Category: Sectors

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LICs LICs

MXT Raises $192m through Institutional Placement

It seeks to invest 60% to 70% of capital in the Metrics Credit Partners Diversified Australian Senior Loan Fund (DASLF), 20% to 30% of capital in the MCP Secured Private Debt Fund II (SPDF II) and 10% to 20% of capital in the MCP Real Estate Debt Fund (REDF).

The portfolio of MCP Wholesale Investments Trust consists of a portfolio of corporate loans, investment grade and sub-investment grade loans, and diversified across borrowers, industries, the credit risk spectrum and loan products. The investment manager of the trust is Metrics Credit Partners Pty Ltd.

Currently, Annual Yield is 4.61% and Latest Share Price is $2.05.

MCP Master Income Trust ((MXT)) reported on April 26 that it has secured binding commitments from wholesale and institutional investors for 95.9 million new units in MXT at a price of $2.00 per unit, raising $192 million.

The proceeds will be invested in accordance with the investment mandate and target return of MXT.

“The additional investor capital will provide for increased portfolio diversification, which lowers investment risk, expected positive impact on total investor returns as new capital is deployed and invested, enhanced liquidity from MXT’s increased scale, and expected further cost reductions over time,” said Andrew Lockhart, Managing Partner at The Metric.

Company Profile

MCP Master Income Trust (the Trust) is an Australia-based investment trust. The trust, through investment in MCP Wholesale Investments Trust and other trusts, will invest in Australian corporate loans. The MCP Wholesale Investments Trust may make direct investments or invest in Wholesale Funds, which invest directly in portfolios of corporate fixed income through direct lending to Australian companies.

(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.

Categories
LICs LICs

Future Generation Investment Company Ltd

Future Generation provides high diversification by investing in about 20 funds managed by diverse Australian fund managers who work for free.

At least 10 holdings are likely to be represented in each of those portfolios. As a result, there are several underlying shares that provide adequate diversification.

Future Generation has a pretty strong dividend yield of 6.6 percent when grossed up. Currently, Future Generation provides fully frank divided yield is 3.8% due to Covid -19 Pandemic  Company decreases there dividend yield.

Current performance of Future Generation Portfolio for last 6 months is 12.8% and there outperformance for 6 month is 0.2%. S&P/ASX All Ordinaries Accummulation Index for past 3 years it is 10.3%.

(Source: The Motley Fool)

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.

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LICs LICs

LICs that are sold for less than their true value

The LIC may or may not be completely transparent when it comes to revealing its holdings or NTA [net tangible assets]/performance numbers, and the costs are substantially higher — moreover they usually earn a bonus if they outperform.

LIC share prices, like that of every other publicly traded company, fluctuate based on supply and demand. This means that while the fund may have $1 in assets per share, the stock may be trading for 80 percents… or $1.20.

A large fish may buy out LIC, which is trading at a significant discount to the NTA, and liquidate it for a profit.

LICs can occasionally provide good discounts.

LIC managers tend to get upset when their fund gravy train gets taken away from them

The LIC gets smacked sometimes, especially during periods of acute lack of confidence, while the assets it holds bounce swiftly, thus buying the LIC at a discount is like going back in time and buying those equities before the rally.

(Source: The Motley Fool)

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.

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LICs LICs

NCC With High Dividend Yields of Over 7%

Experience Co Ltd (ASX: EXP), Saunders International Ltd (ASX: SND), and Contango Asset Management Ltd are some of its current investments (ASX: CGA).

COVID-19’s effects on industrial small cap stocks have made things difficult in 2020. Despite this, since its debut in February 2013, Naos Emerging Opportunities has generated an average annual return of 10.1 percent (after expenses but before fees). The same rate is been marked in 2021 also.

The LIC has increased its dividend every year since FY13 due to which the high dividend yield appears to be safe for the next few coming years. It has a profit reserve of 32.7 cents per share, or nearly four years’ worth of dividends at the current rate.

Its current post tax NTA is $1.18 and NCC INVESTMENT PORTFOLIO PERFORMANCE SINCE INCEPTION is 13.44% marked in June 30, 2021. Even with the strong FY21 performance it is also worth adding that a number of the NCC core investments didn’t perform as expected and, in some cases, actually detracted from overall performance.

