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Showing posts from December, 2019

Ten Thousand Words: December 2019

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Apparently, Confucius didn’t say “One Picture is Worth Ten Thousand Words” after all. It was an advertisement in a 1920s trade journal for the use of images in advertisements on the sides of streetcars. Even without the credibility of Confucius behind it, we think this saying has merit. Each month we share a few charts or images we consider noteworthy.
With another calendar year coming to a close and interest rates remaining "lower for longer", there are plenty of measures by which large-cap equities look to be priced highly. In Australia, the market PE multiple has continued to expand to record levels despite earnings expectations softening, as Morgan Stanley sets out. Australian consumer confidence, by the way, is at its lowest point for several years, according to the ANZ-Roy Morgan survey (but the implication for stocks is unclear). Looking globally, here are some of the ways by which stocks can be measured as over-priced or fully-priced: we have a high S&P 500 PEG r…

We're not Amays-ed to hear of M&A interest

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Press reports indicate that potential acquirers are eyeing off digital-first mobile telephone and energy retailer Amaysim (ASX code: AYS) - either to buy it all or to split mobile and energy.

The Australian says here that "private equity firm Anchorage Capital Partners is the latest group to kick the tyres on Amaysim, which has been under scrutiny from other buyout funds and even telco Optus". It goes on to add that "at least one group" is considering buying both Amaysim and the retail arm of Vocus.

Equitable Investors Dragonfly Fund owns shares in Amaysim and wrote about it as a likely M&A candidate in our last monthly update.

Here's what we wrote:

Amaysim (AYS) is deliberately investing in building out its customer base to put in the best position to negotiate supply terms but we think that at the same time it will be making itself more attractive to acquirers. AYS has just under one million mobile subscribers as well as 203,000 energy customers. 

Its marke…

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