Milton Corporation Limited

Acquisition of an unlisted investment company: Milton Corporation Limited (ASX: MLT) has signed an agreement for the acquisition of all the issued capital of an unlisted investment company that has the total assets of approximately $27 million. This is part of strategic investment of MLT and will complement MLT’s existing portfolio. As per the agreement, the consideration for the acquisition will be the issue to the vendors of 5,566,921 new MLT ordinary shares that will not participate in MLT’s fully franked final dividend for 2018. The number of shares to be issued will be determined by reference to the relative net asset backing of each company as at 30 June 2018. Moreover, MLT has announced the increase in the fully franked final dividend to 10.2 cents per share, which will bring the full year dividend to 19 cents per share. The dividend yield of the group is now 3.97%.  In FY 18, the net profit grew 6.2% driven by the growth in the dividend income. Further the company has also received the special dividends of total $1.3 million from Adelaide Brighton, Bank of Queensland, Sims Group and Telstra. In FY 18, the underlying profit for the year increased by 5.6% to $128.8 million. During the full year 2018, the investment portfolio with positions in 26 companies and trusts grew by a total of $70 million. The company made larger investments in AGL, Janus Henderson, Technology One and Woodside Petroleum. The company partly funded the increased investment by disposals amounting to $66 million, including the complete disposals of AMP, BWP Trust, Origin Energy and Fletcher Building. Meanwhile, MLT stock has risen 7.42% in three months as on July 26, 2018  and is trading at a P/E of 24x. As of now, we give a “Hold” recommendation on the stock at the current price of $ 4.800.
 

WAM Research Limited

Decent performance since inception: WAM Research Limited’s (ASX: WAX) portfolio performance has been 18.1% since July 2010 with gross assets of $242.1 million. The group has exposure to diversified undervalued companies, but macro headwinds led the portfolio perform to give returns of 1.1% in last one month (June 2018) while S&P /ASX All Ordinaries Accumulation Index returned 2.9%. However, investment portfolio has grown by 18.1% since inception and delivered returns with less volatility. This compares favorably to the S&P/ASX All Ordinaries Accumulation Index which rose by 9.4%. WAM Research Limited’s parent group has raised more than $330 million from the WAM Global Limited initial public offering (IPO) and the company was lately accepting oversubscriptions of up to $220 million. On the other hand, in United States there is economic tailwind with some mispricing opportunities. In Europe, the political challenges have impacted some quality companies. In Japan, there is recovery after two subdued decades. This may impact the global group’s performance.  Meanwhile, WAX stock has risen 2.63% in three months as on July 26, 2018 and is trading at a P/E of 19.02x (with dividend yield of 5.93%). We give a “Speculative Buy” recommendation on the stock at the current price of $ 1.570 given the potential.

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.