Skip to main content

1. An apple a day…

Flu season has well and truly hit Australia, and the Firetrail team! With all the heavy breathing in the office this week, we thought it was time for an update on ResMed, one of the highest conviction positions in the Australian High Conviction Fund.

The UBS chart below shows app user numbers for ResMed and their major competitor Philips. We think this is a good indicator of the share they’re taking as Philips devices remain out of the market post their recall of 5.5 million devices in June 2021.

The latest FDA update highlighted that the number of repaired/replaced devices shipped to consumers in the US was much lower than the 2.5 million posted on the Philips website, which counted devices shipped internally at the company as well. We believe this recall could continue to impact Philips for years to come, as they also have an impending Consent Decree to deal with, with more details expected on that in the next 6 months.

Source: UBS Evidence Lab, Sensor Tower
Companies mentioned are illustrative only and not a recommendation to buy or sell any particular security.

2. Spotlight on the consumer…

The consumer sector was topical this week after Universal Store collapsed 24% following their disappointing trading update. The youth apparel retailer said young customers are facing serious pressure from rising rents and university fees. Meanwhile Abercrombie was up 30% after reporting their highest 1Q sales in a decade. But whilst sales in the namesake brand rose, sales at Hollister, which caters to a younger shopper, declined.

The JP Morgan investor day had some interesting data highlighting that consumer deposit balances and cash buffers are still sitting above pre pandemic levels. But retailer results remain a telling indicator.

And we are keeping a close watch on the fixed rate loan expiry levels in Australia. June is set to be a critical month.

Source: JP Morgan

Source: CBA

3. On the road again…

The Firetrail team have been everywhere, man! This week they’ve been to the Netherlands, Indonesia, Boston, Jacksonville, Houston, Tomago and Maryborough. See a roundup of their insights, and selfies, below.

Annabel Riggs, analyst in the S3 Global Opportunities Fund, caught up with the Indonesian microfinance bank, BTPS. Spot her in the middle of the customer group below. She also saw how their fortnightly customer collection group meetings worked. Cash is pledged by the group, with repayments counted manually. They use an iPad now, but up until 2018 it was all on paper!

Annabel and the BTPS customers

James Miller, PM on the S3 Global Opportunities Fund, has continued his exploits across the US. This week he met with the head of carbon development at Weyerhaeuser (the one from that WSJ article). Weyerhaeuser have now completed the exercise of mapping all their forests, and how to best manage them – i.e. choosing between pure timber, timber + carbon, carbon, solar/wind, or real estate. When they assess a use, they value it on a 100-year timeframe.

He also caught up with the CEO of Rayonier and learnt about their tree school!

Jimmy visiting Weyerhaeuser

Jimmy at Rayonier’s tree school!

Carta Ryan, analyst in the Small Companies Fund, helped fly the (small) plane that got her to Maryborough to visit some farms owned by Rural Funds Group. Their TRG leased Macadamia development is on track covering 3,000 hectares. They also demonstrated their efficient cotton growing methods that allow them to extract above 20 bales of cotton per hectare, compared to other methods which extract 12 bales per hectare.

Alex Collen, analyst in the High Conviction Fund, headed up to Tomago to see Westrac’s facility for read throughs on the mining sector, and construction in the infrastructure space. A fun fact we learnt from Alex was that the 320-tonne haul truck you can see him ‘driving’ below has sensors which monitor your blinking. If you blink for >2 seconds, the seat vibrates, and the control tower calls you to make sure you’re not sleeping!


This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

Links to the Product Disclosure Statement: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

Links to the Target Market Determination: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

For historic TMD’s please contact Pinnacle client service Phone 1300 010 311 or Email

This communication is for general information only. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice before doing so. Past performance is for illustrative purposes only and is not indicative of future performance.

Whilst Firetrail, PFSL and Pinnacle believe the information contained in this communication is reliable, no warranty is given as to its accuracy, reliability or completeness and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Firetrail, PFSL and Pinnacle disclaim all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information. This disclaimer extends to any entity that may distribute this communication.

Any opinions and forecasts reflect the judgment and assumptions of Firetrail and its representatives on the basis of information available as at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future.

Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this communication is prohibited without obtaining prior written permission from Firetrail. Pinnacle and its associates may have interests in financial products and may receive fees from companies referred to during this communication.

This may contain the trade names or trademarks of various third parties, and if so, any such use is solely for illustrative purposes only. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with, endorsement by, or association of any kind between them and Firetrail.