10k Words - April 2020

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.

The damage to the Australian retail sector is set out in The Australian's store closure count and reinforced with an update on payments volumes from Tyro Payments (ASX code: TYR). Meanwhile, sell-side analysts have proven slow to respond to the impact of COVID-19 and social-distancing, as evidenced by UBS' aggregatge numbers for the ASX - but they are starting to catch up. Markets threw the baby out with the bath water when the epidemic hit home but now businesses that aren't immediately hit are being looked at again, like The Citadel Group (ASX code: CGL), which sells software and consulting to the government and health sectors (as well as enterprise, disclosure Equitable Investors has interests in CGL). Who believes in a "V"-shaped recovery when the world emerges from this recession? Only 15% of fund managers, according to the latest Bank of America Merrill Lynch survey.


Retail store closures in Australia in late March 2020


Source: The Australian


Australian electronic payments platform Tyro reports >43% April slow-down


Source: Tyro Payments


Sell-side research slow to react to circumstances (Dec 3, 2019 to Apr 3, 2020 - a comparison of past and present estimates from UBS)


Source: UBS, Equitable Investors


... but starting to catch up (Dec 3, 2019 to Apr 17, 2020 - a comparison of past and present estimates from UBS)


Source: UBS, Equitable Investors


Citadel Group (CGL) EV/EBITDA (based on consensus estimates)

Source: Sentieo


Investors' expectations for economic recovery
Source: BAML, Global Fund Manager Survey, April 14, 2020


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