 (Source: fool.com.au)

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

The War of WAM on ASX! Wilson’s New LIC Hits the Share Market

The founder of WAM in charge of WAM Strategic Value is Geoff Wilson, assures investors in WAM Strategic Value’s ASX WAR prospectus that the company will focus on “finding and investing in $1 of assets for 80 cents.

The LIC intends to accomplish this by grabbing the opportunity of market mispricing like securities trading at discounts to assets or NTA (net tangible assets), corporate transactions, and dividend yield arbitrages with franking credit benefits.

WAM Strategic Value will largely be in the business of purchasing assets from other LICs and Listed Investment Trusts (LITs) for less than their true value. After all, with its $200 million+ funding, it’s likely invested in quite a bit so far. Back then, their units were trading at a 12.2 percent discount to their NTA value.

(Source: msn.com)

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
Dividend Stocks

The Strategic review of Tabcrop Favours a Demerger Rather Than a Sale

Further, Tabcorp’s retail exclusivity has little value when punters can place bets with competitors from their smart phones while inside TAB-exclusive venues, such as pubs. We currently model Tabcorp as a combined entity with the demerger earmarked for completion by June 2022, and make no changes to our AUD 3.40 fair value estimate and no-moat rating.

With long-dated licences across all Australian states other than Western Australia, the lottery business enjoys an monopolistic position in its addressable market, and this is bolstered by the scale of its national prize pool. Optimistic about the lottery segment’s opportunity to better realise these competitive advantages and support a strong dividend payout ratio once unshackled from the beleaguered wagering business–the highly cash-generative lotteries business has historically acted as a funding source for capital-intensive wagering investment.

While signaling it remains opens to improved bids, Tabcorp has baulked at the myriad conditions and hurdles to get the various proposals lobbed for its wagering and media business over the line–notably approval from state gaming regulators and racing industry partners.

Company Profile

Tabcorp operates through principally three segments: wagering and media, lotteries and keno, and gaming services. The firm conducts wagering activities under the TAB brand both online and physically in every Australian state and territory other than Western Australia, reaching 90% of the population through a network of retail venues. Tabcorp also operates regulated lotteries in every Australian state except Western Australia. In addition, Tabcorp Gaming Solutions provides services to electronic gaming machine venues.

(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.

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Global stocks

Positive Position for ABF in Q3 with Primark’s Share Gains In U.K. Reflecting Strength of Brand

Primark achieved volume and value share improvements on a two-year basis during the seven-week period following reopening in the overall U.K. clothing market, which includes online sales, a reflection of its excellent brand and execution, despite not offering a transactional online channel.

We increase our fair value estimate to GBX 2,560 per share from GBX 2,350 to account for the time value of money and stronger sales growth rebound in Primark as reopening gradually resumes. Our discounted cash flow-derived fair value estimate is slightly lower than our sum-of-the-parts valuation at GBX 2,620 per share, with Primark accounting or about 50% of the group’s valuation. Although uncertainty around restrictions has been significantly reduced in recent weeks, the stock already trades in 3-star territory, and we advise investors to wait for a better entry point.

Company Profile

Associated British Foods is a diversified international retail, food, and ingredients group with 130,000 employees and operations in 50 countries across Europe, southern Africa, the Americas, Asia, and Australia. The group sells branded grocery products, grows and processes sugar, supplies farmers with crop input and animal feed, and runs the popular Primark clothing retail chain. It also supplies ingredients like bakers’ yeast, enzymes, lipids, and cereal specialties. Some 40% of sales are in the U.K., and Primark generates more than half of the firm’s operating profit.

 (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
Global stocks Shares

Admiral Benefits from a Pricing Flaw in Motor Insurance

Admiral tends to aggressively increase its customer numbers in times of pricing flux by undercutting the competition in terms of pricing. We have seen this at least once before, and we believe that much more recently, such as last year, we saw this happen again. As Admiral grows these customer numbers, it increases not only its profit from underwriting but also these ancillary sources.

There are three factors causing flux in U.K. motor insurance prices: emerging from lockdown, regulatory pricing review, and regulatory restructuring of claims. These are all affecting motor insurance prices and giving Admiral Opportunities to undercut the competition and expand its customer base.

