Investor Insights

At an investor day in Sydney last month, newly-appointed CEO of Challenger (ASX: CGF), Richard Howes, announced something that any new CEO would rather not. Howes announced that he was abandoning the 18 per cent pre-tax Group normalised return-on-equity (ROE) target that had been held by the company for the last 15 years.

Latest reports from the two leading aircraft producers suggest Airbus is on track to stroll past Boeing this year and become the largest plane maker for the first time in 8 years. The ongoing 737 MAX crisis has lasted four months, already longer than Boeing or any of its stakeholders anticipated.

One mining company that does not get frequently mentioned despite being in the ASX 100 Index is Iluka Resources (ASX:ILU).  The company owns a significant asset known as the “MAC royalty” receiving an extremely lucrative royalty rate on  iron ore revenue generated from BHP’s Mining Area C mine.

There’s an increasing frequency of articles I have read suggesting that low rates are now a permanent feature of markets, as is the likelihood of central banks rescuing investors from themselves through the perpetual deployment of unconventional monetary policy tools.

What do A2 Milk and Nine Entertainment have in common? They represent two key themes that Australian investors should focus on to potentially enhance their long-term returns. Exposures to companies growing overseas makes sense.

Ahead of the July 4 holiday here in the US the local stock market has closed at a record high. But shares may not be any more expensive on average than they have been over the past decade.

Anyone following the financial media will probably know that the going has been tough for active managers recently, with only a smallish minority managing to outperform the market.

As fiscal 2019 has drawn to a close, let’s take a look at the year that was. In sporting parlance, it was definitely “a game of two halves. ” Virtually all major indexes declined in the December 2018 half-year, however this proved temporary and the recovery in the June 2019 half-year was quite extraordinary.

In the lead up to the RBA’s first interest rate cut in several years, governor Philip Lowe noted the negative ‘wealth effect’ from falling house prices would be felt most acutely by those retailing motor vehicles and household furnishings.

Over the last few months, eight times as many ASX-listed companies have downgraded as upgraded. That’s an alarming figure, and reveals a serious decline in business conditions. The mission for all investors is to try to avoid companies issuing further downgrades.

Last month, there was probably no one more surprised than Australian Prime Minister, Scott Morrison – or “ScoMo” – to which he is commonly referred. ScoMo had just won a decisive victory in Australia’s general election against an opponent that was the short-odds favourite in the betting markets. Exclusive Content This is exclusive content to subscribers on rogermontgomery. com.

One of the more significant de-rating stories over the past 12 months has been that of fruit and vegetable grower Costa Group (ASX:CGC), which has had to issue two earnings downgrades over this period due to a variety of weaker pricing and agricultural-related issues. Exclusive Content This is exclusive content to subscribers on rogermontgomery. com.