CSL: The secrets to their success

Published on 22 October 2018

With a market capitalisation of nearly $100 billion and having produced returns of more than 20,000% (200x) for early investors who stuck with it, CSL is one of the true Australian success stories. But what has allowed them to achieve such outstanding success? Troy Angus, Head of Large Caps at Paradice Investment Management, says it comes down to a few main factors.

“They have been very prescient and very forward thinking about putting new capacity of their plasma therapy products into the market, as and when required.”

Three keys to CSL’s success:

  1. A relentless focus on their core competency; blood plasma therapies
  2. Flawless execution. CSL have successfully navigated the ups and downs of the plasma therapies markets to ensure new supply came online when it was needed
  3. A management team of the highest quality, which Troy calls “literally world class.”

Watch the video below to hear his take on which sectors and industries ‘the next CSL’ could come from, and how this could affect some of Australia’s largest companies.

Source: https://www.livewiremarkets.com/wires/csl-the-secrets-to-their-success

What could derail equity markets?

Published on 10 October 2018

With the economy chugging along nicely, and equity markets grinding higher, it’s been pretty smooth sailing for investors in recent years. But there’s one important risk that has the potential to derail the rally: President Trump. Though the potential problems are well known by markets, Troy Angus, Head of Large Caps at Paradice Investment Management, believes there’s a real risk that tariffs could have a significant effect on the economy.

“The first-order impact to global GDP are likely 0.5-0.6% of global GDP… It’s really the second or third order impact from those tariffs… is one of the biggest risks for Australian and global equities.”

In the short video below, Troy discusses how he’s positioning for the current investment environment.

Source: https://www.livewiremarkets.com/wires/what-could-derail-equity-markets

How is corporate Australia holding up?

Published on 28 Sep 2018

With so much discussion about the maturity of the current bull market, it would be easy to assume that corporate balance sheets have fallen into the same state of disrepair we saw before the GFC. Troy Angus, Head of Large Caps at Paradice Investment Management, had only recently launched his fund in 2007, and told us the risks were obvious at the time. But are the same risks present today?

“Broadly, balance sheets are in much better shape. Funding markets are still open for the majority of corporates in Australia, and there are certainly no liquidity or credit concerns of note at the moment.“

But it might not be all rosy on the horizon. In this video, Troy discusses some of the potential future risks, and some of the big decisions boardrooms face today.

Source: https://www.livewiremarkets.com/wires/how-is-corporate-australia-holding-up

The Rule of Investing: What makes a good business?

Published on 14 September 2018

After a chance meeting with legendary stock picker, David Paradice, today’s guest, Kevin Beck, joined Paradice Investment Management to head up their successful Global Small Mid Cap Fund in 2010. Shunning the traditional labels of ‘value’ and ‘growth’, their approach follows the ‘Growth at a Reasonable Price’ philosophy that draws from both schools of thought.

“If you’re paying 30 times earnings, you’re effectively discounting a 3% IRR (internal rate of return). So, you either need to believe that business is growing very quickly for a long period of time, and the multiple holds, or you believe that somebody pays you a higher multiple as some point.”

Tune in below to hear about what he learned from his mentors, how he remains objective, and where he’s seeing opportunities today.

The Rules of Investing: What makes a good business?

Source: https://www.livewiremarkets.com/search/paradice#nav-wires

A big shift in China

Published on 26 April 2018

For many years China has had a single focus of delivering high GDP growth. John Lake from Paradice Investment Management has recently returned from a visit to China and says two important shifts are taking place. One is a focus on sustainability and the environment ahead of growth. The other is the process of deleveraging many of the debt laden state-owned enterprises (SOEs).

“We haven’t really seen this over the years previously be such a focal point. We’ve actually seen it come through and translate into numbers in companies we invest in.”

In this short video Lake highlights some of the companies being impacted and shares his views on how sustainable these changes are likely to be.

Key Points

  • China is shifting away from the pursuit of high GDP growth and is now focusing on sustainability and deleveraging.
  • This has a number of positive flow on effects such as improved environmental outcomes, improved margins and better cashflows for a number of Chinese State Owned Enterprises (‘SOEs’).
  • The changes are also flowing through and having an impact Australian companies such as Bluescope Steel (ASX: BSL) and Whitehaven Coal (ASX: WHC).
  • Lake says with the prospect of Presient Xi Jinping holding an extended term there is reason to believe these changes could be sustained over the medium term.

John Lake is a portfolio manager with the Paradice Australian Mid Cap Fund. For more information visit the Paradice Investment Management website.

Source: https://www.livewiremarkets.com/wires/a-big-shift-in-china