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!)

Australia

Tatts Group Ltd. provides diversified network gambling services.

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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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)