Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>Consumer products outfit <a href="https://www.smartkarma.com/entities/mcpherson-s-ltd" target="_blank" data-smartkarma-citation="entities:6729:1" rel="noopener">Mcpherson's Ltd (MCP AU)</a> has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02357218-2A1289056?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an unconditional, <em>on-market</em> cash Offer of $1.34/share from the Kin Group. The Offer price was a 9.8% premium to last close.</div>
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<div>The Offer period closes on the 9 April - unless extended.</div>
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<div>Unlisted Kin Group also <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02357231-2A1289074?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it held 6.35mn shares or 4.95% of shares out.</div>
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<div>The Kin Group has an MO for these types of Offers. And not always with runaway success. That may be the case again here - MCP has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02357371-2A1289165?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">recommended</a> shareholders take no action, and that the Offer is "<em>utterly opportunistic and profoundly undervalues</em>" the company.</div>
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<div>More below the fold.</div>

Consumer products outfit Mcpherson's Ltd (MCP AU) has announced an unconditional, on-market cash Offer of $1.34/share from the Kin Group. The Offer price was a 9.8% premium to last close.

The Offer period closes on the 9 April - unless extended.

Unlisted Kin Group also announced it held 6.35mn shares or 4.95% of shares out.


The Kin Group has an MO for these types of Offers. And not always with runaway success. That may be the case again here - MCP has recommended shareholders take no action, and that the Offer is "utterly opportunistic and profoundly undervalues" the company.


More below the fold.

McPherson (MCP AU): Unconditional On-Market Offer

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

Thematic (Sector/Industry)

<p>Leisure companies under our coverage endured a torrid reporting season, with average fiscal 2017 first-half EBITDA fall of 15% from a year ago. The results were mostly driven by factors specific to each group. Still, whether it is the sentiment impact of an isolated theme park tragedy, competitive intensity in the U.S. leisure market, low airfares, or film popularity, the bottom line is there are many variables beyond management's control in the industry. These factors are the very basis for our…</p>

Leisure companies under our coverage endured a torrid reporting season, with average fiscal 2017 first-half EBITDA fall of 15% from a year ago. The results were mostly driven by factors specific to each group. Still, whether it is the sentiment impact of an isolated theme park tragedy, competitive intensity in the U.S. leisure market, low airfares, or film popularity, the bottom line is there are many variables beyond management's control in the industry. These factors are the very basis for our…

Not Much Fun In Leisure; Ardent Leisure Undervalued While Event Hospitality Worth Monitoring

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.

Equity Bottom-Up

<ul><li>Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers, challenging the conventional view that the consumer is being weighed down by record levels of indebtedness and historically low wages growth.  This post provides an update on the performance of discretionary retailers and re-visits whether the fundamentals for the consumer and sector have changed.  </li><li>Evidente continues to recommend an overweight bet in the interest sensitive discretionary retailers.  The RBA has little choice but to keep interest rates low for an extended period to ensure that consumption supports activity at a time when animal spirits in the corporate sector remain dormant. </li><li>When using an alternative measure of indebtedness, Australia's consumer does not appear to be stretched.  In a climate when many of the blue chips in the ASX200 are ex-growth, Evidente believes that discretionary retailers offer strong growth prospects based on the expectation of continued strong growth in discretionary spending patterns.</li></ul>

Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers, challenging the conventional view that the consumer is being weighed down by record levels of indebtedness and historically low wages growth.  This post provides an update on the performance of discretionary retailers and re-visits whether the fundamentals for the consumer and sector have changed.  Evidente continues to recommend an overweight bet in the interest sensitive discretionary retailers.  The RBA has little choice but to keep interest rates low for an extended period to ensure that consumption supports activity at a time when animal spirits in the corporate sector remain dormant. When using an alternative measure of indebtedness, Australia's consumer does not appear to be stretched.  In a climate when many of the blue chips in the ASX200 are ex-growth, Evidente believes that discretionary retailers offer strong growth prospects based on the expectation of continued strong growth in discretionary spending patterns.

Australian Discretionary Retailers Defy Record Low Wage Growth - Retain Overweight

<ul><li>In May of last year, Evidente published a post recommending that investors have an overweight bet in Australia’s discretionary retailers based on preliminary signs of a less cautious consumer were emerging.  I expected that there were downside risks to the household saving ratio as consumers became more optimistic about the future, but at the same time acknowledged that record low wages growth would constrain gain in household incomes.</li><li>In hindsight, the positive sector call was too early.  Discretionary retailers under-performed the broader market through to mid-October.  Since then however, the sector has strongly out-performed as the household saving ratio has declined to its lowest level since 2008, as revealed in this week's National Accounts release.  This has occurred despite the moderation of house price gains in Melbourne and Sydney in the December quarter.</li><li>While the economy remains on the precipice of a capex cliff, the RBA has little choice but to keep interest rates low to support growth in household consumption and dwelling investment.  Evidente therefore expects the household saving ratio to decline further and the recent strong performance from discretionary retailers to continue.  We identify seven stocks exposed to this investment theme.</li></ul>

In May of last year, Evidente published a post recommending that investors have an overweight bet in Australia’s discretionary retailers based on preliminary signs of a less cautious consumer were emerging.  I expected that there were downside risks to the household saving ratio as consumers became more optimistic about the future, but at the same time acknowledged that record low wages growth would constrain gain in household incomes.In hindsight, the positive sector call was too early.  Discretionary retailers under-performed the broader market through to mid-October.  Since then however, the sector has strongly out-performed as the household saving ratio has declined to its lowest level since 2008, as revealed in this week's National Accounts release.  This has occurred despite the moderation of house price gains in Melbourne and Sydney in the December quarter.While the economy remains on the precipice of a capex cliff, the RBA has little choice but to keep interest rates low to support growth in household consumption and dwelling investment.  Evidente therefore expects the household saving ratio to decline further and the recent strong performance from discretionary retailers to continue.  We identify seven stocks exposed to this investment theme.

Retain Positive View on Australia's Discretionary Retailers

<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

Australia

The Reject Shop Limited operates discount retail stores in Victoria, New South Wales, South Australia and the ACT.  The Company's discount stores offers a variety of merchandise such as apparel, houseware, leisure, personal care and hardware and furniture.

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Reject Shop (TRS AU)

McPherson (MCP AU): Unconditional On-Market Offer

Currently trading 4% through terms. You have a hard floor for the next fortnight - and potentially thru to early July is using its Offer for Reject...

David Blennerhassett

Not Much Fun In Leisure; Ardent Leisure Undervalued While Event Hospitality Worth Monitoring

Leisure companies under our coverage endured a torrid reporting season, with average fiscal 2017 first-half EBITDA fall of 15% from a year ago. The...

Morningstar, Inc.

Australian Discretionary Retailers Defy Record Low Wage Growth - Retain Overweight

Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers,...

Sam Ferraro

Retain Positive View on Australia's Discretionary Retailers

In May of last year, Evidente published a post recommending that investors have an overweight bet in Australia’s discretionary retailers based on...

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

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