Qube Logistics worth a buy....might surprise on the upside

Been looking through some logistics stocks and for mine, Qube logistics looks undervalued.

Currently at $2.27 but my price target is a solid $3.39 based on a fairly low cost of equity of 7% (it has a 7.1% ROE in 2013).

While it has a fairly high debt of around $700 million in total so it is looking at Debt to Equity ratio close to 0.7, it is not in the scray zone as yet.

But we will see...the Financial full year report is out in August. Might be worth while to thow some dollars in to see what happens.

Not: Not a recommendation to invest/not invest in Qube. If pain persists, please see your investment professional.

Season 2014 : Which is the most competitive league...NRL or AFL

Its all about the variance.

So far this season....

NRL - Variance between the win percentages of all 16 teams is 0.0148

AFL - Variance between the win percentages of all 18 team is 0.037

So by this rational, the NRL is at least twice as competitive as the AFL, with less teams.

So much for the draft levelling things up. It's about the Salary Cap stupid.

NRL Season 2014 Most improved, least improved Teams

Have started getting into Sports Statistics recently, probably due to my World Cup series of posts as well as my following of Nate Silvers fivethirtyeight.com statistics blog (see my link list if you would like to view)

Anyway, being also an avid NRL fan, I was wondering if we could use statistics to work out the most improved/least improved teams of the 2014 NRL season so far.

So I have calculated the last 3 year average win percentage of each team in the NRL an have used that as the baseline of what the win percentage should be in 2014. I have then compared that average with what the current win percentage is to get an idea of the percentage "improvement" or "detriment" of each team is.

And the improvers are :-

1. Parramatta: 99.3% improvement
2. Penrith: 66.4% improvement
3. Gold Coast Titans : 25% improvement
4. Sydney Roosters : 18% improvement
5. New Zealand Warriors : 15% improvement
5. West Tigers : 15% improvement
7. Bulldogs : 8% improvement
8. Dragons : 5% improvement
9. Manly: 3% improvement

On the other side are the dodgies

1. Cronulla Sharks: 49% destruction
2. Newcastle Knights: 38% destruction
3. Canberra Raiders : 27% destruction
3. Melbourne Storm : 27% destruction
5. North Queensland Cowboys: 17% destruction
6. Rabbits : 6% destruction
7. Bronco's : 4% destruction

Interesting stats really. Just goes to show how Ricky Stuart has affected the teams he has left/joined. Also, just how off field factors (peptites) and severe injury (Alex McKinnon) can affect teams performance.

Market Risk Premium for June 2014: 12.01%

Yep, its time for the all important Market Risk Premium for 30 June 2014. This is the risk premium that goes into all the valuations for stocks from the annual reports.

Using the same methodology as always...we have the capital return for the market over the trading days of the year to be 11.13% Add the average dividend yield over that period of 4.51% and you have a total market return being 15.64% (a bit down from March)

Average 10 year bond yield is now 3.63% and you have the Market risk premium of 12.01% (down from March).

So, still high but on the decline. I wonder if this is the beginning of the long awaited correction. It would not surprise.

Government Education...Growing, but not everywhere!

Based on my spreadsheets from yesterday, I was curious if Public education was growing. It is growing, up around 5% since 1999, but in a lot of states it is going backwards. Check this out

Education Efficiency....what is happening in VIC!

Been looking into Education funding, particularly in the Primary and Secondary Space.
Interesting to note that while education funding has increased over 14 years between 1999 and 2013, the number of schools operating has dropped.

I note that over the 14 years there has been a decrease of 194 schools...schools that have closed. But it's worse in the Government sector. Over the 14 years, 306 Government schools have closed...it's just that Catholic schools (16) and Independent Schools (96) have opened to counter the decrease. I guess that is why the rate of students in private schooling has increased over the years.

The biggest drops in schools have been in VIC (105 Government schools closed), SA (101 Government schools closed) and QLD (64 Government schools closed). The only difference is that in QLD, an equivalent amount of Catholic and Independent schools have opened, leaving only a net loss of 1 school. The other two states are still in the deficit of schools by around 100.

Number of schools has only increased in two states, NT and WA...probably due to the mining boom over the years.

What is also interesting is that even with these school closure in VIC, and QLD...the number of Government teaching staff is still increasing...for VIC, at 1.1% a year and for QLD, at 1.6% a year. SA bucks the trend, experiencing a loss of teachers of 0.2% a year.

So we have a situation where in VIC, in 1999 it was 23 teachers per government school....now in 2013, it is 29 teachers per school.

Not great efficiency really. Think the teachers union have a lot of power in VIC!

Asian Cup 2015 - Australia no luck....still in the pool of death!

Still no luck with the Soccer gods for Australia.

Looking at our underwealming performance in the World Cup, I have started to think about our next big event...hosting the Asian Cup.

Bit of Silverwear for the Socceroos? Not likely based on the draw.

Once again, we have ended up in the pool of death, along with South Korea, Oman and Kuwait.

Based on my formaula for pool of death, created during the World Cup, we are no certainties to go through...it's the strongest group. Home field advantage will hopefully help propel us across the line...but no guarantees.

The danger is when you look at our record against the teams over the last 5 years.

South Korea Record over the last 5 years. Played 4 times, Wins equal 1-1 (2 draw)
Oman Record over the last 5 years. Played 6 times, Australia 3-1 (2 draws)
Kuwait Record over the last 5 years. Played 2 times, Kuwait 1-0 (1 draw)

We have played Oman the most, with the most victories, but who knows about the other two. Might be worth throwing some dollars on Australia missing the Second Round...