Thanks for that Mongy
So what is the average long term consensus % discount to analysts recommendations in history. They don't make money calling things fair value and rarely put out sells . So that leaves a model like this in a precarious position as many industries rely on a key metric , media- advertising spend and economic confidence etc, oil gas industry producers - commodity price - hedging - development costs , retail travel , wagering, food- consumer ecconomic confidence ,
Would be very interesting to process more data and do the same for 6, 12 and 18 months ago and actually correlate each sector and the ability of analysts " expectations" and align it with corporate activity etc .
Quite a few on the list I can see reason for discount basically being sold down due to " trade war and possible lower economic activity - yep people lightening with expectations of competitive pressure and recession possibility going forward.I can see quite a few that will be possibly affected by Australian political party change with possible lower economic activity if labor get in via retail confidence as well.?
So a couple on that list stand out to me Cleanaway- haven't had a look for ages so not sure why the discount or if it is justified.? Quick look and it has been a long term market outperformer and possibly struggling to expand market now and with china not taking waste and locked in contracts funds may not think it can increase margin, grow and even if there is political change to labor the reality is extra enviro controls or waste charges probably won't make it to the company that actually does the dirty work. Need to look more into these guys as I haven't for years
Ansell- been doing buyback for as long as I can remember and been at a discount as well. Mexico production a reason now with USA politics? Can't find something other than their own shares for a better return?
Smartgroup- well they deserve the discount as I have posted on their thread. Look they have great idea at low cost now being on google cloud and should have no impediment to being able to provide a IOT platform ( not just parking) but have poorly managed their parking assetts and other IOT hasn't got scale. Poor communication ( nicest thing I can say and not get a lawyers letter) , remote management to key income production and missing the drive to get scale and be a dominant player in parking has now left them battling with consolidated players and new entrants coming in with cheaper costs ( they have lost 50% of entry hurdle to industry). Fund managers will be well pissed off and not sure what discount or news would get them back on board after being so shafted and yes they oversold it to exit but to date the discount seems justified until smart get off their bums and actually communicate what they are up to and the real numbers on new contracts and new terms of contracts so everyone can get an Idea of their margin going forward.
We should put this one in the diary ( set it up as a portfolio) for 6 12 and 18 months forward monitoring monthly and write a quick note on all 100 NTA of why they did or didn't achieve expectations of analysts or sector industry averages as I can't see a obvious pattern and simply don't have enough $ to diversify over the 100. So basically if it was a fund and this was it's stockpicks how will it look going if trailing stops were placed 10% low of previous months so at least the runners lock in some profit and set another paper portfolio up with just holding all and no active trading.
Cheap article and story unless it is done annually and followed up monthly ?
The sheer fact that media has come at a great discount is no surprise to me as it is a industry quickly changing and income to incumbents can disappear as new advertising $ goes to new areas that they currently aren't involved in but they still have scale and can buy the right companies that are growing or leverage the same ideas into their own business structure if they get more nimble. They don't have a great record of doing that as new technology and ideas often go through several cycles of introduction boom and bust and it is a minefield picking the buster after buster ( like drilling duster after duster).
Ah well I'll look back at this and also follow up on some of the companies on the list that I am not that aware of and haven't looked at for ages and especially look at their volatility in general to see if it is cyclical , management based or opportunity based discount and look at the metrics in the sectors to see if "best company in sector" is justified in it's valuation .
So OSH- geeze historically a discount to market is nothing new to holders. Country , politics, oil gas price and now with risk of entry into Alaska and drilling to start. Not a bad punt as if they prove up Alaska and keep managing PNG for next trains and if the gas market goes as predicted with a quick recession to dry up other competitors funding for new gas we will be sitting pretty with upside and eventually with Alaska production OSH will have a awakening as not being a 1 country wonder but a actually good manager who has had a bit f risk weighted luck. . If none of the above come good then discount is justified. Now question is buy more and exit those coming up to drill and a bit of excitement - it may run ? Or sit as world economy decline can happen and will be no pressure on oil gas prices so won't be a exciting sector? Just when will opec , oil shale , russian gas etc be in balance ( take a few unecconomic producers to go bust) and more demand come online at which point there is commodity price upside? Trade a producer with all other risks or just buy some oil future calls , keep rolling them and not have to worry about individual producer metrics and activities???
Going to be a interesting 4 months coming up.
