Author: lvc-admin

Categories
Technology Stocks

ABC delivered 1H23 revenue growth of +8.4% y/y to $1.7bn

Investment Thesis

On valuation grounds relative to the current share price, ABC trades fair value. 

  • Trading on 2-Yr PE-multiple of 10.2x and dividend yield of 5.1% represents good value at these levels.
  • Macro conditions remain uncertain in key regions.
  • Strong pipeline of infrastructure projects over the next 2 years is a positive but timing and execution is a risk.
  • Solid balance sheet position provides some flexibility to the Company to pursue growth.
  •  Leading positions as a lime producer, concrete products producer and cement and clinker supplier.
  • Outlook for lime looks relatively positive with higher infrastructure projects and resource sector activity.

Key Risks

  • Softer sales volume than expected. 
  • Loss of market share to competitors or imports and pressure on pricing. 
  • Softer than expected pricing increases. 
  • Higher than expected energy prices. 
  • Execution risk in relation to Company’s cost-out and vertical integration strategies. 
  • Deterioration of A$ relative to other currencies. 
  • Unfavorable weather impacts.

Key Highlights: Relative to the pcp and on a constant currency basis: 

  • Revenue increased +8.4% to $1.7bn, driven by price increases and volume growth across most product lines. 
  • Underlying EBITDA (including property profits of $57.6m) increased +7.7% to $295.3m with margin down -10bps to 17.4%, negatively impacted by increased costs and wet weather which impacted ability to deliver products efficiently, thus more than offsetting price and volume increases across some product lines. 
  • Underlying NPAT decreased -0.9% to $118m and statutory NPAT declined -12.1% to $102.6m, impacted by higher operating costs as a result of inflation, particularly energy costs, and wet weather events. 
  • Operating cashflow declined -14.8% to $166.4m, largely due to lower earnings and an increase in working capital associated with higher receivable and inventory levels. 
  • Capex increased +81.6% to $255.1m, largely due to the spend on the Kwinana Upgrade project, with total capex split between stay-in-business capital of $123.9m, up +16.9% and development capital of $131.2m, up +280.3%. 
  • Net debt increased +31.8% y/y to $576.4m due to the Zanows acquisition and Kwinana Upgrade project, partially offset by surplus land sales, resulting in a leverage ratio increasing +0.4x y/y to 2x and gearing increasing +980bps y/y to 44.3%, with both remain well within banking covenants (though at higher end).
  •  Underlying ROFE of 9.5%, declined -110bps y/y, reflecting investments in Kwinana Upgrade project and the Zanows acquisition.
  •  The Board scrapped the final dividend to preserve capital required for the completion of Kwinana Upgrade project, resulting in a total FY22 dividend of 5cps, down -60% y/y.

Company Description

Adbri Ltd (ABC) is an Australia listed construction materials and liming producing company. ABC is Australia’s leading (1) lime producer in the minerals processing industry; (2) concrete products producer; and (3) cement and clinker importer. ABC is Australia’s number two cement and clinker supplier to the Australian construction industry and number four concrete and aggregates producer.

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
Shares Small Cap

Zip Shares Still Cheap After Walking Away from Sezzle, But Its Fundamentals Are Getting Murkier

Business Strategy & Outlook:    

Zip’s focus is on maximizing its addressable market. Its business is more diversified than single-product buy now, pay later, or BNPL, players, with varieties in financing options, transaction limits, and repayment schedules. Customers enjoy simple sign-up and checkouts, high acceptance by retailers and flexible financing solutions to help better manage their cash flows. Merchant partners may benefit from increased conversion rates, basket sizes, and transaction frequencies. Zip has a revolving credit business in Australia. ZipPay finances up to AUD 1,000, and ZipMoney AUD 1,000 and above. It also boasts a broader merchant base including retail, home, electronics, health, auto, and travel. Around 70% of revenue is derived from customers, mainly from account fees and interest. Meanwhile, Zip Business provides unsecured loans of up to AUD 500,000 to small and midsize enterprises. 

Zip adopts an installment financing model overseas, helping it scale up faster and keep up with competition in the underpenetrated global BNPL landscape. The acquisition of U.S. based Quad Pay materially boosts its growth prospects. It also operates in the U.K., Canada, Europe, Mexico, and the Middle East. Zip enhances customer stickiness via ongoing product add-ons. It has a Pay Anywhere function that lets users transact at a wide variety of avenues without being confined to merchant partners. Users also benefit from promotional offers, cash-back deals, or free credits. Newer features include crypto trading, credit reporting, and savings accounts. For merchant partners, Zip invests in co-marketing to help them acquire new customers. Zip has strong earnings prospects, but its margins will be increasingly under pressure and it will not achieve the same penetration and transaction frequency overseas as it had domestically. While it benefits from the growth of e-commerce and increasing preference for more convenient/cheaper forms of financing, anticipated heightened competition to its products. The capital-intensive domestic business cannot scale up as quickly, its fee structure potentially creates friction for customers, and its product offering in the U.S lacks clear differentiation.

