Growth Investing Is A Fool’s Game…

Growth Investing Is A Fool’s Game…

Investments, Shares
As a growth investor, the last month has been one of mixed feelings. The market overall has gained and some old warhorses have seen their stocks rise. Yet, the fact is, as we waded our way through reporting season many of the markets ‘best’ growth stocks have crumbled. Dominoes is down 20% from its highs. Isentia down near 40% from its highs. Aconex is down nearly 50% from its highs. Over the last month the list has grown. And grown. And grown. The commentary is near identical. The first half has been tougher than we thought to generate sales growth. More competition. More competitive pricing behaviour squeezing margins. Delayed purchasing decisions. All of that sounds like normal business me. It happens. Sales growth is never linear yet market analysts always…
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A Trump Win Provides A Timely Investment Lesson

A Trump Win Provides A Timely Investment Lesson

Business, Events, Investments, Shares
After an interesting past 24 hours, today we are reminded of one of the key rules to investing: knee-jerk reactions are never the best. As a Trump victory became increasingly apparent Asian markets collapsed with many traders rushing for the exits with fears of financial Armageddon. Then we wake up this morning hearing the news that rather than the US market dropping 5% as futures markets predicted, it instead, rose. A Brexit like response. Our philosophy is investing in businesses and not in trading sentiment, that is a fools game. The simple reality, if we’d followed the herd yesterday we would have lost money. So another reminder: Never follow the herd. But what a Trump presidency does is throw up potential new investment themes that perhaps we can take advantage…
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1 Share I’d Buy Today

1 Share I’d Buy Today

Shares
We often get asked what share we would buy. Well, we’re going to start a series. The idea is to identify opportunities that exist and to show you that investing isn’t about having a lot of money but rather a lot of patience and consistently working at it. Now while ‘hot tips’ can sometimes win, at Accession3 we are more interested in long term, sustainable wins. Markets move each and every day and more often than we’d like, it’s not the way that you want it. And while Warren Buffett is famous for saying that he’d just invest all his money in index funds, the reality is if you did that you would’ve made nothing. Just look at the ASX 200... Clearly, it’s lower now than it was in 2006…
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Kogan Versus The Share Market

Kogan Versus The Share Market

Investments, Shares
Online retailer Kogan (ASX code: KGN) listed on July 7 for $1.80. It is reported that the IPO was 4 times oversubscribed. That means one of two things: those who wanted a piece of the action wanted a lot of the shares on offer; or there were just lots of investors wanting a bit. The price since listing tells us it was the first. Fewer investors wanting big chunks and I’d wager a lot of those were expecting the “Kogan” brand to drive investor activity in the secondary market (ie; buying it the share market after it listed). So, 24 hours after listing why is it down 17%? The reality is in…. well, the reality. Kogan for all it’s growth and market penetration will turn a EBITDA of just $2.9m…
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A Rough Start To The Year… Seven Reasons Not To Get Too Concerned Though

A Rough Start To The Year… Seven Reasons Not To Get Too Concerned Though

Investments, Shares
• Financial markets have started the year on a rough note as last year’s worries about China and global growth in the face of US monetary tightening continue. • This could drive more short term weakness. However, in the absence of US/global recession, which still seems unlikely, it’s hard to see a GFC style bear market. • The key for investors is to recognise that shares offer a higher return potential after sharp falls, selling after big declines just locks in a loss and that dividend income from a well-diversified portfolio is little affected by share market volatility. Introduction 2016 has started much where 2015 left off with basically the same worries driving another bout of share market falls. Geopolitical concerns have played a role but the main issues are…
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Who Wins From A Weaker Australian Dollar?

Who Wins From A Weaker Australian Dollar?

Shares
Any investor has to be aware of the effects that changes in currency exchange rates could have on their investments. There is little doubt that interest rates around the world will start to rise. And once that starts to happen the value of the Australian dollar will fall. That will be good for those who hold international investments such as overseas-listed shares. Most investors do not access overseas shares directly but through a fund manager or through ASX-listed exchange traded funds that track overseas markets, including sharemarkets. Provided these funds are not hedged back to the Australian dollar to remove the exchange rate risk, a fall in the value of the Australian against the US dollar, for example, would add to the performance of US share prices. However, there would…
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Metcash, The Real Loser In Supermarket Wars

Metcash, The Real Loser In Supermarket Wars

Investments, Shares
Metcash, grocery wholesaler and owner of the IGA brand, released a trading update earlier this week. The grim reality is that this reiterated the 19% - 26% decline in earnings versus the same period last year. So, while the market and the media have been focussed on Woolworths as the great loser of the supermarket wars, its the forgotten 'independents' who are truly feeling the wrath of the low-margin, low-choice option provided by Aldi. Most analysts have spoken how Woolworth's claims of growth in sales & market share must be misleading yet in their commentary they rarely consider the small guys. The local convenience supermarket is built on high-margin sales when you need it now but the proliferation of supermarkets has slowly squeezed the convenience concept. For many suburban families Coles,…
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Life Healthcare Group

Life Healthcare Group

Investments, Shares
Life Healthcare Group (LHC) is an independent medical device distributor. Their business is focussed on nine key channels: Spine Orthopaedics Neurophysiology Surgical instruments Bariatric Capital equipment Ultrasound Biologics, and Vascular Life Healthcare has been on our investment radar since listing 12 months ago for numerous reasons. These include: Long term growth industry as both technology and an ageing population increase the demand for medical intervention Core exposure to spinal devices for which the growth in demand is more than double that of hip or knee procedures Capability to leverage new devices and services in to their existing channel. Despite some great investment metrics we haven’t ever invested in LHC – to our detriment it would appear. At the core of this LHC has only been listed for 18 months and…
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APA’s Year Of Growth

APA’s Year Of Growth

Investments, Shares
APA is ‘just’ an Infrastructure company. Right? Well you’d be mistaken for thinking it wasn’t after it has increase by 50% in the last 12 months. This rapid increase in share price, the result of acquisitions and new contracts, has seen APA’s dividend yield fall from mid 6% to the low 4%’s. Still better than the cash rate but an increasingly poor yield compared to some of its peers. The question hanging in the air is “where to from here?” In our view APA has been in a sweet spot. In a recent UBS research note they quite rightly point out that infrastructure companies will do well in falling interest rate environments but once interest rates and bond yields start to rise their valuation should start to fall. In simple…
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What’s Up With G8?

What’s Up With G8?

Shares
Earlier this week G8 Education (ASX: GEM) jumped 6%. The rapid rise in share price was in large due to the early release of the proposed changes to childcare. The changes revolve around the replace of current subsidies with a new “Child Care Subsidy”. The Government estimates that this will increase the involvement of more than 240,000 families in paid employment and therefore a much larger demand for Childcare. For families earning less than $65,000pa the subsidisation rate is increased 10% and they will be eligible for additional support through the Child Care Safety Net. The Safety Net provides up to 24 hours per fortnight of subsidisation regardless of whether they pass the activity test. For families earning from $65,000 to $170,000 they can expect to be save $30/week (on…
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