JonDent - Explorations in Electronics, Electronic Music, Coffee, Sci Fi, Art & Travel (but mostly electronic music)
Thursday, 30 January 2025
WES : Wesfarmers
WES wesfarmers
30/6/26
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Over the last five years, Wesfarmers (ASX:WES) has maintained exceptional financial health, characterized by steady profit growth, strong return on equity (ROE), and robust market performance. The company’s Return on Equity (ROE) has consistently hovered between (30%) and (36%), significantly outperforming industry averages.
5-Year Financial & Operational Highlights
- Profit Growth: Net profit after tax (NPAT) has grown consistently. The company reported full-year NPAT of ($2.93) billion in FY 2025 and an even stronger 1H FY 2026 net income of ($1.60) billion (a (9.3%) increase on the prior corresponding period). [1, 2, 3, 4, 5]
- Return on Equity (ROE): Driven by disciplined capital allocation across its diverse retail and industrial portfolio, WES recorded an impressive ROE of approximately (30%) in FY 2024 and expanded further to a range of (33%) to (36%) over the trailing twelve months. [1, 2, 3, 4]
- Debt & Leverage: The company’s debt-to-equity ratio has averaged around (128%) to (131%). While this indicates a leveraged balance sheet, it is typical for mature conglomerates. Wesfarmers has successfully managed this with stable operating cash flows and strong interest coverage.
- Dividends: A reliable income generator. Slowly growing over the last 6 years. WES shares have maintained strong, fully-franked distributions, with a 5-year average dividend yield near (3.4%).
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Wednesday, 29 January 2025
CBA
CBA Commonwealth Bank
04/07/26
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ASX:CBA has delivered stellar long-term total returns, buoyed by strong profitability. However, premium valuations have faced recent headwinds. [1, 2, 3]
Over the last 10 years, CBA’s key financial milestones include:
- Profitability & Revenue: CBA’s net profit has climbed significantly over the decade, consistently hovering between A$9 billion and A$10 billion annually in recent years. [1]
- Return on Equity (ROE): CBA maintains an excellent banking sector ROE. Historically, it has reliably averaged between 13% and 14%. [1, 2, 3]
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A bank's interest-earning assets are the financial instruments on its balance sheet that generate income through interest, making them the primary engine of a bank's core revenue.
The most common types of interest-earning assets include:
- Customer Loans: These are the largest source of interest income and include mortgages, personal loans, credit card balances, and commercial/business loans. [1, 2, 3, 4, 5]
- Investment Securities: Banks invest a portion of their funds in interest-bearing securities like government bonds (e.g., U.S. Treasuries, Australian Government Bonds), corporate debt, and mortgage-backed securities. [1, 2, 3]
- Interbank Loans: Money lent overnight or for short terms to other financial institutions (often referred to as federal funds sold or reverse repurchase agreements). [1, 2]
- Deposits at Central Banks: Cash reserves and balances held at central banking institutions (like the Reserve Bank of Australia or the Federal Reserve) that yield interest. [1, 2]
The profit generated from these assets is called Net Interest Income, which is calculated as the difference between the interest earned on these assets and the interest paid out to depositors on interest-bearing liabilities.
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- Debt: As a retail and commercial bank, CBA carries high raw liabilities (over A$200 billion in wholesale/debt securities), but maintains very healthy Tier 1 capital ratios heavily scrutinized by the Australian Prudential Regulation Authority (APRA). [1]
- Share Price Growth: Despite a recent double-digit pullback caused by shifting federal budgets and geopolitical/lending uncertainties, long-term investors have more than doubled their capital over the decade, including a share price that has sat well above the A$150 mark. [1, 2, 3]
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dividends
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AYLD - covered call ETF
AYLD - GLOBAL X S&P/ASX 200 COVERED CALL COMPLEX ETF
Quarterly distributions
Only partial franking - so use in super
9.9% - 07/07/26
Mainly Australian stocks
| BHP | BHP Group Ltd | 12.07% |
|---|---|---|
| CBA | Commonwealth Bank of Australia | 10.54% |
| WBC | Westpac Banking Corp | 4.70% |
| NAB | National Australia Bank Ltd | 4.37% |
| ANZ | ANZ Group Holdings Ltd | 4.05% |
| Code | Company | Asset |
|---|---|---|
| WES | Wesfarmers Ltd | 3.46% |
| MQG | Macquarie Group Ltd | 3.23% |
| RIO | Rio Tinto Ltd | 2.63% |
| GMG | Goodman Group | 2.47% |
| TLS | Telstra Group Ltd | 2.24% |
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covered call
Covered call ETFs are investment funds that hold a portfolio of stocks and simultaneously sell ("write") call options on those assets or their underlying index to generate high, regular cash distributions. While they offer excellent immediate income and lower volatility in sideways or falling markets, they typically sacrifice long-term capital growth during bull markets.