Financial Strengths:  

While credit stress is creeping up, Zip remains overall in reasonable financial health. As of March 2022, the net bad debt ratio for its core ANZ business sits at 3.40% of receivables, while arrears are at 2.29%. But as a reprieve, Zip’s current financial position would be bolstered by: 1) its March equity raise; and 2) avoiding absorbing Sezzle’s net losses. Its debt/capital ratio is 56%, while the ratio of equity/receivables has improved to 52% in fiscal 2021 from 8.1% in fiscal 2017. Zip’s bad debts should stay manageable in a major credit event. Unlike some peers, Zip conducts a greater degree of background check before onboarding customers, such as collecting bank statements and pulling in information from a credit bureau. Soft credit checks are similarly performed when onboarding new customers overseas. This helps compensate for the fact that its receivables are higher-risk due to them having longer repayment periods and higher transaction value (notably for Zip Money) or it having a Pay Anywhere model. Its installment businesses have shorter turnover periods and lower transaction values, meaning it can know much earlier (relative to credit cards) if customers have trouble making payments and can therefore amend its risk controls accordingly. Most its Australian receivables are funded by its asset-based securitization program, with undrawn facilities totaling AUD 401.9 million as of March 2022. It also has USD 168.1 million and AUD 119.5 million of undrawn facilities to fund U.S and Zip Business’ receivables, respectively.

Bulls Say:  

  • Zip is well placed to continue growing its transaction volume, given its variety in financing options and retailer base, as well as its Pay Anywhere model which provides a greater avenue to spend using its products.
  • Zip benefits from an accelerated shift to e-commerce, increased adoption of cashless payments, and a growing need among merchants for effective marketing amid a challenging retail backdrop.
  • Zip faces lower regulatory risks than its BNPL rivals, as it already conducts a greater degree of background checks and ZipMoney is already regulated by the National Credit Act.

Company Description: 

Zip is a diversified finance provider, offering consumer financing via a line of credit (via ZipPay and ZipMoney) and installment-based finance (via Quad Pay, Spotii, Twisto, and PayFlex); as well as lending to small to midsize enterprises (via Zip Business). Zip’s fortunes are largely tied to the buy now, pay later, or BNPL, industry. Most of its products–ZipPay, Quad Pay (Zip U.S.), and PayFlex–do not charge interest based on outstanding balances. Around 60%-70% of Zip Pay’s/Zip Money’s revenue is derived from customers, mainly via account fees and interest. Meanwhile, its installment businesses primarily generate revenue by receiving a margin from merchants, which compensates it for accepting all nonpayment risk and for encouraging consumers to transact more frequently.

(Source: Morningstar)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
Fixed Income

JPMorgan Climate Change Solutions Fund – Class A Units An investment style with a thematic focus on a UN Sustainable Development Goal

This product is likely to be appropriate for a consumer seeking capital growth to be used as a small allocation within a portfolio where the consumer has a high risk/return profile and needs daily access to capital. The minimum suggested holding period is 5 years.  To achieve a return through investing in equity securities of companies with exposure to the theme of climate change solutions.

Key Risk

The risk management function of JPMAM provides oversight, coordination, support and a consolidated view of risks and controls to senior management and executive management of the Manager. The function harnesses the support of the various risk management groups of JPMAM, with assistance from regional JPMAM risk personnel, which supervises credit risk arising from counterparty activities conducted on behalf of clients. All investments carry risk. Different strategies may carry different levels of risk, depending on the assets that make up the strategy. The value of the investment may fall for a number of reasons, including the risks set out below, which means that you may lose some or all of the investment. Before making an investment decision, it is important to understand the risks that may affect the value of the investment. While it is not possible to identify every risk relevant to investing in the Fund, that is detailed in the following table significant risks that may affect the investment. Assets with the highest long-term returns may also carry the highest level of short-term risk due to their generally larger fluctuations in returns. The level of risk for each person will vary depending on a range of factors including age, investment timeframe, other investments and risk tolerance. The financial adviser may assist you in determining whether the Fund is suited to the objectives, financial situation and needs including the level of diversification you need. The following table outlines the key risks of the Fund. Investment in the Fund is subject to investment risk, including possible delays in repayment and loss of income and capital invested.

