Insights
Our latest investment insights from the trail

Firetrail Weekly | Three things that got the team talking this week
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January 15th 1. Trump got impeached, again! But it seems investors took little notice and are just Biden’ their time to the inauguration next Wednesday, and Joe’s promised “trillions” in stimulus. There have been some extraordinary measures taken in the US in...

Firetrail Webinar | Navigating the great style rotation of 2020
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Join Firetrail’s Deputy Managing Director and Portfolio Manager Blake Henricks, and Portfolio Manager Scott Olsson, as they discuss the recent market rotation of Growth into Value, and the impacts for the Firetrail Australian High Conviction Fund

Firetrail signs United Nations-supported Principles for Responsible Investment
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As part of ongoing efforts to foster responsible investing across the business, Firetrail is pleased to announce that it has signed the United Nations-supported Principles for Responsible Investment (“PRI”)

Firetrail Analyst Series | Christmas lights beckoning advertisers back into the market
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In the fifth iteration of the Firetrail analyst series, Firetrail Australian Small Companies Fund analyst, Eleanor Swanson, gives us an update on the media sector recovery, as Australia opens back up to a ‘Covid-normal’ state. She also discusses where the Small Companies Fund is finding bright spots as we head into Christmas.

Firetrail awarded Alternative Fund Manager of the Year by Zenith
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The Firetrail Absolute Return Fund has been recognised at the Zenith Fund Awards as the Alternative Manager of the year in 2020.

Firetrail Webinar | Now is the Time to Invest in Alternatives
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Join Managing Director, Patrick Hodgens and Portfolio Manager, Ramoun Lazar in their Q3 2020 webinar as they discuss performance, positioning and the outlook for the Firetrail Absolute Return Fund.

ASX and Firetrail Investments: The role of alternatives in investor’s portfolios
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Alternatives can deliver better risk adjusted outcomes for your portfolio.
But many investors don’t understand how alternatives like Hedge Funds actually work.
In this interview with ASX, Kyle Macintyre explains how hedge funds work (in particular shorting) and the role they can play in your portfolio.

Firetrail Analyst Series | One way to catch post-COVID upside
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In the fourth iteration of the Firetrail Analyst Series we take a deep dive into the Australian retail sector, and assess the impacts from COVID. Analyst and retail guru, Tom Kierath, takes us through who we think the winners and losers will be in this environment over the next 12 to 24 months.

Pinnacle 2020 Virtual Summit | Australian Equities – Large Caps presentation with Firetrail
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Firetrail Deputy MD and Portfolio Manager, Blake Henricks, recently presented at the Pinnacle 2020 Virtual Summit. Blake discussed the high conviction, unconstrained, investing approach of the Firetrail Australian High Conviction Fund, which provides access to the best opportunities across the market.

Pinnacle 2020 Virtual Summit | Alternatives Strategies presentation with Firetrail
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Firetrail MD and Portfolio Manager, Patrick Hodgens, recently presented at the Pinnacle 2020 Virtual Summit. Patrick discussed current equity market dynamics, and the benefits of including an alternative investment strategy like the Firetrail Absolute Return Fund in your portfolio.

Buy Hold Sell: 5 of the best performing growth stocks
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In this episode, James Marlay is joined by Eleanor Swanson of Firetrail Investments and Jun Bei Liu of Tribeca Investment Partners for a high-energy, no-fence-sitting debate on whether Australia’s growth miracles can keep on keeping on.

Buy Hold Sell: 4 fundie favourites, and why CSL is a sell
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In this episode we cover a delectable cross-section of these companies: two of which are Blake Henricks from Firetrail Investments’ favourites: Newcrest Mining, the gold giant whose outlook is underappreciated; and Telstra, offering a 4.5% dividend yield that he says will increase.

Predicting the winners and losers of earnings season
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With August results season around the corner, investors will finally get a clear picture of COVID-19’s impact on corporate Australia. For Blake Henricks from Firetrail Investments, the big things to watch are how companies protect balance sheets and whether the market buys management narratives around structural changes in response to the pandemic.

Firetrail Analyst Series | A new lease on life for this property stock?
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In the third iteration of the Firetrail Analyst Series we take a deep dive into Australian developer, Lendlease. Portfolio Manager, Blake Henricks, takes us through the strong development pipeline, and why we think this company offers compelling long-term value.

Firetrail Analyst Series | Where to for the Australian Banks?
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The next iteration of the Firetrail Analyst Series dives into an incredibly important sector for income investors and SMSFs: Australian banks. Our Analyst, Scott Olsson, provides our view on the sector, and the two banks we like right now.

