Raymond Chan says when investing in equities, one of the most important considerations is the quality of management. Raymond says that strong leadership can inspire, unite and motivate a business to achieve goals that drive shareholder value over the years.
“Our Research Team has selected four companies we believe have excellent leaders behind them. They are Goodman (GMG), Endeavour Drinks (EDV), GQG Partners (GQG) and Corporate Travel (CTD),” Raymond said.
“Today I’d like to take about Goodman (GMG).
“As you know, Goodman is the global property group Goodman, specialising in Industrial Properties.
“GMG founder Greg Goodman has been riding through the GFC and is still its CEO.
“GMG is one of the ASX 20 companies, represents around 27% of the ASX A-REIT index and is one of the few offshore earners in the A-REIT space.
“GMG rarely screens cheap against domestic peers, but within the context of its offshore peers, it consistently delivers higher returns at lower levels of leverage and at a comparable price-to-book ratio.
“We’re attracted to GMG’s Fund Management Model with funds under management (FUM) now over $80 billion.
“The development pipeline is very healthy given structural tailwinds in e-commerce and more recently artificial intelligence (AI).
“We think A$7 billion completions a year is likely sustainable.
“With continued increases in interest rates and persistent inflation (most notably construction costs), we admit the risks on the REIT sector.
“However, we think GMG’s active manager model and strong balance sheet can add value from an active buy, build, manage strategy and develop long-term shareholder value,” Raymond said.
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