Type of key risk:

  • Concentration Risk
  • Counterparty Risk
  • Thematic Risk
  • Hedging Risk

Fund Performance:

ESG integration process 

The ESG Data and Research Working Group vets and reviews the ESG integration approach of each investment group. The Working Group is chaired by the Global Head of Sustainable Investing, Jennifer Wu, and its members are senior portfolio managers, research analysts and investment stewardship specialists. The Working Group’s review is used to form recommendations that the Sustainable Investing team submit to the Sustainable Investing Oversight Committee (SIOC), which is responsible for approving or rejecting the ESG-integrated status of each investment group. This committee was established in 2021 as part of a comprehensive review of the sustainable investing governance practices, with a particular emphasis on structures for oversight of investment stewardship and ESG integration. Voting members of SIOC include the Chief Investment Officers (CIOs) of all applicable asset classes, thereby gaining oversight and assuming responsibility for the integration of sustainability risk related to the investment decision process. The ESG Data and Research Working Group, alongside the Sustainable Investing team, has developed a 10-metric framework to evaluate ESG integration progress at each critical step of a typical investment process. Investment groups are required to present their ESG integration approach to the Working Group. The process for determining which investment groups are ESG integrated has continued to evolve and improve with the development of the framework (see next page). To receive ESG-integrated status under the current methodology, the investment groups must receive an aggregate score of at least 30 points out of a total of 50 and, for each metric, receive at least a 2 on a scale of 1 to 5. If the investment group does not meet this threshold, the Working Group will discuss the improvements required before it can reapply at a later stage. For those that are successful, the score and feedback are used to form a recommendation that the Sustainable Investing team submits to SIOC for formal approval of the ESG-integrated status.

About the fund

Climate change is one of the biggest challenges that are faced as a society. But companies around the globe are rising to the challenge. Climate Change Solutions Fund invests in a high-conviction portfolio of the forward-thinking companies developing and scaling solutions to address the drivers of climate change, tapping into a wave of innovation across sectors and across the market cap spectrum, while supporting a sustainable future for us all.

(Source: Banyantree)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
Dividend Stocks

Sonic Healthcare’s share price strongly appreciated on the day of its 1H23 results announcement

Investment Thesis

On valuation grounds relative to the current share price, SHL trades fair value. 

  • As the Covid pandemic subsides, near-term earnings may underwhelm but in the longer term, there’s no doubt that the quality of SHL’s assets, which is geographically diversified and high-quality management team. 
  • The Aging population requires more diagnostic tests, especially as Medicine focuses on preventative medicine. 
  • Market leading positions in pathology (number one in Australia, Germany, Switzerland, and UK number three in the US). Second leading player in Imaging in Australia. 
  • High barriers to entry in establishing global channels. 
  • Ongoing bolt-on acquisitions to supplement organic growth and potentially improve margin from cost synergies. 
  • Leveraged to a falling dollar. 
  • Globally diversified.

Key Risks

  • Disruptive technology leading to reduced diagnostics costs. 
  • Competitive threats leading market share loss. 
  • Deregulation resulting in new pathology collection centres. 
  • Adverse regulatory changes (fee cuts). 
  • Disappointing growth. 
  • Adverse currency movements (AUD, EUR, USD).

Key Highlights: Relative to the pcp and on a constant currency basis: 

  • Base business (ex-Covid testing) revenue of $3,703m, was up +9% versus the pcp or up +11% versus the pre-pandemic 1H20. Base business revenue (ex-Covid testing) organic growth was +6% versus 1H22 and +8% versus 1H20 (constant currency, per working day). SHL’s management noted “growth gaining momentum with January 2023 versus January 2020 revenue up 10%, particularly strong in Australian Pathology division”. Base business margins were in line with pre-pandemic levels. 
  • Covid-19 revenue of $379m, represents a decline of -72%. 
  • Total revenue of $4,082m, was down -14% versus the pcp or up +22% versus the prepandemic 1H20. 
  • EBITDA of $920m was down -40% versus the pcp or up +33% versus the pre-pandemic 1H20.
  • Net profit of $382m was down -54% versus the pcp or up 47% versus the pre-pandemic 1H20. Earnings per share was up +52% versus 1H20 (pre-pandemic). 
  • SHL’s gearing level are close to historic lows, with ~A$1.5bn of available liquidity, well positioned to fund growth, with the Company currently progressing several acquisition and contract opportunities.