How the Strategy Works
1. Portfolio: The ETF buys a basket of stocks (e.g., tracking the S&P 500 or ASX 200).
2. The Option Sale: The fund manager sells call options on those stocks. By doing this, the fund gives a buyer the right to buy the shares at a predetermined price (the strike price) in exchange for a fee, known as an option premium.
3. The Yield: The collected premiums are distributed to investors as regular (often monthly) income, which can supplement traditional stock dividends.
Pros & Cons
Advantages
High Cash Flow: Ideal for retirees or income-focused investors looking to generate tangible cash yield.
Downside Cushion: The collected premiums provide a buffer that can help minimize losses in a flat or bearish market.
Lower Volatility: They tend to experience smaller price swings compared to traditional, growth-focused index funds.
Disadvantages
Capped Upside: If the underlying stocks skyrocket, the call option will be exercised, capping your capital gains. You miss out on massive bull market rallies.
Eaten Principal in Crashes: While the premium offers a small buffer, it does not fully protect against severe market crashes.
Higher Costs: These funds require active, monthly trading to "roll" options, resulting in higher management expense ratios (MER) than plain index funds.
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Popular Examples Available to Australian Investors:
Global X S&P/ASX 200 Covered Call ETF (AYLD): Tracks the performance of the ASX 200 while selling call options to enhance yield.
Global X S&P 500 Covered Call Complex ETF (UYLD): Applies the same buy-write strategy to the S&P 500, targeting US equities. (no franking credits)
JPMorgan Equity Premium Income (JEPI / JEPQ): High-profile US-domiciled actively managed ETFs that use a mix of equity holdings and equity-linked notes (ELNs) to distribute high monthly income
Thursday, 23 January 2025
The world's top 10 coffee shops 2025
The world's top 10 coffee shops, according to the World's 100 Best Coffee Shops list, are: Toby's Estate Coffee Roasters (Sydney, Australia), Onyx Coffee LAB (USA), Gota Coffee Experts (Austria), Proud Mary Coffee (Australia), Tim Wendelboe (Norway), Apartment Coffee (Singapore), Kawa Coffee (France), Coffee Anthology (Australia), Story of Ono (Malaysia), and Tropicalia Coffee (Colombia). Toby's Estate in Sydney, Australia, has been named the best coffee shop in the world.
Here's a more detailed look at the top contenders:
1. Toby's Estate Coffee Roasters (Sydney, Australia):
Toby's Estate has a flagship cafe and roastery in Chippendale, Sydney, which was named the best coffee shop in the world.
2. Onyx Coffee LAB (Rogers, Arkansas, USA):
With multiple locations in Arkansas,
3. Gota Coffee Experts (Vienna, Austria):
Gota is praised for its award-winning coffee and hands-on workshops where visitors can learn about coffee processing, roasting, and brewing.
4. Proud Mary Coffee (Melbourne, Australia):
Proud Mary is a well-regarded coffee shop with a focus on quality and a strong connection to its coffee growers.
5. Tim Wendelboe (Oslo, Norway):
Tim Wendelboe is a renowned coffee professional
6. Apartment Coffee (Singapore):
7. Kawa Coffee (Paris, France):
8. Coffee Anthology (Brisbane, Australia):
Coffee Anthology is a Brisbane-based coffee shop that has earned a reputation for showcasing a rotating selection of Australia's finest coffee producers.