Firetrail Analyst Series | Amcor: An inexpensive defensive with growth optionality
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Welcome to the Firetrail Analyst Series, where we take a deep dive into a stock or a sector with one of our key analysts, where we focus on what really matters for that business. In our first video Ramoun Lazar explains why we like Amcor, one of the largest packaging companies in the world.

Firetrail Webinar | It’s a stock pickers market! Generating alpha through long & short opportunities
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Join Patrick Hodgens, Firetrail’s Managing Director and James Miller, Portfolio Manager as they discuss how Firetrail capture the best long and short opportunities, whilst minimising your portfolios exposure to equity market movements.

Firetrail Webinar | What are the best opportunities looking beyond COVID-19?
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The short-term outlook for markets is uncertain. But looking beyond COVID-19 and the short-term uncertainty and volatility, there are some exceptional opportunities.

Firetrail COVID portfolio update April 2020
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Blake Henricks, Portfolio Manager and Deputy MD at Firetrail, provides his insights on the rapidly evolving COVID-19 situation, how Firetrail is positioning the portfolio and key changes during the quarter for the Firetrail Australian High Conviction

The big money is made in the waiting
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The big money is made in the waiting
If you could time the market and avoid the 10 worst performing days in the market over the past 30 years, what would your investment look like today?

Active is dead, long live active – The rise of passive
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Passive investing continues to grow in popularity. In the US alone, 50% of equities are invested via passive strategies. In this insight we discuss, what has driven the rise of passive investing and where are the risks?

Growth vs Value (Part 2) – Are value stocks at an inflection point?
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September 2019 saw Australian ‘value’ stocks stage a short and sharp recovery. In this article we explore the factors that could have triggered a reversal in the trend for value.

Buy Hold Sell: 5 high returning mid-caps
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Warren Buffett’s favourite metric is return on equity, or ROE, which gives investors a measure of how well a company’s management team is using its equity to generate value.

IPOs: ‘Forecasting the dream’
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In 2017, WeWork’s CEO said, somewhat emblematically: “Our valuation and size today are much more based on our energy and spirituality than on a multiple of revenue”.

Buy Hold Sell: 5 stocks in an upgrade cycle
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There is a special cluster of industrial mid-caps on the ASX that are perennial crowd-pleasers, stocks that under-promise and over-deliver every reporting season, forever in an upgrade cycle.

Firetrail awarded ‘Bronze’ rating from Morningstar
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The Firetrail Australian High Conviction Fund has been awarded a ‘Bronze’ Morningstar Analyst Rating.
Firetrail’s flagship strategy was one of only two new strategies to receive a medal rating from Morningstar in their 2019 Australian Equities Large Cap Review.

Firetrail Quarterly Update (Q3 2019)
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Firetrail Deputy Managing Director and Portfolio Manager, Blake Henricks, provides his views on the key themes driving the market over the quarter to September 2019 and how the Firetrail portfolio is positioned.

Growth vs Value – Is this the turning point?
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Since the end of 2016, the market has been in a strong growth cycle until now when rotation from growth to value stocks within the market has been fierce and rapid. Could this be the start of a value phase? In this insight we explore recent market performance and how to navigate changing market cycles.

Why uncomfortable opportunities are often the best investments | Pinnacle Summit 2019
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Firetrail Managing Director, Patrick Hodgens explains how Firetrail navigate uncertain equity markets and why uncomfortable opportunities are often the best investments.

Three reasons to own Downer Group
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Downer is an Australian listed company exposed to urban infrastructure service and employs more people than Commonwealth Bank, BHP or even Telstra. In this research article, we explain why we believe Downer is a high quality business, with an undemanding valuation and some of the catalysts that make it a high conviction investment.

The winners and losers of a more sustainable approach to plastics
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Demand for convenience has seen plastic use multiply and today plastics are fundamental to many aspects of daily life. In this article, we explore the future winners and losers to a more sustainable approach to plastics.

Firetrail Quarterly Update (Q2 2019)
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Firetrail Deputy Managing Director and Portfolio Manager, Blake Henricks, provides his views on the key themes driving the market in 2019 and how the Firetrail portfolio is positioned.

Why high conviction investing requires a long-term mindset
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At Firetrail, we believe that high quality, high conviction investment managers can outperform the index over the medium to long-term. Over the short-term however, even an investor with perfect foresight will have periods of underperformance.

Firetrail Quarterly Update (Q1 2019)
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Firetrail Deputy Managing Director and Portfolio Manager Blake Henricks provides his views on the key themes driving the market over the quarter to March 2019.

Three reasons Baby Bunting is booming
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Baby Bunting presents a rare opportunity to own a retailer that is growing sales and expanding margins. An unprecedented level of market consolidation in the Australian baby retail sector is allowing Baby Bunting to grow sales and profitability materially in a short space of time.

