NAOS Emerging Opportunities Company Limited

Momentum expected in the majority of the company’s core investments: NAOS Emerging Opportunities Company Limited (ASX: NCC) based in New South Wales, Australia, is an investment company. The company has a market cap of ~$62 million as on 4 April 2019. The company has recently stated that Mr. David Rickards & Mr. Sebastian Evans who held 715,723 & 1,219,510 Ordinary Shares, respectively had acquired 22,843 & 10,746 Ordinary Shares through participation in Dividend Reinvestment Plan (DRP) for a cash consideration of $1.09120 as on 27 March 2019. Hence, after this development, Mr. David Rickards & Mr. Sebastian Evans hold 738,566 & 1,230,256 ordinary shares, respectively. The Company also announced its half-year result for the six months to 31 December 2018, reporting an after-tax loss of $6.19 million. The poor performance of the NCC portfolio was on the back of clear short-term negative earnings surprises from three core investments and a noticeable lack of investor appetite for investing in micro-cap businesses, leading to a significant valuation de-rating.
 

NCC’s Dividend profile (Source: Company Report)
 
What To Expect From NCC: The company remains focussed on protecting investor capital whilst providing long-term capital growth above the benchmark index.It is the aim of the Board to continue to be mindful of giving shareholders a sustainable stream of growing fully franked dividends.

Meanwhile, the stock has fallen by 19.77% in the past six months. The company has been providing a decent income to its shareholders by way of distribution which is evident from the annual dividend yield of 7%. Considering the above factors, we maintain our “Speculative Buy” recommendation on the stock at the current market price of $1.050 per share (up 1.449% on 04 April 2019).
 

Clime Capital Limited

The Release of Interim Portfolio Valuation Update:Clime Capital Limited (ASX: CAM) had recently stated that at the close of business on 29 March 2019, the gross assets value of CAM’s investment portfolio stood at approximately $105.4 million (Cum-Dividend). CAM accrues interest at around $110k per month until paid each quarter. During the month, the Company paid $0.3 million as a quarterly interest payment to the Company’s Convertible Noteholders for the period 1 December 2018 to 28 February 2019.

The company had earlier announced that they had witnessed interim financial loss after tax which amounted to $5.2 million for the half-year period to 31st December 2018. The result was indicative of the adverse market price movements of CAM’s listed share portfolio in the six months and specifically over the December quarter.

The Board of CAM has declared a March 2019 quarter (interim) dividend of 1.25 cents per share fully franked.The dividend will be paid on 26 April 2019. The dividend represents a 2.5% increase on the dividend declared in the previous corresponding quarter.



1HFY19 Financial Highlights (Source: Company Reports)

In the NTA report for January 2019, the management has stated that there are prospects that global market volatility would last for a while longer as asset markets adjust to an incrementally higher cost of money. However, management added that they are impressed with the range of investment opportunities still available for long-term capital.The company’s view revolves around the fact that the market environment remains supportive of steady but not spectacular growth.

Meanwhile, in the span of the previous six months, the company’s stock had delivered the return of -6.88%. However, the stock performance improved over the last three months to provide a capital return of 4.14%, exhibiting the stock’s volatile nature.Hence, considering aforesaid facts and current trading level, wemaintain our “Speculative Buy” recommendation on the stock at the current market price of A$0.900 per share (up 2.273% on April 04, 2019).  
 

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