Weekly wrap

Ugly day for most as resources and banks took another hit.  Our companies pretty solid all week with most closing at or above their Monday open.  Plenty of international grenades still being juggled and plenty of pins that could be pulled at any time.  Crazy Russian's still pummelling the Ukrainians whilst QE in Europe adds another load of debt to solve the debt crisis.  God only knows where things will end up in the middle east.  Just as long as we don't get any of those crack-ball's looking to bring their issues on shore - suspect it's only a matter of time sadly.  

Summary of where we stand - markets strong but nervous, plenty of naysayer's calling the end but also plenty of cash looking to invest on weakness.  Cash winning at this stage. 

Interesting times as always. 

Avagoodweegend.

AGI - time to spin up the jackpot?

Quite like these guys.  Belted since the FY results but not convinced the punishment was befitting the crime.  Have been plenty if sellers in the queue until recently and now the buyers look back in charge.  Expensing all R & D is a prudent accounting strategy and their price isnt demanding if you capitalise some of these costs (which many do).  Maybe a falling knife but we've been buying some around $3.30.  Pretty strong macro play and improving US economy. Tax, death and gambling being three of life's only certainties. 

ANI - dabbling today.

Buying a few ANI to park some cash in a better yielding home.  Heaps of buyers on the screen and almost no sellers - not a reason to buy but doesn't hurt if looking for a quick move higher.  Already a strong run since results but less than 10% up for the year.   Industrial property a good long term play on logistics.

Buy under $2.30 for yield.  

TOX - no longer toxic?

TOX seems to have stabilised after a brutal results based fall.  Time to get in?  Hope so.

I like TOX as longer term play - good macro-play on waste and heaps of barriers to entry.  NOt demanding multiples but no guidance at the FY result which makes holders nervy.  If it shakes out some weak holders, I think it'll be back up above $3.  

ACCC orange lights the Expedia t/o of Wotif - WTF???

Another ridiculous market rattling call from the Australian Comp and Crackpot Commission.  Rod Sims just doesn't get it sometimes. 

Wotif has been dying a slow death not making anywhere near enough to keep Expedia at bay and yet of course the ACCC thinks losing WTF will reduce competition.  Just lacks any understanding of the market where still more than 60% of travel is booked off line.  Of course Hotels will scream about the "possibility" of increased commissions - what else would they do? The fact is that WTF has been losing this war for years and will probably lose its corporate life if the strong and far more innovative Expedia doesn't take it out out of play.  Get out of the way ACCC and let the markets sort this out.  You guys are a waste of oxygen. 

Myer - nervousness ahead of results?

Some good retail trade data out this - particularly in relation to department store sales.  Should be helping Myer which is down more than 2% today.  Results out next Thursday and investors haven't had much visibility since sales numbers back in early May.  

If you believe the data, results should show an improving trend.  

Definite takeover possibility with MYR although not as attractive to PE as DJS given its lack of hard assets ie no property portfolio.  Solomon Lew always lurking in the shadows after his DJS pay-day.  If MYR looks OK on fundamentals then the takeover play really is a free option.  

Be an interesting result next week. 

We hold a few MYR but wouldn't be buying more until looking through the numbers. 

Infomedia - No Servicing Required

Another terrific result from IFM  Has all the factors we're looking for:  

  • Sticky customer base
  • Growing and recurring revenue
  • Constant Innovation 
  • Cost control 
  • Quality management
  • Significant barriers to entry.  

UCP has held IFM since they were 23c but they are starting to look fully priced.  

Plenty of larger holders scrambling to the exits post this recent run.  I'd be holding them for now but with a market cap at 22x forward NPAT, the earnings yield has drifted under 5%.  These guys almost always under-promise and over-deliver and with vehicle servicing becoming ever more complex, they will continue to attract customers if they continue to execute.  Macro environment for these guys is strong and they are playing in an industry fit for the times. 

HOLD for now but I'd be lightening over $1.20.