9. Story of Ono (Petaling Jaya, Malaysia):
Story of Ono is a coffee shop in Malaysia that has made its mark on the world stage with its unique offerings and contributions to the local coffee culture.
10. Tropicalia Coffee (Bogota, Colombia):
Tropicalia Coffee is a Colombian coffee shop that represents the country's rich coffee heritage and is known for its high-quality beans.
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A fav bookstore/ cafe in Sydney
Wednesday, 22 January 2025
BTI - Bailador Technology Investments
BTI
030726
This is a LIC - Listed Investment Company
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ASX:BTI (Bailador Technology Investments) has experienced mixed performance over the last 5 years. While the company maintains minimal debt and consistently pays a high dividend, its core earnings have declined and the stock price has traded at a significant discount to its underlying Net Tangible Assets (NTA). [1, 2, 3, 4, 5]
Financial Snapshot (5-Year Overview)
- Profit & Earnings: Core earnings have seen an average decline of roughly 6% per year over the last 5 years. In FY2025, BTI reported net earnings of A$19.25 million, down from $20.67 million the previous year. [1, 2, 3]
- Return on Equity (ROE): The trailing twelve months (TTM) ROE hovers near 9.8%, having historically tracked in the solid 8% to 9% range. [1, 2]. The ROE is not consistently growly as are earnings , so forecasting future profit, dividends, etc is difficult
- Debt Levels: BTI maintains a very strong balance sheet with negligible levels of debt (a debt-to-equity ratio of practically 0. The company finances follow-on investments using its robust capital and cash reserves. [1, 2, 3, 4, 5]
- Dividends: BTI is a strong income stock with a dividend yield exceeding 8%. The company has increased dividend payouts by an average of 39% annually over the past 5 years, maintaining a payout ratio of roughly 44% to 45%. [1, 2, 3]
- Share Price vs. Value: Over the 5-year period, BTI's stock has trended down, resulting in a 5-year share price return of approximately -29%. Because the share price has lagged, it regularly trades at a deep discount—frequently between 30% and 44%—to its pre-tax NTA
I look at this as a dividend stock. There is mostly sideways share price movement. very little long term growth in the share price. But if you can buy it at low PE ratios the regular income is welcome
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PE Ratio
5.60 9.11 8.37 31.17 6.00 6.77
2026 2025 2024 2023 2022 2021
Over the last 10 years, Bailador Technology Investments (ASX: BTI) has traded at a median Price-to-Earnings (P/E) ratio of 8.27x, experiencing significant valuation swings driven by the realized gains and valuation adjustments of its underlying technology portfolio. [1]
As of mid-2026, the company trades at a historically low trailing twelve months (TTM) P/E ratio of roughly 5.6x to 5.7x, which sits about 31% below its long-term historical median. [1, 2]
Historical P/E Performance Metrics
According to historical financial tracking from platforms like GuruFocus and Market Index, the company’s key 10-year P/E boundaries include:
- 10-Year High: 35.66x
- 10-Year Median: 8.27x
- 10-Year Low: 3.91x [1]
Recent Yearly P/E Breakdown
Because Bailador operates as a Listed Investment Company (LIC) focused on venture capital and private expansion-stage technology, its net profits (and consequently its P/E ratio) fluctuate dramatically based on when portfolio companies are up-valued or sold.
Important Analytical Considerations
- The "LIC Discount" Blindspot: P/E ratios are often a secondary metric for asset managers like Bailador. Investors primarily evaluate ASX:BTI using its Price-to-NAV (Net Asset Value) ratio. Currently, Bailador trades at a steep discount to its Net Asset Value (Share Price of ~A$0.94 vs NAV of ~A$1.70), reflecting a wider market trend for small-cap investment firms. [1, 2, 3]
- Earnings Lumpiness: High profits during portfolio exits (such as previous cash-realized exits from Instaclustr or Standard Ledger) temporarily spike earnings, making the P/E ratio appear artificially low for the subsequent 12 months.
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