Company Description

Sonic Healthcare (SHL) is a medical diagnostics company with operations in Australia, New Zealand, and Europe. The company provides a comprehensive range of pathology and diagnostic imaging services to medical practitioners, hospitals and their patients along with providing administrative services and facilities to medical practitioners. SHL has three main segments: (1) Pathology/clinical laboratory services based in Australia, NZ, UK, US, Germany, Switzerland, Belgium and Ireland. (2) Diagnostic imaging services in Australia; and (3) Other which includes medical centre operations (IPN), occupational health services (Sonic Health Plus) and laboratory automation development (GLP Systems).

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
Global stocks

Boston Beer Faces Shipment Declines as Hard Seltzer Continues to Struggle

Business Strategy & Outlook:
Though much smaller than the brewing behemoths, Boston Beer is well positioned in malt categories, boasting a meaningful growth profile that mainstream beer lacks. The firm has shown a remarkable proclivity to not only augment its portfolio in alignment with the latest growth vectors but to also capture a disproportionate share of the economic rents generated from this growth by being one of the first movers. One can see this exemplified in the company’s participation in the initial rises of craft beer, cider, and more recently, hard seltzer. While seltzer trends have slowed significantly, its surmise sales at Boston Beer will continue to be supported by secular consumption shifts (such as the desire for a low-sugar footprint and varied flavor profiles, and as evidenced by the success of Truly Margarita and the launch of Truly Vodka Seltzer).

To admit Boston Beer’s growth trajectory is not without risk. Due to the torrid growth that hard seltzer had achieved in prior years, a slew of new entrants led to dizzying saturation that has had a discernible impact on category growth (an issue creeping into other RTD areas). Additionally, U.S. craft beer remains oversaturated as per view, with peers spanning from local upstarts to large multinationals. Microbreweries have been taking share from established players like Boston Beer, as parochial preferences seem to be driving many consumers toward locally produced beers with small and homely essences. Nevertheless, the firm has meaningful scale advantages over the thousands of small craft breweries operating in the U.S., driving superior unit economics and stellar profitability that allows it to pivot its portfolio and go-to-market approach as necessary. The 2019 Dogfish Head acquisition is an example of this, as the firm had the resources to add a fast-growing, locally resonant family of brands to its mix. Its stalwart positioning also funds fruitful innovation, from incremental initiatives such as its custom beer can, to blockbuster breakthroughs like Truly. Ultimately, to see Boston Beer as a well-run and high-quality operator and believe it has the tools to succeed in a landscape that is in flux.

Financial Strengths:
To assign Boston Beer an Exemplary capital allocation rating, as the firm stacks up admirably against two of the three pillars of framework: Its balance sheet is pristine, and its organic investments have unequivocally been value-accretive in view. While to take a mixed view of its distribution philosophy, to expect investments to be the pre-eminent driver of future shareholder returns, and the company’s suboptimal corporate governance, while worth highlighting, has not had a demonstrably adverse impact on capital allocation up to this point. Regarding investments, as per view on the management team is constructive, and to see as particularly impressive the brewer’s innovation track record across multiple categories and consequent ability to align its portfolio with this century’s malt growth vectors. Boston Beer’s current CEO, Dave Burwick, joined the firm in 2018 following an equivalent role at Peet’s Coffee & Tea as well as senior executive positions at Weight Watchers International and PepsiCo. Burwick’s tenure was preceded by Martin Roper, who announced plans to retire in 2018 after 17 years at the helm. Towering over these operational leaders has been Jim Koch, who founded Boston Beer in 1984, chairs its board, and remains integrally involved in the company’s strategic direction. To believe Koch, his CEOs, and their respective teams, have done a commendable job providing rudder for a firm competing within a dynamic brewing landscape. This is evidenced by the brewer’s consistent positioning as an innovation bellwether within the U.S. malt space, having been at the forefront of high-growth categories like craft beer, cider, and hard seltzer. Innovative efforts into categories like hard seltzer should provide economic value ahead, as the favorable secular dynamics (chiefly health consciousness and premiumization) underpinning the category’s robust adoption (over half a decade of triple-digit growth) should persist at a more normalized level ahead. Despite being number two in the space (behind White Claw), management has fended off a deluge of competition from giants like AB InBev and Constellation Brands, maintaining or growing share. Being at the vanguard of innovation has been core to this success, and this favorable category should continue to offset challenging dynamics in craft and hard cider. The firm was all but inactive on the M&A front prior to 2019, when it consummated its largest acquisition to date of Dogfish Head, a Delaware-based craft brewery, for roughly $330 million in cash and stock.

