WAM Leaders Limited

Subdued Investment Returns in November: WAM Leaders Limited (ASX: WLE) is a subsidiary of Wilson Asset Management providing its investors with diversified exposure to a portfolio comprising of companies within the S&P/ASX 200 Index, which are undervalued and have excellent growth opportunities. It also offers an opportunity to invest in large-cap companies with mispricing in the market. The objective of the fund is to generate franked dividends, along with capital preservation and appreciation over the medium to long-term. Matthew Haupt is the lead portfolio manager.

As per the investment updates of November 2018, the investment portfolio decreased by 3.3% with the fall in gross assets from $802.4 Mn in October to $774.8 Mn in November. The overall index i.e., S&P 200 Accumulation Index had plunged by 2.2% during November making WLE underperform the market by 1.1%. The fall was on account of volatility in the Australian equity market. Evolution Mining (ASX: EVN) and Commonwealth Bank (ASX: CBA) were the outperformers of the portfolio because of better earnings guidance for the coming period. On the other hand, Woodside Petroleum (ASX: WPL), Aristocrat Leisure (ASX: ALL) and BHP Billiton (ASX: BHP) were the underperformers of total portfolio The Net Tangible Assets (NTA) after tax plunged from 112.52c to 109.89c with a dip of 2.3% during November over the prior month. The market call also decreased $21.1 Mn with a fall of 2.7%. WLE’s gross assets on 30 November 2018 were clocked at $774.8 Mn, of which 89.3% of the assets were allocated to listed equities and 10.7% to fixed interest & cash investment type. The company has a market cap of $749.9 Mn as on December 17, 2018.


Investment Performance (Source: Company Reports)

Meanwhile, the share price has fallen $12.70 in the past three months as on December 14, 2018 and trading at reasonable PE multiple of 8.530x. Over the past one month, the price has dropped by 4.05%. The stock has breached its all-time low of $1.06 and create a new low price of $1.045 on 10 December 2018 reaching its lower end of the Bollinger band. It can be anticipated that the price may rise in the short term but may fall further after that until and unless WLE makes a strong move. On the analysis front, WLE looks impressive with Net Margin at 64.8% in FY18 compared to 60.5% in FY17. Return to the shareholders has also been good with ROE coming in at 11.4%. We, therefore, recommend ‘Speculative Buy’ on the stock at the current market price of $1.070.
 

 Hearts and Minds Investments Limited

Update on November Month’s Pre-tax NTA: Hearts and Minds Investments Limited(ASX: HM1) is an investment company based in Australia. It provides great investment opportunities. Research is done by the leading fund managers in order to maximize shareholder returns. HM1 also provides funding to Medical Research Institutes in Australia to develop new medicines.

HM1 recently reported its November investment updates. It got listed on 14 November 2018 at a price of $2.59 with 95% invested in equities and a reserve of 5% in hand. The fund is diversely allocated to different sectors with the highest allocation to consumer discretionary of about 29%. It had a pre-tax NTA of $2.50 in the beginning. During the month, pre-tax NTA has gone up by 1.27% to $2.5335, and the post-tax NTA has been reported at $2.5223.  Recently, the company disclosed weekly estimated Net Tangible Asset backing (NTA) per share before tax that came in at $2.45 as at 14 December 2018, showing 0.81% down as compared to the previous week which stood at $2.47 as at December 07, 2018.Since it’s been a month only after its listing and some minor ups and downs, the scrip price is almost flat trading at $2.55. Although the price chart depicts the stock in an up-trend, we suggest investors to have a watch over the scrip for another month performance before taking any further long position on the stock.


Cash/equities and Sector Allocation (Source: Company Reports)
 

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.