A handful of stocks are commanding multiples of more than 40, 70 and 100 times forecast earnings, the surest sign that the ASX's technology sector is experiencing a melt-up and possibly even bubble-like tendencies just weeks ahead of the annual earnings season.
Simon Conn, IML Senior Portfolio Manager, comments "It's all about momentum and not so much about the earnings."
When looking at all stocks over a period of time, even the best quality ones, it becomes clear that companies often fall into or out of favour with investors based on short-term factors. These short-term factors can greatly impact the perception and the PE rating of the company’s stock price and will often impact investors’ perception as to what constitutes a company with bright prospects (a ‘growth’ stock) as opposed to a company with poorer prospects.
The past 18 months has been a challenging and at times a frustrating environment for value investors. At IML we pride ourselves on our strict adherence to the IML investment mantra which has defined our approach to investing for the past 20 years – through all market cycles.
This can be neatly described as an investment style of Value with a strong focus on Quality. However, over the past 18 months this proven approach has significantly lagged the styles of Growth and Momentum based investing.
Access the recording to our recent webinar with IML's Senior Portfolio Manager and Head of Research, Hugh Giddy and Portfolio Manager, Daniel Moore. Hugh and Daniel will cover the biggest changes influencing the Australian sharemarket today and provide a timely reminder of the things that remain the same for investors, yet are often forgotten amongst the emphasis on the impact of change.
Anton Tagliaferro discusses the key reasons why dividends have always been and will continue to be an important component for investors to consider.
The Australian
12:00AM May 17, 2018
Recent headlines on dividends have been focused on the Labor Party's proposed removal of some of the more favourable tax treatments. While franking credits on dividends certainly enhance the attraction of dividends, we believe there are many other important reasons why dividends will always remain an important element to consider when constructing an equity portfolio.
Anton Tagliaferro comments on the Queensland Competition Authority's wildly disputed draft decision on what Aurizon can charge customers of its rail network:
"As shareholders in Aurizon on behalf of clients, we are of the strong opinion that the Aurizon Network UT5 Draft Decision, while grounded in theory, is ultimately inconsistent with the commercial realities of operating a complex coal network," the Investors Mutual submission opened."