As per the strategic rationale for the deal is prudent, as the smaller scale and local essence of Dogfish Head’s brands (which resonate more deeply with many craft drinkers) augment the growth profile of Boston Beer’s craft portfolio. However, the over 3 times forward sales multiple that was paid was a bit rich, as evidenced in the $27.1 million impairment of intangible assets the firm took in 2022 as forecasts for brand performance were below those made on the acquisition date. While ostensibly stepping back from the operational helm in 2001, one believes Jim Koch continues to wield unencumbered authority over decision-making at the company. This is so because, within the dual share class structure that the firm operates, Koch owns substantially all the class A stock, giving him the preponderance of voting rights as well as the power to elect the majority of board directors. Koch’s carte blanche is evinced not only by his voting rights but also his wife’s position as a long-standing member of the board. From the vantage point, these realities not only give rise to material key-person risk, but also a heightened probability of misaligned incentives between Jim Koch and class B common stock owners. Still, until this reality manifests in clearly injudicious capital allocation, we’ll place qualms here on the back burner. Regarding distributions, Boston Beer has never paid a dividend, instead deploying its free cash flow toward share repurchases. To take a dim view of the firm’s indiscriminate approach to share repurchases, but this view is countervailed by the fact that internal reinvestment takes precedence over cash returns in management’s capital allocation priorities. Additionally, given the company’s long-term commitment to share buybacks, to believe there have been times when buybacks have been executed at prices above intrinsic value, as well as prices below, ultimately netting to a value-neutral impact. One does not expect the company to pay a dividend throughout the explicit forecast, but continue to model meaningful repurchases, which should average around $170 million on average over the next five years.

Bulls Say:
Boston Beer competes exclusively at the high end of malt beverages, which are seen as secularly advantaged relative to mainstream and value segments.
The firm is one of two market incumbents in hard seltzer, which offers it an easier route to grow the top line through innovative product offerings.
Thanks to historical successes across the FMB and RTD products, Boston Beer has a unique ability to elevate category innovation through a well-established distribution network.

Company Description:
Boston Beer is a leader in U.S. high-end malt beverages and adjacent categories, with strong positions in craft beer, hard cider, and hard seltzer. The firm sells an array of flavor variants and package sizes, predominantly centered around four priority brands: Samuel Adams, Angry Orchard, Twisted Tea, and Truly Hard Seltzer. Its drinks are produced in both company-owned breweries as well as through third-party contract arrangements, and while the company primarily goes to market through independent wholesalers (as mandated by law), it operates a fairly large salesforce to induce demand across the value chain (distributors, retailers, and drinkers). The preponderance of revenue is generated domestically.

(Source: Morningstar)
DISCLAIMER for General Advice: (This document is for general advice only).
This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.
The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require. The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.
The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.
Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.
Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents. Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material. Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.
The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
Technology Stocks

CRISPR Therapeutics’ Pipeline Continues to Make Progress; FVE Remains $119; Shares Very Undervalued

Business Strategy & Outlook: 

CRISPR Therapeutics is a gene editing company focused on the development of CRISPR/Cas9-based therapeutics. The company’s proprietary platform specializes in Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)/Cas9, which precisely cuts DNA to disrupt, delete, correct, and insert genes to treat genetically defined diseases. CRISPR’s emerging technology has led to a new class of therapies, which are well suited for targeting rare diseases or other disorders that are caused by genetic mutations. CRISPR/Cas9 works by having CRISPR (pieces of DNA sequences) guide Cas9 (an enzyme that can cut and edit DNA) to edit, alter, or repair genes. The company’s proprietary technology has the potential to build blockbusters in rare diseases with limited treatment options available. CRISPR Therapeutics currently has no approved drugs and a largely early-stage pipeline, so to refrain from awarding the company an economic moat. CRISPR Therapeutics is focused on developing and commercializing novel therapies to treat severe, genetic diseases and currently possesses a sizeable, yet mostly early-stage pipeline. Its lead candidate, CTX001, is being developed in collaboration with narrow-moat Vertex Pharmaceuticals for the treatment of transfusion-dependent beta-thalassemia (TDT) and sickle cell disease (SCD). CRISPR Therapeutics and Vertex plan to file for regulatory approval by the end of 2022. The rest of CRISPR Therapeutics’ pipeline is either in early (Phase 1) or pre-clinical stages of development. While CRISPR Therapeutics does not currently have approved products, the company provides long-term investors with pure play exposure to gene editing.

