Skaffold CEO Peter Simson said Mr Clisby’s appointment will drive the next phase of Skaffold’s distribution strategy.

Skaffold has already proven itself as a successful research tool for DIY investors. Financial planners are an increasing segment of Skaffold’s membership base.

“Client case studies highlight how Skaffold allows advisers to serve client needs for equity-market investing,” Mr Simson said.

Mr Jason Smith of Godfrey Pembroke Canberra said, “When assessing listed securities our first step is always Skaffold. Skaffold allows us to focus on stocks more likely to benefit our clients, avoid those that won’t and block out the daily noise. Clients win with better recommendations. Advisers like us win via happier clients and significant research time savings.”

Mr Clisby’s appointment coincides with the pending release of Skaffold’s new mobile application.

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Chris Batchelor

Stock research application house, Skaffold, has said that the long-standing faith in stalwart shares may at last be on the wane with advisers.  According to analysis of the latest user data, financial advisers are no longer focusing mainly on traditional mining and banking stocks and are instead looking at service industries.

The research behavior of more than 100 advisers has been analysed over the past 11 months.  In April 2013, banks and resources formed the top seven out of the top ten researched stocks.  In March 2014, services formed the top four stocks and five of the top ten. Just one financial stock (ANZ) and one energy stock (Titan Energy Services) were included in the top ten most researched shares.

General Manager of Skaffold, Chris Batchelor, said Australian investors have relied upon these industries for growth.  However, this change in behavior with advisers signals that Australian investors are looking further afield, reflecting an increased level of sophistication.

“Banks and miners have been the core of Australians share portfolios for many years.  However, with many analysts now saying the mining boom is over and that banking growth is likely to be flat, it’s pleasing to see that advisers are getting more diversified in their stock research.

Highlights of the research include:

• 46% of stocks evaluated are in the Services sector
• 20% in the Technology sector
• 12% in healthcare
• 10% of views were CBA and ANZ

Mr Batchelor said none of the top 20 researched stocks by advisors were in the Basic Materials (resources) sector, whereas eleven months earlier Resources and Oil and Gas made up 20% of the top 20 most viewed stocks, with BHP the number one viewed stock by a considerable margin.

There were less changes evident among the advisers looking at international shares. In the US market Apple, which was previously the most viewed stock by Australian advisers on the US market dropped one place number two and Microsoft suffered a similar fate dropping one place from second most viewed to third most viewed. Resmed, the seep apnea specialist founded by Australian Peter Farrell was the most viewed US stock but technology stocks remain the largest represented sector in the US top 20.

Mr Batchelor said usage of Skaffold by advisers was also on the rise, with a 20% growth in adviser use.

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Chris Batchelor

Stock research application house, Skaffold, has warned investors to remain cautious and stay focused on value, when considering IPOs.  According to Skaffold, Investors who believed the 2013 resurgence of IPOs would deliver them above-average returns for their portfolios have received a rude awakening.

CEO of Skaffold, Chris Batchelor, said Skaffold had run the ruler over 29 of the new listings in 2013 and only four have achieved its highest ratings of A1 and A2.   These are Nine Entertainment, the online foreign exchange group Ozforex, Sino Australia, providing oil recovery services for companies operating in China and the listed law firm Shine Corporate.

“Although 2014 is shaping up to be another huge year for IPOs, investor appetite for them has been given an overdue reality check. Many of 2013’s IPO stocks have underperformed for various reasons, none the least being they were overpriced and over spruiked companies in uninspiring sectors. Our opinion is that most IPOs have been best left alone”, he said.

Adding to growing investor skepticism for floats were recent warnings by the Australian Securities and Investment Commission (ASIC) over the quality of some offerings. The regulator found that around a third of float prospectuses misled investors

Mr Batchelor said of the four stocks that get the Skaffold tick of approval, Oxforex and Nine are trading well above value at around 50%, and Shine is trading at an 8% premium.

“Although Sino is trading at a discount, there aren’t any analysts providing forecasts so its value is based upon past performance. All four companies will release their latest results in February.”

