Searching for Alphabet’s Growth Engines
Last week Alphabet, the parent company of Google, released its financial results for the final quarter and full year of 2019. For the first time management disclosed the revenue contribution of two key growth engines of the company: YouTube and Google Cloud.
The inequality of low interest rates
As global interest rates continue their march towards the floor, we continue to see asset prices inflate. But interest rates do not treat all humans equally. The benefits of compounding asset values accrue largely to the few who are already wealthy. In a lower-for-longer interest rate environment, this dynamic will only accelerate.
What might be the economic impact of the coronavirus?
The coronavirus that originated in China recently has had a devastating human impact. From an economic perspective, this article explores some high-level numbers that might assist investors in grappling with the economic impact of the coronavirus.
Obsessing over margins
Today’s world is characterised by fast-money investors looking for high-growth and high-margin businesses, such that businesses or industries with lower margins are considered “boring” or are frowned upon. But are low margins a dealbreaker on their own?
Parcel delivery: a rock and a hard place
FedEx and UPS are being rapidly featurized by Amazon’s growing logistics business. With an unparalleled lead in e-commerce, data and capital, Amazon is set to shake up the package delivery industry. Can the old incumbents adapt to a new competitive, low margin environment, or will they struggle to survive?
Can “Dr Copper” Catch a Virus?
As the world braces for a potential pandemic with the latest mutation of the coronavirus rapidly spreading across the world, “Dr Copper” has seemingly made up his mind. The commodity is now in the midst of its worst stretch of declines in >34 years. With panic selling gripping the copper market, one wonders whether “Dr Copper” and his mystical ability to predict turning points in the global economy, is telling us to remain cautious once again.
Roll-ups and value creation
Roll-ups, not the fruity snacks, are an extremely attractive strategy for businesses to expand their product portfolios and expand their geographic presence in fragmented markets. Despite their perceived top-line benefits, we at Montaka, question whether that top-line sales growth is generated at the expense of shareholders.
Limits on Growth
Value investing may seem like a simple concept but it necessitates a very challenging task of estimating the future growth of cashflows over coming decades.
Does Valuation Not Matter for High Quality Businesses?
One characteristic of a high quality business is its ability to grow its intrinsic value over time. So does that mean that it’s possible to overpay for a high quality business and then wait for it to “grow into its valuation”?
RealReal Inc – A Deep Dive on a Recent Controversial IPO
To gain more insights about the last quarter of 2019 as well as the year gone by, please have a look at this video featuring Andrew Macken, Montaka’s Chief Investment Officer.