Financial Strengths: 

To assign CRISPR Therapeutics a Standard capital allocation rating. Analysis evaluates what to determine to be the three key facets of management decision-making from the perspective of shareholders: balance sheet strength, investment efficacy, and distributions. The Standard rating results from a sound balance sheet, fair investment strategy, and an assessment of shareholder distributions as appropriate. CRISPR Therapeutics’ revenue cyclicality possesses a medium rating and its operating leverage has a low rating. To assess the company’s balance sheet as sound due to management’s demonstrated ability to maintain little to no debt and run a fairly lean operation despite heavily investing in R&D as it works to advance its pipeline candidates. As of year-end 2021, CRISPR Therapeutics had nearly $2.4 billion in cash and investments.

CRISPR Therapeutics’ investment decisions were fair. As an early-stage biotechnology company, it invests heavily in R&D since it’s focusing on developing its pipeline. CRISPR Therapeutics is investing in its gene editing technology to treat a diverse range of severe, genetic diseases. The validation of the company’s gene editing technology through FDA approvals will be crucial as it competes with other companies also entering the gene editing space. If approved, CRISPR Therapeutics’ drugs could be quite lucrative due to high unmet medical needs leading to pricing power. Finally, to assess overall shareholder distributions as appropriate. Even though the company does not currently pay a dividend, to view this as appropriate since CRISPR Therapeutics is investing in its pipeline to help build value for shareholders. CRISPR Therapeutics is led by Dr. Samarth Kulkarni, who joined the company in 2015 initially as Chief Business Officer. Prior to joining CRISPR Therapeutics, Kulkarni was a partner at McKinsey & Company in the Pharmaceutical and Medical products practice. While at McKinsey, he co-led the biotech practice, where he focused on strategy and operations, and led initiatives in areas such as personalized medicine and immunotherapy.

Bulls Say:

  • Partnerships allow CRISPR Therapeutics to receive milestones and economic benefits from drug candidate progression while offsetting some of the clinical development costs. 
  • CRISPR Therapeutics’ CRISPR/Cas9 platform has the potential to develop highly efficacious and potentially curative treatments for rare, genetic diseases with high unmet needs, which will likely lead to pricing power.
  • To view the company’s pipeline as possessing strengthening intangible assets and assign it a positive moat trend.

Company Description:

CRISPR Therapeutics is a gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR/Cas9 stands for Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)/CRISPR-associated protein 9 (Cas9), which is a revolutionary technology for precisely altering specific sequences of genomic DNA. The company is focused on using this technology to treat genetically defined diseases. CRISPR’s most advanced pipeline candidate, CTX001, is in collaboration with Vertex Pharmaceuticals and targets sickle cell disease and transfusion-dependent beta-thalassemia, which have high unmet medical needs. The company is progressing additional gene editing programs for immuno-oncology, as well as a stem cell-derived therapy for the treatment of Type 1 diabetes.

(Source: Morningstar)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

Categories
LICs LICs

CDO provides exposure to an actively managed long/short portfolio

On 17 November 2021, CDO listed on the ASX. The Company raised $15.55m as part of the IPO Offer, issuing 5.6m shares at a price of $2.7716 per share (the mid-point of the of the NTA at 31 October 2021). The Company has 15.06m shares on issue and a market cap of $41.9m as at 30 November 2021.

The average stock in the ASX 200 is down over 15% whilst the index is down only 1%. Generally speaking, larger capitalization value-style stocks have held up well whilst smaller capitalization and growth-style stocks have experienced significant retracement and a reversal in trend.

CDO provides exposure to an actively managed long/short portfolio, with a long bias, of Australian and international securities. Cadence Asset Management Pty Limited (Cadence) is the Manager of the portfolio. Cadence manages the portfolio of Cadence Capital Limited, which listed in 2006, using a similar investment philosophy and process that is used for the CDO portfolio.  The Company has two stated investment objectives: (1) provide capital growth through investment cycles; and (2) provide fully franked dividends, subject to the Company having sufficient profit reserves and franking credits and it being within prudent business practices.

Cadence Opportunities Fund was down 2.1% in December, compared to the All Ordinaries Accumulation Index which was up 2.7% for the month. The Company has had a strong start to FY22 with the fund up 21.1% over the first six months of the year, outperforming the All Ordinaries Accumulation Index by 16.5%.

The Board has declared a 7.5 cents fully franked half year dividend, an annualized increase of 25% on last year’s ordinary dividends, reflecting the strong performance of the company over the current year. The current share price is $2.92 and interim dividend equates to a 5.1% annualized fully franked yield or a 7.3% gross yield. 

 (Source: FN Arena)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

DISCLAIMER for General Advice: (This document is for general advice only).

