Those interested in managerial ownership and firm value may be interested in a study by Morck, Shleifer, Vishny. The abstract is below, but in summary, firm value increases as management ownership, and therefore alignment, increases from 0% to 5%. As ownership increases form 5% to 25% management entrenchment reduces firm value. Finally above 25% the alignment effect reasserts and firm value increases. It would be interesting to see any difference in how ownership was achieved, i.e. founders vs option thieves.

The convergence-of-interest hypothesis suggests that a firm’s market valuation should rise …

Posts are going to be few and far between over the next eight weeks as I juggle the business end of my Masters, our US and Australian portfolios and my kids. Sorry darling, you’re going to have to fend yourself  and if you thought I lacked empathy before, well I’ve just dug a trench to set the bar lower.
I’m analyzing ANZ Bank Group Ltd (ANZ.AX) for a risk management assignment and thought I’d post a couple of the graphs I’ve put together. As always click the graphs to enlarge.
This first graph highlights what a slam dunk no-brainer …

Non-dilutive funding grant awarded by BARDA for development of Inavir is a game changer for Biota and substantially de-risks the company. The funding places a higher floor under Biota’s value and increases the probability of high value eventuating. Although Inavir will not be commercialised for 5-6 years, the contract is cost plus, royalties will continue from Inavir in Japan and Relenza world wide and the rest of Biota’s pipeline continues to progress. Good management could unlock substantial value for shareholders in the years ahead.

Musing on the market and specific shares. Including Advanced Share Registry, Anteo Diagnostics, Prana Biotech, Biota Holdings, Pfizer, Biogen, 3M and Catch the Wind

Oplink Communications (OPLK) is worth keeping a close eye on right now as it has been crushed on sector concerns, notably Finisar’s earnings warning. Oplink closed Thursday at $21.51 down 27% from the recent high.

PEG of 0.44
$168M in cash and equivalents is 40% of their $428M market cap, with no debt.

It’s not hard to find a good LIC which consistently beats the market and trades and a discount to NAV.

M2 Telecommunications are firing on all cylinders and with both the NBN most likely to assist their profitability and further clever acquisitions their future looks bright.

Peter Lynch and then Warren Buffett famously said,  buy into a business that’s doing so well an idiot could run it, because sooner or later, one will. That quote is often incorrectly taken to imply that management doesn’t matter. Anyone reading Buffett’s latest annual letter to shareholders should be left with no doubt that management is vitally important to Buffett. He views the integrity and talent of his executives as one of the keys to his success.
That brings me to Vaughn Bowen and team at M2 Telecommunications (MTU.AX). M2 is the leader in network independent telecommunications in …

After today’s announcement that Bang Laboratories has launched a second product using Anteo’s Mix&Go it costs 30% more to get in the Anteo Diagnostics game. That’s a shame for me, as after I spent most of yesterday researching the Mix&Go product, management and the diagnostics industry, I’d decided to buy a starting position.

Amcom is an Australian telecommunications company which supplies dedicated fibre optic networks to business and government for data, internet, voice and related services. Amcom also has a 23% ownership of iiNet, Australia’s number two ISP.
Over the last four years Amcom has put up some impressive growth. Revenue has grown 15% annually and thanks to expanding margins earnings have grown at an impressive 21%. The consensus view in the market is that increased competition from Telstra and the roll-out of the NBN will have a negative impact on both Amcom and their holding in iiNet. Consequently despite management forecasting another year …