Northstar quarterly market reports
The Northstar Market Report provides powerful empirical evidence as to why we are confident that our investment philosophy and process, closely followed, will deliver market beating returns for our clients over time. This work again points to controllable factors - markets move wildly, falling in and out of love with different sectors and companies, but we have a defined formula that works and we stick to our guns by only owning quality companies when they are incorrectly valued by other investors. We discuss stocks in this report, delving into our investment cases for specific securities which we own.
CURRENT QUARTERLY REPORT
2018 – Quarter 1
THE BIG PICTURE
Does quality investing work?
‘Long-term exposure to quality assets where value exceeds price’ defines our investment belief system and our behavior too in that it determines the characteristics we seek in companies that are allowed into our clients’ portfolios.
FROM THE ANALYSTS: EQUITIES
AECI – Not just an explosive business
AECI is South Africa’s largest explosives manufacturer and a dominant player in the specialty chemical industry. The group has a long history in the South African mining landscape having been formed in 1924 with its main purpose to provide explosives and detonators to the gold and diamond industries.
FROM THE ANALYSTS: EQUITIES
British American Tobacco – Dawn of a new generation
British American Tobacco (BAT) has produced double-digit returns on capital for the last decade. We ascribe this to four factors. Firstly, being the third largest tobacco producer globally in a highly consolidated market; secondly, it’s significant cost advantage generated through economies of scale throughout its supply chain; thirdly, industry regulation limiting new competition and finally, the company’s Global Drive Brands fostering brand loyalty which propels pricing power of its products.
FROM THE ANALYSTS: FIXED INCOME
What is priced into SA bonds?
When did your interest in financial markets start? Fixed income investors have experienced a rollercoaster ride of events since 2012, which is when South Africa’s credit rating started to slide, highlighting the importance of adhering to a set of sound investment principles in realizing required returns without incurring permanent capital loss.
CLIENT CORNER AND NORTHSTAR NEWS
Our office move and strategy around client contact
Remaining dedicated to our value system Considering Northstar Asset Management’s mantra is: ‘Consistent long-term investment performance underpinned by exceptional client service’, our clients should expect all our behaviour to revolve around the key concepts of generating investment returns and improving service to you.
Will the ANC expropriate land without compensation aggressively?
The great land debate and what’s really at stake. Boardrooms and dining rooms across South Africa have been abuzz with the news of parliament’s recent passing of the EFF motion to look into amending section 25 of the Constitution (commonly referred to as the “property clause”) to allow for the new phrase de jour: “expropriation without compensation”.
STAFF MEMBER PROFILE
When did your interest in financial markets start?
My interests in markets goes way back to the mid 1970’s. I guess the beauty of this is that I’ve seen my fair share of cycles. The 1970’s was a tough time for investors.
QUARTERLY REPORTS ARCHIVE
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