Active Stock Portfolio Updates - April 2019
Intelligent Investor Equity Growth Portfolio
The share price of casino operator Star Entertainment has fallen by almost a third from its peak. It now trades on an attractive EV/EBITDA (enterprise value to earnings before interest, tax, depreciation and amortisation) multiple of just over eight compared to a multiple of thirteen for Crown Resorts should James Packer get his price. Star also yields a handy 5.5% while we wait for the completion of its massive new Brisbane casino in 2022...
Intelligent Investor Equity Income Portfolio & ASX:INIF
How do you spot a bubble in technology stocks? A good sign is when investors are paying many tens of billions of dollars for ‘platforms’ that lose billions of dollars while their private sponsors that get paid huge fees sell out.
Pinterest, WeWork, Uber and Lyft are just some of the US names that have listed recently or are about to. The common thread, aside from the fact that Uber and Lyft are rivals, is that they boast multi-billion-dollar market values and either measly profits (Pinterest) or large losses without a clear path to profitability, yet alone profits that justify a near US$100bn valuation in Uber’s case...
InvestSMART Australian Small Companies Fund
Outside of a handful of quarterly results that met our expectations it was a quiet month for portfolio news, so we’ll take this opportunity to discuss our thoughts on portfolio management. One of the less discussed but more important parts of investing.
When we hunt for new investments, we generally look for four things: competitive advantage, scalability, alignment and execution. We aim to find companies that rank well across all four, but in practice, we often compromise in some areas. Perfect investments are extremely rare, so the art of investing is knowing when to bend the rules...
InvestSMART Hybrid Income Portfolio
For the month of April, the total portfolio return was 0.35% and 1.40% for the three months since end of January. Since inception, the total return of the portfolio is 4.57%.
April was a low-income month, with no securities trading ex-dividend...
Frequently Asked Questions about this Article…
Star Entertainment's share price has dropped by almost a third from its peak. This decline may be attributed to market conditions and investor sentiment, but it now trades at an attractive EV/EBITDA multiple, offering potential value for investors.
Star Entertainment is considered attractive due to its EV/EBITDA multiple of just over eight, which is lower compared to Crown Resorts. Additionally, it offers a yield of 5.5% while investors await the completion of its new Brisbane casino in 2022.
A bubble in technology stocks can often be identified when investors pay exorbitant amounts for companies that are losing money. Examples include companies like Pinterest, WeWork, Uber, and Lyft, which have high market valuations but lack clear paths to profitability.
InvestSMART emphasizes four key factors in portfolio management: competitive advantage, scalability, alignment, and execution. While perfect investments are rare, understanding when to compromise is crucial in the art of investing.
In April, the InvestSMART Hybrid Income Portfolio achieved a total return of 0.35%. Over the three months since the end of January, the portfolio's total return was 1.40%, and since inception, it has returned 4.57%.
April was a low-income month for the InvestSMART Hybrid Income Portfolio because no securities were trading ex-dividend during this period, which typically contributes to income generation.
EV/EBITDA multiples are significant because they provide a measure of a company's valuation relative to its earnings before interest, tax, depreciation, and amortization. A lower multiple can indicate a potentially undervalued investment opportunity.
Recent examples include Pinterest, WeWork, Uber, and Lyft. These companies have achieved multi-billion-dollar market valuations despite having either minimal profits or significant losses, raising concerns about their long-term profitability.
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