Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Thematic (Sector/Industry)

<ul><li>Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.</li></ul><ul><li>In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.</li><li>Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.</li></ul>

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

<ul><li>Australians' long held fascination with land is part of the national psyche.&nbsp; In a speech delivered overnight, RBA Deputy Governor Philip Lowe shows why.&nbsp;&nbsp;Land accounts for one-third of Australia's national assets and that higher land values - not dwellings - have driven residential property markets higher in recent decades.</li><li>Booming land values reflect favourable demand side influences, including strong growth in population and household incomes, while zoning restrictions have meant that the supply response to higher prices has been muted.&nbsp; With slower expected future income growth and increased concerns about future housing costs, the response to higher housing prices looks to be smaller than it was previously.</li><li>Nonetheless, Mr Lowe acknowledges that that a reduction in the household savings ratio is &lsquo;probably appropriate&rsquo; as the economy re-balances from a terms of trade and mining investment booms.&nbsp; Against this backdrop, I re-iterate my positive view on discretionary retailers.&nbsp; Key stocks to buy: HVN, JBH, DSH, GWA, MYR and PMV.</li></ul>

Australians' long held fascination with land is part of the national psyche.&nbsp; In a speech delivered overnight, RBA Deputy Governor Philip Lowe shows why.&nbsp;&nbsp;Land accounts for one-third of Australia's national assets and that higher land values - not dwellings - have driven residential property markets higher in recent decades.Booming land values reflect favourable demand side influences, including strong growth in population and household incomes, while zoning restrictions have meant that the supply response to higher prices has been muted.&nbsp; With slower expected future income growth and increased concerns about future housing costs, the response to higher housing prices looks to be smaller than it was previously.Nonetheless, Mr Lowe acknowledges that that a reduction in the household savings ratio is &lsquo;probably appropriate&rsquo; as the economy re-balances from a terms of trade and mining investment booms.&nbsp; Against this backdrop, I re-iterate my positive view on discretionary retailers.&nbsp; Key stocks to buy: HVN, JBH, DSH, GWA, MYR and PMV.

Australia's land obsession - Reiterate postive view on discretionary retailers

Macroeconomics

<p>In a blog post last year, I wrote of the lost decade for discretionary retailers; expected profitability was little changed from ten years earlier.&nbsp;A number of structural and cyclical headwinds continued to adversely impact the sector, including the persistently strong Australian dollar, consumer caution associated with the financial crisis and increased competition from e-tailers.&nbsp;In this post, I argue that signs of a less cautious consumer are emerging.&nbsp;There is downside risk to the household saving ratio as households become more optimistic about the future, durable goods spending continues to recover and consumer sentiment should benefit from the positive reaction to the Federal Budget.&nbsp;Against this backdrop, I recommend investors neutralise their under-weight bets in discretionary retailers, with a view to moving overweight as more signs of a less cautious consumer emerge.&nbsp;Getting the sector call right is more important than stock selection, but we highlight stocks that offer the strongest upside, including Echo, GUD, Harvey Norman, Premier Investment and Super Retail.</p>

In a blog post last year, I wrote of the lost decade for discretionary retailers; expected profitability was little changed from ten years earlier.&nbsp;A number of structural and cyclical headwinds continued to adversely impact the sector, including the persistently strong Australian dollar, consumer caution associated with the financial crisis and increased competition from e-tailers.&nbsp;In this post, I argue that signs of a less cautious consumer are emerging.&nbsp;There is downside risk to the household saving ratio as households become more optimistic about the future, durable goods spending continues to recover and consumer sentiment should benefit from the positive reaction to the Federal Budget.&nbsp;Against this backdrop, I recommend investors neutralise their under-weight bets in discretionary retailers, with a view to moving overweight as more signs of a less cautious consumer emerge.&nbsp;Getting the sector call right is more important than stock selection, but we highlight stocks that offer the strongest upside, including Echo, GUD, Harvey Norman, Premier Investment and Super Retail.

