AUDUSD
AUDUSD pulled back after the RBA’s rate hike — most Asian currency pairs have pulled back as a result. We tend to be long USD pairs — the USD wrecking ball continues…
Melbourne Cup > Macquarie’s tips served us well — Without a Fight came in first place. Bigger question is — how much Moët was sold on the day, and how many frocks did Trelise Cooper sell?
US
Uber > climbed 3.7% after reporting 25% in overall trips growth for the three months through September and income from operations of $US394mn. We still think the company is a litigation risk — their co and Lyft recently agreed to pay ~$300mn after withholding wages from drivers. Link.
Airbnb > Italian courts seized €779m from the company after alleging tax evasion. It’s kind of a reckoning for Silicon Valley’s unicorns — Uber, Airbnb etc — as the law (finally) catches up to companies predicated on avoiding traditional regulations (in Uber’s case, it was labour laws and treating drivers as contractors; in Airbnb’s it was a game of cat-and-mouse with local authorities over what classifies as a hotel, etc. Microsoft had similar regulator scrutiny in the 90s (who can forget Gate’s classic deposition footage — well worth a watch. Link. ) We’re buy rated on rival Booking.com while we prefer to avoid Uber stock.
NZ/AUS
Sky > rejected a non-binding offer from its mystery suitor after declaring the offer materially undervalued the business. AGM is today. It’s been a bit of a game of “guess who?” with who the suitor could be — still in the dark on this. We’re not fans of the stock — melting ice-cube. They introduced a new Sky Box and a Sky Pod — it’s giving 1996 vibes — wondering if we should go to Video Ezy and rent out a VHS of Happy Gilmore too (sarcasm, of course — but who is rolling out boxes in the age of streaming?) Sky actually makes money — $51mn of NPAT on the back of $754mn in revs, but in our view it’s only “moat” is the sports rights they own — otherwise, they are a small minnow competing against WBD/DIS/NFLX etc.
Vulcan > $145mn of operating cash flow, 21% return on capital employed (we like a company that puts that metric early on in their presentation — as Munger says, it’s really the only metric that matters in the long run). Tougher macro environment means they’re guiding down 9% in revs and 29% in EBITDA — shouldn’t be much of surprise given Fletcher’s results, etc. Trading at $7.49 as of writing — we don’t have formal coverage on this but we like management and think it may be good buying in this range.
Westpac > leaving PwC as its auditor, jilted at the alter…the auditor continues to be embattled in Australia after a series of scandals.
Dexus > telling investors in their Wholesale Property Fund they will have to wait 12 months for any redemption requests. Property isn’t looking good…
Also noting Ben Cook is looking to sell his massive Bunnings (link) — he paid about $58mn for it in 2021. Bunnings buildings are in hot demand — should sell quickly. Predictable yield, “rockstar” tenant.
China property > going down, down, down…food for thought
