17 Australian listed fixed interest ETFs ( there are also 8 global ETFs on the ASX) The largest is The Vanguard Fixed Interest Index ETF.$1.32 billion funds under mgmt. ASX:VAX Second is iShares Core Composite Bond ETF (ASX:IAF) with $1.11billion FUM. Third is Betashares Australian Bank Senior Floating Rate Bond ETF (ASX:QPON) with FUM $0.78 billion. Fees for VAF & IAF are 0.2% and QPON 0.22%. Running yields VAF 3.27%, IAF 3.28% and QPON 1.87% 12 month returns - VAF 7.07%, IAF 7.09%, QPON 3.48%. These high returns reflect the capital gain from interest rate drops. VAF is a Vanguard Fund, large US company with many products in the [...]
John Porter The current ASX rout has created many headaches and opportunities. I have used bank hybrids as a superior yield investment ahead of TD’s and the like. They have fallen below par and may offer buying opportunities with a decent yield, franking credits and guaranteed capital value – unless the banks really fall over. The list below would offer around 10% capital growth at maturity and maybe more, dependant on the market. Code Coupon Distribution Frequency Share Price Expected Maturity CBAPG 3.4% + BBSW Quarterly $ 90.00 2025 ANZPF 3.6% + BBSW Semi-Annually $ 93.50 2023 MQGPC 4.0% + BBSW Quarterly $ 88.00 2024 WBCPI 3.70% + BBSW Quarterly $ 90.80 2026 NABPF 4.0% + BBSW Quarterly $ 90.00 2026
A mass of good reading here from these 4 opinions , following our discussions yesterday. https://www.livewiremarkets.com/keywords/covid
https://theconversation.com/australia-is-the-runaway-global-leader-in-building-new-renewable-energy-123694 This is the link requested at our meeting------we never hear about it !! Peter PS I would note that even if investment goes down capacity can go up because costs are decreasing so much.
Opportunities in sight from the top of the LIC cycle