Categories
LICs LICs

VGI enters exclusivity and signs a merger term sheet with Regal Funds Management

VGI Partners Limited (VGI:ASX, “VGI”) announces that it has  entered exclusivity and signed a non-binding term sheet with specialist alternative investment manager Regal Funds Management Pty Limited (“Regal”) in relation to  the proposed merger  of  VGI  and Regal  (the “Proposed Merger”).  The Proposed  Merger  would combine two of Australia’s most recognised and successful hedge fund managers and create a market-leading provider of alternative investment strategies with total funds under management of over A$6 billion.

The Proposed Merger, which would be subject to VGI shareholder approval, would involve VGI acquiring 100%of Regal in consideration for  the issue  of  new  ordinary  shares  in  VGI  to  existing  Regal  shareholders.  The anticipated shareholding of the merged entity at completion of the Proposed Merger, after adjusting for cash,liquid assets and other investments being respectively contributed, being approximately 60% current Regal shareholders and 40% current VGI shareholders. It   is anticipated that VGI would be renamed and its ticker changed to reflect the combined businesses on or after completion of the Proposed Transaction.

Entering into a definitive agreement remains subject to each of VGI and Regal completing confirmatory due diligence, the negotiation of  the  terms  of  a  binding  merger  implementation  agreement,  and  final  board approvals of each of VGI and Regal.

If   a merger implementation agreement is entered into, it is currently anticipated that conditions to completion of  the Proposed Merger  contained in  that  agreement  would include  VGI  shareholder  approval  by  way  of ordinary resolution for the purposes of section 611 item 7 of the Corporations Act 2001 (Cth) and any applicable ASX Listing  Rules,  an independent  expert  concluding that  the  Proposed Merger  is  reasonable for  VGI shareholders, and no material adverse change occurring in relation to either party.

Potential benefits  

If   the Proposed Merger proceeds, it has the potential to deliver several attractive benefits for VGI shareholders, including the following:

  • The creation of a market-leading alternative investment manager with over A$6 billion in funds undermanagement, with exposure to a diversified and growing platform of hedge fund, private market and real asset investment strategies for institutional, high net worth and retail investors in Australia and offshore
  • Combining  the  deep industry  experience,  networks,  and  the  long  investment  track  records  of  two industry leaders – Robert Luciano and Philip King – and their respective investment teams, coupled with  the management  teams  of  VGI  and Regal  and  their  history  in  creating innovative and well-regarded alternative investment products1 Includes institutional investors, family offices, charities, private investors and employees. 
  • Leveraging  complementary  client  profiles  and  relationships  across  the combined  group,  including existing long-term relationships with high net worth individuals and family offices within VGI and Regal, alongside a  combined retail  investor  base of  over  20,000 investors  across  VGI  Partners  Global Investments (ASX:VG1), VGI Partners Asian Investments (ASX:VG8) and the Regal Investment Fund(ASX:RF1)
  • Accessing  Regal’s  highly  developed corporate  platform and business  support  network,  including  a well-established marketing  and  distribution  capability,  to  provide a  refreshed approach  to  sales, marketing and communication activities across the merged entity and reduce non-investment related activities undertaken by Robert Luciano and the VGI team
  • Provide  an opportunity  for  Robert  Luciano  and  the  VGI  investment  team  to  leverage  additional resources from the merged group, including Regal’s extensive investment capability and track record investing in Asian equity markets and private unlisted investments.

Governance

The non-binding term sheet entered into by  VGI  and Regal  contemplates  that  following completion  of  the Proposed Merger, the merged entity will have a Board consisting of six Directors, with two nominated by each of VGI and Regal in addition to the appointment of two external independent directors. Neither Robert Luciano nor Philip King will be on the Board of the merged entity given their investment focussed roles. An executive committee for the merged entity will be drawn from both VGI and Regal.

Exclusivity 

VGI has granted Regal a period of six weeks of exclusivity on customary binding terms which include no shop,no talk, and no due diligence restrictions (subject to required customary fiduciary exceptions), and an obligation for VGI to notify Regal if it receives a competing proposal. Details of the exclusivity arrangements are set out in Annexure A to this announcement.

About VGI Partners

VGI Partners Limited is a high conviction global equity manager that was founded in 2008 to invest capital for high net worth individuals and family offices. Today, VGI is also the Manager for two Listed Investment Companies: VGI Partners Global Investments Limited (ASX:VG1) and VGI Partners Asian Investments Limited (ASX:VG8). Listed on the Australian Securities Exchange since 2019, VGI has offices in Sydney, New York and Tokyo.

 (Source: FWarena)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Fixed Income Fixed Income

Fund which provide stable return, diversification by investing bonds

To invest in a diversified portfolio of government and corporate bonds that aims to deliver relatively stable returns with less fluctuation than investing in shares and property.