Mr Batchelor said that Lifehealthcare Group, a distributor of medical devices that listed in early December, was an interesting stock.

“Like many IPO’s this is a new, largely unresearched stock and therefore, difficult to measure accurately.  However, by our methodology it is rated B2 and its value is forecast to rise around 30% a year over the next two years. Although the company does have a large amount of debt, at its last report there was enough cash in the bank to cover its interest bill three times.

Among other companies rated by Skaffold, the online labor marketplace group Freelancer.com is rated C3, Virtus Health (the first IVF business in the world to become a listed company) is rated B4, and iSelect, offering an online comparison service for a range of services, is rated A4.

Although there had been some good success stories in 2013, Bloomberg data reveals that just under half of the 40-odd companies that listed on the ASX in 2013 are trading at share prices lower than their float price.

“This should warn value investors, and newcomers to shares alike, that buying into floats for ‘stag’ profits is a risky strategy.

“Unsurprisingly, with institutional investor appetite for floats also becoming a little jaded, several IPOs have been cancelled. Mine-site logistics business, Bis Industries, recently pulled its $1 billion-plus float amid unfavourable sentiment over new project numbers at decade lows.

Mr Batchelor cited four steps for reviewing IPOs and prospectus documents:

1. Stick to your value investing principals

Look for companies with consistently above-average return on equity (ROE), with little debt and not too much goodwill on the balance sheet. On the flipside, steer clear of buying into floats where the net tangible assets (NTA) or net worth (pre-IPO) is negative.

2. In whose best interests?

Think carefully about buying into a float where the people responsible for turning the company around are planning to exit relatively quickly.

3. Focus on the fundamentals

As a value investor, you should be more interested in investing in an IPO for the long term than selling immediately for a quick profit.

4. Do your homework

It’s equally important to investigate previous financial statements of companies planning to float and find out whether the money raised is being earmarked to fund expansion or repay debt, and the amount to be paid to existing owners.

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Skaffold survey points to a positive 2014.

Australian investors believe the local market will rise over the next 12 months, according to a recent survey of more than 200 investors from stock research application house, Skaffold.

However, just one third see Australia as offering the best growth opportunities in the coming 12 months. Thirty three percent of respondents to the survey nominated Australia as the providing the best growth opportunities ahead of the US (30%) and Europe (16.0%). But when combining the total views on where the best growth will emerge, 67% nominated regions outside of Australia.

Skaffold CEO Chris Batchelor, said however, that the home bias of Australian investors remains. “70 percent of respondents are tipping the ASX to rise over the next twelve months, reflecting a bullish attitude to the local bourse. This is also mirrored by stock buying intentions, with the great majority (84%) planning to increase or maintain their current exposure to the ASX.

“Looking offshore, more than two thirds of respondents (69%) said they intended to maintain current exposures to offshore markets. More than one quarter (26%) said they would increase exposure and only five percent said they would decrease their offshore holdings.”

Mr Batchelor said investors who are using Skaffold are reporting stronger investment returns and that the findings had implications for investors and their advisers.

“The vast majority of respondents who currently use Skaffold say their portfolio has improved since they starting use our software. These investors have their superannuation heavily invested in shares and few are using an adviser or broker to help them with their stock decisions. But of those who do use and adviser, just 11 percent say they are dissatisfied with the service they receive.

“We think this shows a clear opportunity for advisers to engage with investors on stock selection decisions. The Skaffold platform is highly compatible with investors who use advisors, or, more accurately, we believe it adds to the investor/advisor relationship by providing another pillar to the relationship, one that is built on research and rigour.”

Of the respondents who currently use Skaffold, 84 percent reported an improvement in their investment portfolio since using Skaffold. 54 percent of respondents said they don’t use a financial adviser or full service broker, and more than 75 percent have between 50-100 percent of their portfolio invested in direct shares.

About the survey:

• All were participants in a Skaffold webinar conducted at the end of October 2013

• 51% were Skaffold members – 49% were not members of Skaffold

• 54% did not use the services of a financial advisor or full service broker

• 89% of those who did use an advisor or full service broker were ‘very satisfied’ or ‘adequately satisfied’ with the service provided.

