10k Words - November Edition
We kick off with Australia outpacing Hong Kong in IPO activity, as highlighted by Bloomberg. We can't avoid the inflation discussion and FactorInvestor charts US inflation expectations, while we go back to Bloomberg for a look at inflation-protected treasury yields, which have not followed the script of 2013. IFM Investors looked at how Australia's monthly inflation (using the Melbourne Institute monthly inflation gauge) was still accelerating in year-on-year terms, despite decelerating in terms of month-on-month increases. Then we turn to equity valuation where Redpoint's Tomasz Tunguz explores the phenomenon of Software-as-a-Service (SaaS) valuation multiples rising to 100x their Annualised Recurring Revenue (ARR); while Axios charts the explosion in valuation of rental car companies, aided by hype around electric cars.
Finally, Kailash Capital shows that S&P 500 stocks analysts dislike are priced at a 34% discount to the market, based on a multiple of sales, while stocks that are analyst "darlings" trade at a 17% premium to the market. The unanswered question is whether the pricing is caused by analyst popularity or whether analysts tend to like stocks that are already strongly supported by the market (Kailash suspects there is "self-reinforcing price action as high average returns... force analysts to shift to buy ratings").
Australia outdoing Hong Kong in IPO activity
Tracking US inflation expectations
Yields on Treasury Inflation-Protected Securities (TIPS) now v 2013
Australian Bureau of Statistics (ABS) quarterly headline inflation v Melbourne Institute inflation gauge
Source: IFM Investors
Listed Software-as-a-Service (SaaS) valuation as a multiple of Annualised Recurring Revenue (ARR)
Source: Tomasz Tunguz of Redpoint
Market capitalisation of rental car companies Hertz & Avis
Source: Axios, FactSet
Nothing in this blog constitutes investment advice - or advice in any other field. Neither the information, commentary or any opinion contained in this blog constitutes a solicitation or offer by Equitable Investors Pty Ltd (Equitable Investors) or its affiliates to buy or sell any securities or other financial instruments. Nor shall any such security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.
The content of this blog should not be relied upon in making investment decisions.Any decisions based on information contained on this blog are the sole responsibility of the visitor. In exchange for using this blog, the visitor agree to indemnify Equitable Investors and hold Equitable Investors, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to legal fees) arising from your use of this blog, from your violation of these Terms or from any decisions that the visitor makes based on such information.
This blog is for information purposes only and is not intended to be relied upon as a forecast, research or investment advice. The information on this blog does not constitute a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Although this material is based upon information that Equitable Investors considers reliable and endeavours to keep current, Equitable Investors does not assure that this material is accurate, current or complete, and it should not be relied upon as such. Any opinions expressed on this blog may change as subsequent conditions vary.
Equitable Investors does not warrant, either expressly or implied, the accuracy or completeness of the information, text, graphics, links or other items contained on this blog and does not warrant that the functions contained in this blog will be uninterrupted or error-free, that defects will be corrected, or that the blog will be free of viruses or other harmful components.Equitable Investors expressly disclaims all liability for errors and omissions in the materials on this blog and for the use or interpretation by others of information contained on the blog
Funds operated by this manager: