Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Macroeconomics

<div class="content-highlight">The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors.</div> We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: <ul><li><div class="content-highlight">The failure of some…</div></li></ul>

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors. We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: The failure of some…

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Event-Driven

Qube Holdings and a consortium of global investors including Brookfield Infrastructure have entered into a binding agreement to take over Asciano for AUD 9.15 per share in cash.The Asciano board has unanimously recommended voting in favour in the absence of a superior offer and subject to approval from an independent expert.In our view, the takeover offer more than fully values Asciano, valuing the company on a forecast 2017 EV/EBITDA of 10.3 times, a 2017 P/E of 20.7 times and a 40% premium to our fair value of AUD 6.50 prior to the bidding war machinations.Analysts: Adrian Atkins &amp; Carolyn Holmes

Qube Holdings and a consortium of global investors including Brookfield Infrastructure have entered into a binding agreement to take over Asciano for AUD 9.15 per share in cash.The Asciano board has unanimously recommended voting in favour in the absence of a superior offer and subject to approval from an independent expert.In our view, the takeover offer more than fully values Asciano, valuing the company on a forecast 2017 EV/EBITDA of 10.3 times, a 2017 P/E of 20.7 times and a 40% premium to our fair value of AUD 6.50 prior to the bidding war machinations.Analysts: Adrian Atkins &amp; Carolyn Holmes

Qube/Brookfield Looks Set to Secure Asciano; We Recommend Accepting the AUD 9.15 Offer

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

QUBE holdings plans to raise A$490m through a fully underwritten 1 for 4.4 accelerated non-renounceable entitlement offer at A$2.04/share. In addition, Qube will raise an additional A$306m through placement to CPPIB at a A$2.14/share. The proceeds from the deal will be used to partly fund the acquisition of 50% stake in Patrick Container Terminals Business. The deal scores a marginal positive score on our framework, scoring well on most metrics apart from earnings momentum. However, the deal…

QUBE holdings plans to raise A$490m through a fully underwritten 1 for 4.4 accelerated non-renounceable entitlement offer at A$2.04/share. In addition, Qube will raise an additional A$306m through placement to CPPIB at a A$2.14/share. The proceeds from the deal will be used to partly fund the acquisition of 50% stake in Patrick Container Terminals Business. The deal scores a marginal positive score on our framework, scoring well on most metrics apart from earnings momentum. However, the deal…

QUBE Holdings - Well Flagged Deal Means Limited Risk and Possibly Limited Returns

<ul><li class="p1">Qube is strategically working toward potentially securing Asciano’s port terminal businesses. Building an integrated ports/haulage and logistics business makes strategic sense, but Qube would potentially be valuing the Patrick terminals and ports business at AUD 2.915 billion, generating an EBIT of around AUD 170 million, implying a hefty EV/EBIT of 17 times.</li><li class="p1">Given this (in addition to the Moorebank intermodal terminal, the Quattro grain terminal and rail haulage operation, and the TQ fuel terminal at Port Kembla) the medium- to longer-term outlook for Qube is exciting, but financial details are limited.</li></ul>Analysts: Adrian Atkins &amp; Carolyn Holmes

Qube is strategically working toward potentially securing Asciano’s port terminal businesses. Building an integrated ports/haulage and logistics business makes strategic sense, but Qube would potentially be valuing the Patrick terminals and ports business at AUD 2.915 billion, generating an EBIT of around AUD 170 million, implying a hefty EV/EBIT of 17 times.Given this (in addition to the Moorebank intermodal terminal, the Quattro grain terminal and rail haulage operation, and the TQ fuel terminal at Port Kembla) the medium- to longer-term outlook for Qube is exciting, but financial details are limited.Analysts: Adrian Atkins &amp; Carolyn Holmes

Exciting Medium-Term Growth Options Remain the Focus for Qube

Equity Bottom-Up

Australia & New Zealand Bankin / Equity Bottom-Up

<ul><li>The most compelling equity ideas globally from Morningstar's coverage universe.</li><li>Updated for February 2016.</li><li>Recent Asian additions: <a href="https://www.smartkarma.com/entities/443" target="_blank" data-smartkarma-citation="entities:443">ANz Bank,</a> and <a href="https://www.smartkarma.com/entities/914" target="_blank" data-smartkarma-citation="entities:914">Platinum Asset Management</a>.</li><li>Recent Asian deletions: <a href="https://www.smartkarma.com/entities/711" target="_blank" data-smartkarma-citation="entities:711">Santos</a>, <a href="https://www.smartkarma.com/entities/693" target="_blank" data-smartkarma-citation="entities:693">Brambles</a>, <a href="https://www.smartkarma.com/entities/917" target="_blank" data-smartkarma-citation="entities:917">Csl Ltd</a> &amp; <a href="https://www.smartkarma.com/entities/958" target="_blank" data-smartkarma-citation="entities:958">Qube Holdings</a></li></ul>Analysts: Michael Holt CFA

The most compelling equity ideas globally from Morningstar's coverage universe.Updated for February 2016.Recent Asian additions: ANz Bank, and Platinum Asset Management.Recent Asian deletions: Santos, Brambles, Csl Ltd &amp; Qube HoldingsAnalysts: Michael Holt CFA

Australia

Qube Holdings Ltd. is a logistics company. The Group operates in divisions covering Automotive, Bulk and General Stevedoring, Landside Logistics and Strategic Development Assets.

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Qube Holdings (QUB AU)

Beware Impairments in EM and Asia

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for...

Mark Artherton

QUBE Holdings - Well Flagged Deal Means Limited Risk and Possibly Limited Returns

QUBE holdings plans to raise A$490m through a fully underwritten 1 for 4.4 accelerated non-renounceable entitlement offer at A$2.04/share. In...

Sumeet Singh

Exciting Medium-Term Growth Options Remain the Focus for Qube

Qube is strategically working toward potentially securing Asciano’s port terminal businesses. Building an integrated ports/haulage and logistics...

Morningstar, Inc.

Equity Best Ideas

The most compelling equity ideas globally from Morningstar's coverage universe. Updated for February 2016. Recent Asian additions: ANz...

Morningstar, Inc.

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Beware Impairments in EM and Asia

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for...

Mark Artherton

Qube/Brookfield Looks Set to Secure Asciano; We Recommend Accepting the AUD 9.15 Offer

Qube Holdings and a consortium of global investors including Brookfield Infrastructure have entered into a binding agreement to take over Asciano...

Morningstar, Inc.

QUBE Holdings - Well Flagged Deal Means Limited Risk and Possibly Limited Returns

QUBE holdings plans to raise A$490m through a fully underwritten 1 for 4.4 accelerated non-renounceable entitlement offer at A$2.04/share. In...

Sumeet Singh

Exciting Medium-Term Growth Options Remain the Focus for Qube

Qube is strategically working toward potentially securing Asciano’s port terminal businesses. Building an integrated ports/haulage and logistics...

Morningstar, Inc.

Equity Best Ideas

The most compelling equity ideas globally from Morningstar's coverage universe. Updated for February 2016. Recent Asian additions: ANz...

Morningstar, Inc.