• 84% of Skaffold members said their investment portfolio had improved since using Skaffold – 16% said it had not.

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Top 5 for share growth.

The top five stocks identified by online stock research application company, Skaffold, have achieved a stand-out performance over the past nine months, delivering a return of 28.3%.

In comparison, during the same period, the Australian Stock Exchange’s All Ordinaries Accumulation Index achieved a return of 15.5%.

Including capital growth and dividends, $50,000 invested equally in Cedar Wood Properties (CWP), Clough (CLO), Decmil Group (DCG), Flight Centre (FLT) and Mastermyne (MYE), between 11 January 2013 and close of trading on 23 September 2013, would have returned $64,147.  With the addition of franking credits, this represents an investment return of 29.7%.

Skaffold is a state-of-the-art online stock research application that interprets key financials and forecasts into image-rich visuals. The automated application is updated daily using information sourced from top-tier financial institutions. Launched in November 2011 by fund manager, Roger Montgomery, portfolio manager Russell Muldoon, general manager Chris Batchelor CFA, and marketer Vanessa Gilbert, Skaffold is designed to help simplify the share market investing process by enabling users to spend less time on research and market analysis.

Chris Batchelor said finding value in the market was a difficult this year, but the stock research application identifed five top performing stocks for 2013.

“During the past nine months, three of our top stocks have seen their share price rise while two have declined. The stellar performer was Flight Centre, which rose by 71 percent, closely followed by Cedar Wood Properties (up 54 percent) and Clough, which increased 46 percent. In comparison, Decmil Group saw its share price fall by 12 percent and Mastermyne’s decreased by 34 percent.”

Using the ‘Skaffold Score’ rating system, combined with Skaffold’s analyses of each company’s intrinsic value, future forecast value growth, forecast yield, future earnings per share and the highest return on equity, Flight Centre was originally rated A1, with Cedar Wood Properties, Decmil Group, Clough, and Mastermyne all rated A2.

“Based on the 2013 full financial year results, Flight Centre has retained its premium A1 rating, while Cedar Wood Properties and Decmil Group have been adjusted down from A2 to A3. Clough and Mastermyne have remained stable at A2.”

Mr Batchelor said identifying value in current markets is increasingly difficult, but Skaffold regularly received feedback that the tool was helping its clients reach their financial goals.

“I joined Skaffold in November 2011 to help manage my investment portfolio as part of my Self-Managed Superannuation Fund,” said Lindsay Brynes, one of Skaffold’s Founding Members. “I find Skaffold complements the excellent support I get from my full service broker as it allows me to identify opportunities outside of their research scope.

“A good example of this is M2 Telecommunications and Flight Centre. I purchased these shares when they were between 20 to 30 percent below their intrinsic value just over two years ago. Since then they have added $60,000 in value excluding the fully franked dividends.  I continue to hold Flight Centre today because the shares have doubled in value since I first purchased them.

“This doesn’t mean I only look at companies that are below or around their intrinsic value. Rather, by using Skaffold, I can more critically analyse broker blended valuations to justify their inclusion in my portfolio,” said Mr Byrne.

“Skaffold’s integrity in the calculation of intrinsic value is very helpful in acting as a tool to support my investing decisions with the benefit of consensus forecasts.”

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SMSFs looking to offshore investments.

SMSF Trustees, who now control the single largest pool of superannuation assets in Australia, are increasingly utilising advanced stock research tool Skaffold to plan for and manage their retirement portfolio, according to new data from Skaffold members. Additionally, they are more likely to seek information about offshore stocks than other investors.

Skaffold General Manager, Chris Batchelor said more than 35% of Skaffold members have indicated they have an SMSF and that they use Skaffold as a primary tool to make stock investment decisions both in the Australian market and via international bourses.

“SMSF trustees are the fastest growing sector of the Skaffold client bases,” he said.

“As a rule SMSF investors tend to be active investors and at the forefront of seeking out tools to assist with their investment decisions.