A less cautious consumer: Good news for discretionary retailers (finally!)

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ramelius-resources-ltd" target="_blank" data-smartkarma-citation="entities:5968:1" rel="noopener">Ramelius Resources (RMS AU)</a> will be added to the <a href="https://www.smartkarma.com/entities/vaneck-vectors-australian-equal-weight-etf" target="_blank" data-smartkarma-citation="entities:24297:1" rel="noopener">VanEck Vectors Australian Equal Weight (MVW AU)</a> while <a href="https://www.smartkarma.com/entities/telix-pharmaceuticals-ltd" target="_blank" data-smartkarma-citation="entities:26052:1" rel="noopener">Telix Pharmaceuticals (TLX AU)</a> and <a href="https://www.smartkarma.com/entities/treasury-wine-estates-ltd" target="_blank" data-smartkarma-citation="entities:710:1" rel="noopener">Treasury Wine Estates (TWE AU)</a> will be deleted.</li>
<li>The one inclusion, two deletions, capping and float changes result in a one-way turnover of 8% at the rebalance. That leads to a round-trip trade of A$350m.</li>
<li>There will be bigger passive flows in some stocks from the S&amp;P/ASX and global index passive trackers. <a href="https://www.smartkarma.com/entities/ramelius-resources-ltd" target="_blank" data-smartkarma-citation="entities:5968:1" rel="noopener">Ramelius Resources (RMS AU)</a> gets the biggest same-way flow.</li>
</ul>



Ramelius Resources (RMS AU) will be added to the VanEck Vectors Australian Equal Weight (MVW AU) while Telix Pharmaceuticals (TLX AU) and Treasury Wine Estates (TWE AU) will be deleted.
The one inclusion, two deletions, capping and float changes result in a one-way turnover of 8% at the rebalance. That leads to a round-trip trade of A$350m.
There will be bigger passive flows in some stocks from the S&amp;P/ASX and global index passive trackers. Ramelius Resources (RMS AU) gets the biggest same-way flow.


MV Australia Equal Weight Index Rebalance: More Inflows for RMS; TLX, TWE Deleted

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of MS-Australia in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on Santos, Westpac, ANZ, National Australia Bank, Transurban, Origin Energy, Commonwealth Bank Of Australia.</li>
</ul>


We analysed the earning revision of component stocks of MS-Australia in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on Santos, Westpac, ANZ, National Australia Bank, Transurban, Origin Energy, Commonwealth Bank Of Australia.


MS-Australia Index Earning Revision (Feb): Santos, Westpac, ANZ, National Australia Bank, Transurban

Australia

Aristocrat Leisure Limited manufactures and sells gaming machines in Australia and internationally.  The Company also supplies gaming systems, software, table gaming equipment and other gaming related products and services to casinos, clubs and hotels.

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Aristocrat Leisure (ALL AU)

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards...

Sam Ferraro

Australia's land obsession - Reiterate postive view on discretionary retailers

Australians' long held fascination with land is part of the national psyche. In a speech delivered overnight, RBA Deputy Governor Philip Lowe...

Sam Ferraro

A less cautious consumer: Good news for discretionary retailers (finally!)

In a blog post last year, I wrote of the lost decade for discretionary retailers; expected profitability was little changed from ten years...

Sam Ferraro

MV Australia Equal Weight Index Rebalance: More Inflows for RMS; TLX, TWE Deleted

Ramelius Resources will be added while Telix Pharma and Treasury Wine will be deleted. Many stocks have bigger flows from other index trackers at...

Brian Freitas

MS-Australia Index Earning Revision (Feb): Santos, Westpac, ANZ, National Australia Bank, Transurban

We analyzed MS-Australia's consensus for Feb 2026 and highlighted changes of EPS in Santos, Westpac, ANZ, National Australia Bank, Transurban,...

Ke Yan, CFA, FRM

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