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.

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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.

<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 Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>Back on the 30 November, UK-based <a href="https://www.smartkarma.com/entities/wpp-plc" target="_blank" data-smartkarma-citation="entities:22213:1" rel="noopener">WPP PLC (WPP LN)</a>, the world's largest advertising company, tabled a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02315430-2A1266721?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">proposal</a> to delist 61.5%-held subsidiary <a href="https://www.smartkarma.com/entities/wpp-aunz-ltd" target="_blank" data-smartkarma-citation="entities:15931:1" rel="noopener">WPP AUNZ (WPP AU)</a> at A$0.55/share, in cash, a 34.1% premium to last close, and a 69.3% premium to the six-month VWAP. </p>
</div>
<div>
<p>This was an unsolicited Offer and no binding implementation agreement (BIA) had been entered into.</p>
<p>In <em><a href="https://skr.ma/JSrkm" target="_blank" rel="noopener">WPP AUNZ: Mad Men At Work</a></em>, I argued there was an air of opportunism to the Offer, and recommended buying at or below terms - on the expectation of a bump, as management argues the upside from its wide-ranging cost cuts.</p>
<h3><strong>The New News</strong></h3>
<p>WPP PLC has returned with a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02323439-2A1270746?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">A$0.70/share offer</a>, by way of  Scheme, valuing WPP AUNZ at an implied enterprise value of A$717mn. It is the intention of WPP AUNZ to enter into a BIA.</p>
<p>With that 27.3% bump, this looks done.</p>
</div>
<p>More below the fold.</p>
<div>
<p></p>
</div>


Back on the 30 November, UK-based WPP PLC (WPP LN), the world's largest advertising company, tabled a proposal to delist 61.5%-held subsidiary WPP AUNZ (WPP AU) at A$0.55/share, in cash, a 34.1% premium to last close, and a 69.3% premium to the six-month VWAP. 


This was an unsolicited Offer and no binding implementation agreement (BIA) had been entered into.
In WPP AUNZ: Mad Men At Work, I argued there was an air of opportunism to the Offer, and recommended buying at or below terms - on the expectation of a bump, as management argues the upside from its wide-ranging cost cuts.
The New News
WPP PLC has returned with a A$0.70/share offer, by way of  Scheme, valuing WPP AUNZ at an implied enterprise value of A$717mn. It is the intention of WPP AUNZ to enter into a BIA.
With that 27.3% bump, this looks done.

More below the fold.




<p>UK-based <a href="https://www.smartkarma.com/entities/wpp-plc" target="_blank" data-smartkarma-citation="entities:22213:1" rel="noopener">WPP PLC (WPP LN)</a>, the world's largest advertising company, has tabled a proposal to delist 61.5%-held subsidiary <a href="https://www.smartkarma.com/entities/wpp-aunz-ltd" target="_blank" data-smartkarma-citation="entities:15931:1" rel="noopener">WPP AUNZ (WPP AU)</a>.</p>
<p>The Offer price is A$0.55/share, in cash, a 34.1% premium to last close, and a 69.3% premium to the six-month VWAP. </p>
<p>WPP is assessing whether to launch the Offer by way of a Scheme or an Off-Market Takeover.</p>
<p>A fully franked dividend is up for negotiation as part of the Offer; although if paid, it will reduce the Offer price. </p>
<p>A binding implementation agreement has not yet been entered into. The independent directors of WPP AUNZ are considering the proposal.</p>
<p>More below the fold.</p>
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/175/234/original/VfBK.gif?1606711406" class="editor-image img-responsive" data-smartkarma-image-id="175234"></figure>
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UK-based WPP PLC (WPP LN), the world's largest advertising company, has tabled a proposal to delist 61.5%-held subsidiary WPP AUNZ (WPP AU).
The Offer price is A$0.55/share, in cash, a 34.1% premium to last close, and a 69.3% premium to the six-month VWAP. 
WPP is assessing whether to launch the Offer by way of a Scheme or an Off-Market Takeover.
A fully franked dividend is up for negotiation as part of the Offer; although if paid, it will reduce the Offer price. 
A binding implementation agreement has not yet been entered into. The independent directors of WPP AUNZ are considering the proposal.
More below the fold.





Australia

WPP AUNZ Limited operates as a marketing communications services company. The Company offers services that include advertising, production, digital media, brand design, public relations, and research and sponsorship. WPP AUNZ serves customers in Australia.

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WPP AUNZ (WPP AU)

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.

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

WPP AUNZ: More Mad Men At Work

This solid bump should see this deal through. Expect WPP AUNZ to trade tight to terms - I see A$0.70/share as I type - on account of shareholders...

David Blennerhassett

WPP AUNZ: Mad Men At Work

There is an air of opportunism here, however, the indicative Offer Price is okay, if looking at WPP's trading pattern ahead of COVID-19. A bump...

David Blennerhassett

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