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>The key company announcement during the week in Australia came from Woodside Petroleum, that it had provided Oil Search a confidential, all scrip, non-binding proposal to merge.&nbsp;</li><li>I recommend that investors avoid Woodside for four reasons: Mergers &amp; Acquisitions 101 says that acquirers that make all scrip bids typically perform poorly, it is not clear that Woodside can extract synergies from managing Oil Search's assets, integration of the target's assets will further lift Woodside's complexity and agency costs, and analysts continue to downgrade the stock's future growth prospects.</li><li>The sharp drop in consumer sentiment highlights that the elevated level of financial market volatility in recent months has adversely affected the psychology of the household sector.&nbsp; Nonetheless, a number of macro tailwinds are expected to support the outlook for discretionary retail spending.</li></ul>

The key company announcement during the week in Australia came from Woodside Petroleum, that it had provided Oil Search a confidential, all scrip, non-binding proposal to merge.&nbsp;I recommend that investors avoid Woodside for four reasons: Mergers &amp; Acquisitions 101 says that acquirers that make all scrip bids typically perform poorly, it is not clear that Woodside can extract synergies from managing Oil Search's assets, integration of the target's assets will further lift Woodside's complexity and agency costs, and analysts continue to downgrade the stock's future growth prospects.The sharp drop in consumer sentiment highlights that the elevated level of financial market volatility in recent months has adversely affected the psychology of the household sector.&nbsp; Nonetheless, a number of macro tailwinds are expected to support the outlook for discretionary retail spending.

Macroeconomics

<p>In a wide ranging speech delivered overnight in New York,&nbsp;Glenn Stevens, provided more colour on his prior communications in which he has bemoaned the low level of entrepreneurial risk taking across Australia's corporate sector and implored businesses to invest for future growth prospects.&nbsp; Mr Stevens has acknowledged that lower returns on safe assets have not&nbsp;pulled down the cost of capital because there has been an offsetting rise in the equity risk premium.&nbsp;&nbsp; The risk free rate is low due to factors that are restraining corporate investment: low expected earnings growth and a high expected risk premium.&nbsp; I show that the lower risk free rate and lift in the risk premium have contributed to the relative rise in multiples of defensive stocks, and expect their lofty valuations to persist as long as animal spirits remain dormant.</p>

In a wide ranging speech delivered overnight in New York,&nbsp;Glenn Stevens, provided more colour on his prior communications in which he has bemoaned the low level of entrepreneurial risk taking across Australia's corporate sector and implored businesses to invest for future growth prospects.&nbsp; Mr Stevens has acknowledged that lower returns on safe assets have not&nbsp;pulled down the cost of capital because there has been an offsetting rise in the equity risk premium.&nbsp;&nbsp; The risk free rate is low due to factors that are restraining corporate investment: low expected earnings growth and a high expected risk premium.&nbsp; I show that the lower risk free rate and lift in the risk premium have contributed to the relative rise in multiples of defensive stocks, and expect their lofty valuations to persist as long as animal spirits remain dormant.

Australia

Sandon Capital Investments Ltd is a listed investment company incporporated in Australia. The Fund aims to provide investors with access to an activist investment strategy that a few investors have the capacity to implement themselves.

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Sandon Capital Investments (SNC AU)

Weekly Impressions

The key company announcement during the week in Australia came from Woodside Petroleum, that it had provided Oil Search a confidential, all scrip,...

Sam Ferraro

Beware of bubble talk, for now

In a wide ranging speech delivered overnight in New York, Glenn Stevens, provided more colour on his prior communications in which he has bemoaned...

Sam Ferraro

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