Investor Insights

September 12, 2022

Aura High Yield SME Fund: Letter to investors 09 September 2022

By Brett Craig

The RBA has raised rates for the fifth month in a row bringing the cash rate to 2. 35% with the expectation of reining in inflation by the end of the year. Largely in line with market expectations, the RBA raised the cash rate by 50 basis points. This is the highest cash rate since early 2015.
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September 12, 2022

Why we are underweight consumer discretionary companies?

By Roger Montgomery

There are no doubts some extraordinary businesses exist in the Australian consumer discretionary sector. Names like ARB, Nick Scali, JB Hi-Fi and Lovisa jump to mind as soon as talk turns to the consumer. But as we examine the shape of our portfolios, one glaring active weight is the underweighting we have to consumer discretionary companies.
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September 5, 2022

Aura High Yield SME Fund: Letter to Investors 02 September 2022

By Brett Craig

The retail trade and APRA July 2022 data released this week provided more data to support RBA hikes in the coming months. This week the ABS released data for retail trade turnover and volume. This dataset includes references to retail businesses including stores and online sales.

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September 5, 2022

August reporting season wrap

By Roger Montgomery

In the wash-up of the FY22 reporting season a significant amount of focus has been directed to the proportion of companies that beat, met or missed expectations. Roughly 30 per cent of companies beat analyst forecasts, slightly more than 41 per cent were in line with estimates, and the remaining 29-odd per cent missed estimates.
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August 31, 2022

The REA Group wild share price ride

By Roger Montgomery, Roger Montgomery

For a company with such high quality, REA Group (ASX:REA) has experienced an amazing share price range in the last twelve months. On 5 November 2021 REA hit a market capitalisation of $23. 9bn when somebody paid $180. 67 per share. Just seven months later, the share price hit $93. 77 giving the company a market value of $12.
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August 26, 2022

Aura High Yield SME Fund: Letter to Investors 26 August 2022

By Brett Craig

It was a relatively quiet reporting week from an economic and market perspective. Sometimes less news is good news!   This week the ABS released the counts of Australian businesses, which outline the number of actively trading businesses, rates of entry to exit from the market sector of the economy and the rates of business survival.
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August 25, 2022

What the Supercheap and Adairs results tell us about the retail sector

By Roger Montgomery

Some retailers – such as Supercheap Auto (ASX:SUL) – are reporting better than expected results this reporting season. But this hasn’t prevented many analysts from painting a gloomy picture of the retail sector, due largely to the impact of rising interest rates and inflation on consumers’ wallets.
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August 23, 2022

Is Beacon Lighting shooting the lights out long-term?

By Roger Montgomery

Beacon Lighting (ASX:BLX) supplies and distributes lighting and fans through a network of 117 company stores and two franchised stores, five of which were opened in FY22. The company’s own research suggests capacity for 184 stores in Australia. After rallying 571 per cent, from its pandemic-inspired share price lows, to $3.
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August 22, 2022
WHITE PAPERS

Are we there yet? What to do when the bottom of the market is unknown

By Roger Montgomery

The current equity market environment reflects soaring inflation, increasing interest rates and the first half of calendar year 2022 saw a double-digit decline in most major indices. The popularity of large-cap U. S. equities decreased significantly in the wake of their 2020 high point and the volatility of mid-cap and small-cap stocks has been dramatic.
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August 19, 2022

Aura High Yield SME Fund: Letter to Investors 19 August 2022

By Brett Craig

The data presented this week highlights the current mismatch in the labour market and the rising cost of living. When considered holistically the high-level inflationary pressure is eliminating any real growth presented by the rise in the wage price index and the reported average weekly earnings. As interest rates continue to rise in order to combat inflation households will face increasing pricing pressure.

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August 18, 2022

Why our small caps team likes IPH

By Roger Montgomery

IPH Limited (ASX:IPH) is the leading intellectual property services group in the Asia Pacific region and its shares had fallen as much as 15 per cent from their 2020 highs, for no apparent reason, at which point Gary and Dominic from the Montgomery Small Companies Fund added it to the portfolio on the back of its defensive growth characteristics, strong…
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