We believe consensus completely ignores this dynamic of customer growth at Admiral, and on this

Element we are very different. Our estimates for customer numbers are only three fourths of the numbers that investors witnessed during the last global financial crisis, but we are still well over double the 590-basis-point average annual customer growth as per Visible Alpha consensus.

Company Profile

Admiral is a personal lines insurer that writes most of its business in the United Kingdom. The company operates three business divisions: U.K. insurance, international car insurance, and other. This is a reduction from four since April 2021, when new CEO Milena Mondini de Focatiis announced the sale of Admiral’s price comparison businesses within Penguin Portals. This included www.confused.com, www.rastreator.com, www.lelynx.fr, and the group’s technology division, Admiral Technologies. The sale excluded Admiral’s U.S. price comparison business, www.compare.com. The total net transaction value was GBP 460 million, which Admiral intends to return to shareholders.

(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.

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Global stocks

PetroChina and Sinopec Guides Significant Improvement in 1H Earnings; Positive Readthrough for CNOOC

Overall, the sector is still undervalued but our preferred pick is CNOOC, given its upstream focus and cost efficiency with all-in cost of below USD 30 per barrel. Higher oil prices should be positive for oil producers, this could be negative for PetroChina’s and Sinopec’s downstream operations, especially if the government decides to delay price hikes for refined products to prevent inflation. The better earnings are widely expected by the market, given that the weak results in 2020 were due to lower oil prices and COVID-19 disruptions. PetroChina and Sinopec attributed the improvement to recovery in prices and demand for oil and gas products, as well as stringent cost controls.

Oil prices are likely to remain elevated (above midcycle price of USD 60 per barrel for Brent) for at least another 6-12 months, in our view, as supply/demand dynamics support current price levels. All is going according to plan with a continued vaccine rollout, decline in infections, and recovery in demand. On the supply side, an accelerated return of Iran volumes continues to pose a risk, but we still see the situation as manageable.

Company Profile

China Petroleum & Chemical, or Sinopec, is one of China’s national oil companies and one of Asian’s largest integrated oil companies in terms of revenue. Its income is derived primarily from refining and marketing of oil products and petrochemical production. Sinopec has China’s largest petrol station network with over 30,000 stations and enjoys significant market share in petrochemicals. Established in 2000 by China Petrochemical Corporation, a state-owned enterprise and majority shareholder, the company also owns oil and gas assets in Shandong and Sichuan provinces. It has a smaller global upstream presence than peers PetroChina and CNOOC.

(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
Technology Stocks

The Semiconductor Shortage Is Holding Back Ford’s June Sales

The semiconductor shortage ravaging the auto industry should bottom out in mid-2021, so gradual inventory improvement throughout the year, though a full recovery to take until 2022 or even 2023. The good news is that demand is excellent, with many consumers ready to spend money after holding back vehicle spending last year due to the pandemic.

Ford reported June sales on July 2 that showed the semiconductor shortage is hurting it notably worse than the rest of the industry. Management has repeatedly cited the impact of the Renesas plant fire in Japan as a major problem for Ford. June sales fell year over year by 26.9%, which far underperformed the industry’s 17.8% growth. We don’t see Ford having poor demand. The problem is low supply caused by the semiconductor shortage. With time Ford’s sales to be stronger in the second half of 2021 than the first half. First-half sales rose by 4.9% versus first-half 2020 (which is an easy comparable due to the pandemic), with about equal growth at the Ford and Lincoln brands. The 4.9% lags GM’s first-half 2021 growth of 19.8%. Ford’s first-half volume is down by about 20% from the first half of 2019. The best bright spot in Ford’s June sales is the Lincoln Navigator SUV, which grew volume by 15.5%. Lincoln’s SUVs had a first half of the year sales record, with retail channel sales up 23.3% year over year. June F-Series sales fell by 29.9%, and the company now has over 100,000 reservations for the all-electric F-150 Lightning due next year.

Company Profile

Ford Motor Co. manufactures automobiles under its Ford and Lincoln brands. The company has about 14% market share in the United States and about, 7% share in Europe. Sales in North America and Europe made up 69% and 19.5% of 2020 auto revenue, respectively. Ford has about 186,000 employees, including about 58,000 UAW employees, and is based in Dearborn, Michigan.

(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.