Our company experts Michael Fahy and Julian Hofmann begin by sharing their thoughts on recent results from Melrose and Dowlais. What effect has the RTX engine recall had on Melrose? And should Dowlais be concerned about the possibility of strikes in the US?
Next up is our latest cover feature on the cost of capital, by James Norrington. He gives an overview of the feature and discusses the two schools of thought central to the piece; crowding out and crowding in. 
Last on the agenda is the topic of high-yielding funds. Leonora Walters highlights the problems that arise when investors rely solely on yields, but what are some of the other checks that can be done to secure a resilient payer? 

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The Companies and Markets Show: Melrose, Dowlais and the cost of capital

Looking for help with your Isa or pension? Or just plain confused by the stock market? Each week, Investors' Chronicle picks apart the latest news for companies, markets and funds, and brings you fresh investment ideas. Subscribe for these, along with interviews with professional investors and special in-depth discussions on big market themes.

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News & Politics

News

On the day of the announcement mining giant BHP offered a whopping £31bn for Anglo American, Mark Robinson runs us through the thinking behind the deal, the impact South Africa’s upcoming election may have on Anglo’s assets, and whether this is just the beginning of negotiations.
Jemma Slingo takes the hot seat to discuss this week’s cover feature, hopefully, a comfort for many listeners: investors’ biggest mistakes. Jemma shares a few examples from fund managers interviewed, what they have learnt from their mistakes, the behavioural science behind them and more. 
Last but not least, Julian Hofmann discusses the biggest estate agent Property Franchise Group (TPFG) which recently completed a takeover of smaller realtor Belvoir. It’s now the biggest real estate agent in the country in terms of its multitude of locations thanks to its franchise model, but is it a quality business in the cyclical sector?
Timestamps 1:08 BHP’s big for Anglo American 13:56 Investors’ biggest mistakes 25:01 Property Franchise Group
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BHP’s bid for Anglo & investors’ biggest mistakes: The Companies and Markets Show

We begin this week's episode with a rundown of industrial metal price movements. From copper’s boom, Russian sanctions and the price of gold, our commodities correspondent Alex Hamer reveals what investors need to know on all things metal.
A change in fate has swept across one of the UK’s most well-known and loved funds: Fundsmith Equity. It has not beaten its benchmark for the past three years, bringing a concerning end to its long run as a high-growth fund. Dave Baxter talks about the shifts in the portfolio over the past decade, analyst criticism, Terry Smith’s response and more of what readers can expect from this week’s cover feature.
Last but not least, our senior companies reporter Jennifer Johnson unpacks our result of the week: Asos (ASC). The fast fashion retailer released interim results which show the outlook is still underwhelming. Its plan to reduce unsold merchandise panned out but resulted in falling margins. Is there any hope for the company and those holding it in their portfolio? 
Associate editor Alex Newman and companies editor Mark Robinson also join the conversation to share their take on the latest market news.
1:30 Industrial metals  11:51 Fundsmith equity  22:35 Asos (ASC) 
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Fundsmith’s fate, industrial metals, & Asos: The Companies and Markets Show

We begin with Julian Hofmann, whose latest article covers the companies left behind as doom and gloom takes hold of the British market. Many investors have been turning their noses up at British stocks but Julian says there is still value to be found. He touches on some of these, such as furniture brand DFS, and how investors can calculate a share’s value. 
Next is Jemma Slingo who reports on the world’s leading thread manufacturer and British heritage brand Coats. The company recently released full-year results which show it’s making great progress internally, which can be attributed in a large amount to its production move from the US to Mexico. Jemma explores the progress of the company in the wider market and its current value case. 
Carrying on the theme of 18th-century British businesses, Mark Robinson joins to discuss ceramics company Churchill China. Mark and Dan discuss how the company is recovering from the pandemic and lockdowns that halted the hospitality industry, its main source of revenue.
Timestamps 1:17 British bargains 13:59 Coats 22:36 Churchill China

 
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British bargains & heritage brands: The Companies and Markets Show

Joe Bauernfreund and value investing are nearly synonymous. The veteran manager runs the AVI Global Trust and AVI Japan Opportunity Trust, and has responsibility for all AVI’s investment decisions as the CEO and CIO. His £1bn global stocks fund scours the world for the best companies but whose shares stand at a discount to the value of their underlying assets.
In this podcast, funds editor Dave Baxter and Bauernfreund unpack his extreme value investment process, how Japanese valuations have changed, how to avoid value traps and more. 
This episode was recorded on 27 March. 
Timestamps 1:02 The investment process of the fund 2:34 Activist investing 4:27 Hipgnosis (HSF) 5:23 Baunerfreund’s take on investment trusts 7:07 Recovery in the trust space 11:00 The resilience of certain sectors 12:38 Private Equity  16:58 The era of higher rates  18:32 The Japanese market 21:04 Competition in the space 22:32 Interesting sectors or themes in Japan 23:33 Other nations the fund is gravitated towards 25:28 Emerging markets  27:26 The reasons to exit a position and selling Pershing Square   Hosted on Acast. See acast.com/privacy for more information.

‘It’s exciting in the investment trust sphere': Joe Bauernfreund of AVI

We begin with one of the biggest names in the EV game: Tesla (TSLA). Shares are down by a third this year and Mark Robinson discusses what has caused this slump. Competition from China’s BYD certainly poses a threat but diminishing trust and popularity are also at play.
Next, the author of our cover feature this week, Christopher Akers, shares his thinking behind the piece The travel stocks making the most of the recovery. Many companies are reporting record trading, an interesting occurrence given rising rates, an economic downturn and what was a catastrophic pandemic. Dan and Chris discuss the bargain valuations available for investors and whether the rebound can continue.
Last but not least, Hermione Taylor unpacks her article on investing while interest rates are being cut. She dives into what history tells us about stock market performance in a rate cut cycle, current forecasts and how investors can benefit over the coming months.
More on Tesla Will the Magnificent Seven go down to six? Meet the new electric vehicle top dog
1:16 Tesla (TSLA) 12:53 The travel stocks making the most of the recovery 23:09 Investing at a time of interest rate cuts

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The Companies and Markets Show: Melrose, Dowlais and the cost of capital

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