15 Cent SWM share price = 3 times current earnings - Momentum is beginning!, page-67

@Aviza2913 one of the biggest misconceptions concerning SWM and NEC is the question ‘what if we have a recession and things get worse?’

The answer is that we have already been in the longest per-capita recession in Australia’s recorded history! https://www.macrobusiness.com.au/2024/11/rba-forecasts-record-per-capita-recession/

Consequently, this is also the deepest and longest lasting Total TV ad market recession in recorded history! I don’t see any factual basis to support fears of this per capita recession continuing beyond when the RBA cuts interest rates. (And as notedhere there is not a single economist polled by the AFR who believes that interest rates won’t be cut during the First Half of 2025https://hotcopper.com.au/threads/15-cent-swm-share-price-3-times-current-earnings-momentum-is-beginning.8385495/page-46?get_post=true&direction=previous

In fact right now both ANZ and CBA believe that interest rates will be cut in February 2025 https://www.brokerdaily.au/economy/19839-major-bank-shifts-cash-rate-and-inflation-forecast )

Let’s be clear, the Total TV Ad Market has NEVER in recorded history had more than 2 down years in a row. This is because the ad market is closely correlated to both consumer confidence and business confidence and the fact is that right now both consumer confidence and business confidence have already passed their cycle lows (refer to the below Westpac consumer sentiment report).
https://library.westpaciq.com.au/content/dam/public/westpaciq/secure/economics/documents/aus/2025/01/er20250114BullConsumerSentiment.pdf

I have already spoken about interest rates being cut during first half 2025 in an earlier post. (My personal opinion is that the RBA will cut interest rates at the February 2025 meeting but I think it’s appropriate and conservative to allow for a broader estimate that the RBA will cut during 1H 2025). This will be the turning point for the Total TV ad market.

Remember that the ad market only went into recession after interest rates were hiked 13 times in a row. Once monetary conditions begin to loosen the ad market will return. (Just as it did after the GFC, the 1990s recession, The dotcom bubble, covid-19 pandemic etc)

So the purpose of buying SWM shares now is to buy while the company trades at less than 1.5x mid cycle earnings which is a wonderful opportunity that is only currently available BECAUSE the market hasn’t factored in a recovery. By the time that the economic storm clouds have lifted during 1H 2025 its then too late to buy and make multi-bagger returns.