Hey Earnings, where’s my Cash?
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Making investment decisions involves looking at many aspects of a company’s financial position. One critical component is understanding a company’s cashflow. Recurring or deteriorating cashflow issues may be symptomatic of a broader issue in the business.

Why WorleyParsons is set to benefit from the oil and gas cycle
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After four years of underinvestment, the oil and gas cycle is turning positive. WorleyParsons is well positioned to benefit as the market leader in oil and gas engineering.

Firetrail Absolute Return Fund receives “Highly Recommended” rating from Zenith
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Patrick Hodgens, Managing Director at Firetrail, said the “Highly Recommended” rating from Zenith shows their high regard for Firetrail’s experienced team and deep fundamental research approach.

Firetrail Quarterly Update (Q4 2018)
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Firetrail Deputy Managing Director and Portfolio Manager Blake Henricks provides his views on the key themes driving the market over the quarter to December 2018.

Weathering the storm: An opportunity in Australian Insurance
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Losses from weather events are part and parcel of running an insurance business. While they introduce profit volatility and can have some flow-on impacts, we believe the major insurers are in a strong position to mitigate and offset these factors.

Our #1 stock pick for 2019
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Nufarm is an Australian company that specialises in chemical crop protection globally. It produces products to help farmers protect their crops against damage caused by weeds, pests and disease. There are two key reasons we believe Nufarm is one of the most compelling opportunities in the Australian equity market today.

Raw material inflation: Picking the winners and losers
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Costs are rising. Raw material inflation is coming through the supply-chain across industrial stocks. As a result, earnings pressures are emerging in many companies with exposure to raw materials.

Buy Hold Sell: 5 healthcare stocks under the microscrope
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Healthcare is often viewed as a good defensive place to invest because it is relatively insensitive to economic cycles. Over the past 12 months the healthcare index has outperformed the market by ~19% led by a stellar performance from heavyweight CSL.

Buy Hold Sell: 5 defensive stocks
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The selloff that started in early September has gathered pace to put the Australian share market into correction territory, wiping out 12 months’ worth of gains. With risks elevated, it’s time to look for defensive businesses that can grow their earnings regardless of the business cycle.

Diversifying your portfolio to weather market ‘down days’
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Rather than trying to anticipate the next market downturn, a far more prudent approach is to mix in a portfolio of uncorrelated assets that can weather different market environments.

Firetrail Quarterly Update (Q3 2018)
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Firetrail Deputy Managing Director and Portfolio Manager Blake Henricks provides his views on the key themes driving the market over the quarter to September 2018 as well as a portfolio outlook and new positions in the High Conviction strategy.

Two golden shorting rules
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Firetrail’s Portfolio Manager, James Miller outlines ways to obtain short exposure through managed funds in Australia, and also two of the golden rules that we follow at Firetrail when uncovering opportunities for stocks to short.

Three reasons shorting can benefit your investment returns
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Shorting opportunities are abundant – every year there are stocks that fall, despite the return of the overall market. By researching and identifying the catalysts for these stock declines, shorting can be a significant contributor to alpha in your portfolio.

Why the hurdle for M&A activity in Australia is getting higher
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The ACCC has renewed focus and power to block contentious M&A activity in the Australian market. Given the high level of concentration within Australian industries, we believe this focus is likely to result in the ACCC blocking more M&A.

Timing is everything
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Is timing the equity market a lucrative investment strategy? If you time it to perfection, the answer is certainly yes. However, in practice the information and skill required to time the market with the accuracy required to add value consistently is challenging at best.

Why technology is making or breaking companies
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Terms such as big data, artificial intelligence and machine learning are being used more frequently by companies around the globe. While many are talking technology, in our experience, the winners will continue to be focused management teams using data to drive shareholder returns.

Zenith Investment Partners: How advice practices benefit from early ratings on new funds
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Despite the recent formation of the business, Zenith has a high regard for Firetrail’s investment personnel and capabilities and believes the Fund is well placed to meet its investment objectives.

Why Steel Stocks are the Big Winners from Chinese Policy
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Steel making margins have almost tripled off the 2016 lows driven by China’s supply side reform policies. We strongly believe that the higher steel mill margins are sustainable and we see compelling investment opportunities in the steel sector.

Why M&A is set to boom in Australia
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The GFC was a decade ago. Since then, companies have focused on cost control and balance sheet repair to drive shareholder returns. From here on, we strongly believe that companies around Australia are set to embark on M&A to grow faster.

Why great companies aren’t always great investments
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A key aspect of our philosophy is that “every company has a price”. In our experience some of the best investment opportunities arise when a company is going through challenging times.