“It is estimated that on average, SMSFs now have 45 percent of assets in direct shares, up from around 35 percent in 2007. This compares with non-SMSF investors who typically hold less in direct shares, due in part to holdings in managed products

“Additionally, Skaffold members with SMSFs are three times more likely research stocks in offshore exchanges than members without an SMSF, as indicated by the take up of Skaffold’s Global product.”

SKaffold Global provides analyses of stocks on exchanges in the US, UK, Europe, Hong Kong, Canada, Switzerland and Singapore. SMSF investors are around three times more likely to subscribe to the global service than non-SMSF investors.

“We would expect SMSF interest in offshore markets to continue on an upward trend, as data out of major international economies show improvement. There’s also likely to be slipstream effect with non-SMSF investors following suit,” said Mr Batchelor.

Skaffold also revealed that Flight Centre (FLT) remains the top stock of members with SMSF. FLT featured prominently in the financial press recently, announcing a 23% increase in net profit and 28% increase dividend over the same period last year, with the shares closing on a record high of $48.41 on the day of the announcement (27/8/13).

Interestingly there was a high degree of agreement between members with SMSFs and those without when it came to Top 10 ‘Liked’ Stocks by the respective groups. Both had the same six stocks on the top of their ‘Liked’ list, namely:

• Flight Centre (FLT),
• Cedar Woods Properties (CWP),
• Forge (FGE),
• JB Hi Fi (JBH),
• Cordan (CDA), and
• ARB Corp (ARP).

Leighton (LEI) and Newcrest Mining (NCM) were the two stocks common to both groups ‘Top 10 Most Disliked Stocks’.

There was also consistency in the most popular overseas markets by both groups with the USA and Hong Kong rated #1 and #2 respectively by both groups.

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And while more than half definitely want to increase their investment into international stocks, an inability to research individual stocks and a lack of knowledge about other markets is holding them back.

Launched by a group of stock selection specialists including Roger Montgomery, Russell Muldoon and Chris Batchelor, Skaffold is a time-saving online stock research application. Since 2011 the application has covered every ASX listed stock, but has now been expanded to include another 2000 companies listed on nine of the major global exchanges.

Skaffold General Manager, Chris Batchelor, said demand for access to quality research on global shares was on the increase.  But that stock research needed to be cost-effective and easy to use if it was to serve its purpose.

“When designing Skaffold, we wanted to ensure it was easy to use for investors of every level, that’s why we have built it with gaming design and technology in mind.    Since our launch last year, we have witnessed strong demand from investors who are making stock selection decisions for themselves or their clients.  This includes SMSF investors, financial advisers, private as well as institutional investors,” he said. 

“The investors we have talked with recently believe that international markets will present the best investment opportunity in the coming 12 months, so we believe our new Global product will see strong uptake levels. ” 

Skaffold asked more than 100 active investors of their views and intentions with international investment markets.  

The survey found that 50.4% are looking to increase their investments in international shares. 43.4% were undecided, signaling that this figure could rise. 

The research also found that 45.6% believe global markets will offer the best growth opportunities over the next 12 months, compared to just 9% who believe that the ASX will outperform. And over two thirds – or 68.1% – believe the US market will offer the best international opportunity.

In terms of the most attractive features of international markets, 63.2% rated ‘All of the above’ naming access to; a great range of stocks (18.9%), the US (8.5%), other asset classes including technology (5.7%) and emerging markets (3.8%), as the key attractors of offshore markets.

In terms of their hesitations, the most commonly cited reason was the inability to access research on individual stocks (20.9%). Other factors included lack of knowledge, currency risk and the absence of franking credits.

“With Skaffold Global, active investors can now access key financial data and forecast information on global giants Apple, Google, General Electric, Chevron, Procter & Gamble, Singapore Airlines and even Facebook if they so wish.”

“We think also that the well documented growth of self-managed super funds (SMSF), will increase demand for access to an affordable, easy to use tools to help investors identify stocks that fit their investment profile.”

More than 50% of those surveyed already hold global stocks either as direct equities (25%) or via a managed fund (28.7%).  Almost 45% of those with exposure hold the equities in their SMSF and 31% hold the shares in their personal name.

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