Approach

FirstChoice Fixed Interest applies a steady multi manager approach, investing in a diverse line up of Australian and global fixed-interest managers. Portfolio returns are driven by the combined effect of blending different active management styles with passive strategies, aiming to achieve style diversification. 

The CFS Investments team decides each manager’s strategic weighting in the portfolio after determining outcomes in the trade-off between potential outperformance and risk. Changes to the strategic weights must first receive approval from the investment committee. External manager screening begins with Mercer’s manager research efforts, which are used to initially screen most managers to build a quality short-list universe. For internally generated ideas, Mercer is also used as an initial sounding board. The team maintains constant dialogue with Mercer about ratings changes and portfolio construction. It then drills down further into the research on short-listed managers, including overseas travel for onsite visits. The team is responsible for manager selection, mix, portfolio review, and monitoring. Portfolio rebalancing to target-weighted manager allocations occurs daily, and tolerance levels are used to avoid unnecessary trading. 

Portfolio

This portfolio invests its funds with seven underlying managers. At November 2021, allocations included a global-aggregate strategy from Wellington (19%) and Morgan Stanley (9.5%), bottom-up global credit strategies from Loomis Sayles (10%) and Franklin Templeton (12.5%), and global sovereign and currency strategies from H2O (9.5%), and Colchester (11.5%). Passive indexed Australian bond exposure is run by First Sentier (28%). Active allocation was reduced from 13% in 2016 to 8% and finally removed altogether in February 2020 following the departure of senior investors in Louisville, Kentucky. The style diversification of managers alongside some passive exposure makes for a durable portfolio suitable as a core holding but one that may also lead to benchmark-like returns.

Performance

FirstChoice Fixed Interest has a solid long-term record, in particular since the global financial crisis. It is ahead of the peer group average and ahead of its own 50/50 composite benchmark net of fees, made up of the FTSE World Broad Investment Grade Index (hedged to AUD) and the Bloomberg AusBond Composite 0+Yr Index. The strategy has consistently outpaced most peers over the long term, though in 2014 and 2015, it trailed the index as bond yields fell, with First Sentier detracting because of a short-duration stance on Australian rates. Colchester’s underweighting in Europe, Japan, and the UK hurt as their yields continued to fall in the first half of 2016. Colchester staged a rebound in the second half that continued through 2017. As in 2017, strong performance from H2O was a key driver of outperformance for the strategy in 2018. This continued into 2019 with H2O contributing significantly to outperformance. The year 2020 was a challenge, with the coronavirus pandemic causing havoc in global markets, Franklin Templeton contributing negative, and below-index performance for the year. 2021 has been difficult, with bond market sell-offs during February and October creating large drawdowns category wide for managers with meaningful duration exposure. Still, over the trailing three-, five-, and 10-year periods to November 2021 the strategy remains in the top quartile for performance.

Top 10 Holdings of the fund

C:\Users\Akhila\Downloads\fixed interest.png

About the fund

To provide relatively stable returns with low potential for capital loss by investing in Australian and global fixed interest securities .To outperform the composite benchmark of 50% FTSE World Broad Investment Grade Index, hedged to Australian dollars and 50% Bloomberg AusBond Composite 0+Yr Index over rolling three-year periods before fees and taxes

The investments are managed by a number of leading fixed interest managers comprising an index manager whose investments aim to mirror the index, and active managers who aim to outperform the index. This is designed to deliver more consistent returns with less risk than would be achieved if investing with a single investment manager. The portfolio aims to hedge currency risk.

 (Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
LICs LICs

AMCIL Limited – Closed Ended Investment Fund

AMCIL is a medium to long-term investor in the Australian equity market. Its investment approach is to construct a focused portfolio in which large and small companies can have an equally important impact on investment returns. The market perception of AMCIL’s future earnings potential and dividend. Supply and demand for shares at any one time can fluctuate because of the liquidity in the shares, investor sentiment and expected future performance. Their consistent after tax paid investment returns achieved over the long term. 

Portfolio Holdings 

Investment Team 

The group has and experience board of directors and consisting members which are portfolio manager Kieran kennedy, David Grace, Brett McNeil and Financial Analyst are jaye Guy, olga Kosciucyzt, stuart Low, Nga Lucas. AMCIL’s corporate objective is to provide shareholders with returns that exceed the market over the medium to long term through through strong capital growth in the portfolio over the medium to long term together with the generation of dividend income.

Company Profile 

AMCIL Limited is an investment company. The Company invests in various sectors, which include energy, materials, industrials, consumer discretionary, consumer staples, banks, other financials and real estate, telecommunications, healthcare, information technology and utilities.

(Source: BanyanTree)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.