Three things that got the team talking this week - Firetrail Investments

Weekly insights from the Trail

Three things that got the team talking this week

August 30, 2024September 6th, 2024

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1. Tiers of telcos

We saw an interesting chart in the Optus result this week. They estimate 28% of mobile subscriptions are now Mobile Virtual Network Operators (MVNO)/Tier 2 brands, and growing quickly. We suspect this mix shift will be one of the things working against price increases from the Tier 1 brands given the significant gap between Tier 1 and Tier 2 pricing. $19 for Aldi Mobile versus $35 entry prices for Telstra/Optus is a big jump…

Source: Optus (August 2024)

Source: Optus (August 2024)

2. Results ranks

Our friends at Jarden have looked at the most common themes/terms being discussed in earnings call transcripts versus last year. Across the ASX200, in FY24 versus FY23, we have seen some interesting occurrences:

‘Revenue’ beats all
Despite the recent surge in freight costs, ‘Supply Chain’ and ‘Inflation’ are less of a discussion point
‘R&D’ and ‘Organic Growth’ appear a greater focus for management teams
From a capital management standpoint, there’s been a notable uplift in ‘Buyback’ discussions and,
‘Environmental Issues’ fell 11 spots while ‘Emissions’ dropped off the list completely!

ASX200 Earnings Call Word Mentions, Ranking and Change vs PCP

Source: Jarden (Data as of March 2024)

3. How the house stacks up

The focus on housing in the US continues. A softening consumer and weak US housing affordability have restricted activity. But US population growth has continued the demand growth. What happens when the rate cuts start…

Source: Macrobond, Macquarie Macro Strategy (August 2024)

Disclaimer

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.

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