WAM Global Limited

Portfolio Update of WGB in August 2019:WAM Global Limited (ASX: WGB)is an investment management company with global and Australian equity market expertise. The market capitalisation of the company stood at A$450.72 million as on 19^th September 2019.

The WAM Global Investment portfolio increased by 1.8% in August 2019, outperforming the MSCI World Index (AUD) that increased by 0.2% and the MSCI World SMID Cap Index in AUD terms which fell by 0.7%.The best performing sectors were consumer staples, real estate and utilities, while energy, financials and materials underperformed.


Performance of Portfolio (Source: Company Reports)

Financial Highlights for FY19: WAM Global Limited reported an inaugural operating profit before tax of $24.8 million and an operating profit after tax of $17.5 million for the period ended 30 June 2019. The investment portfolio increased by 7.1% during the period from inception to 30 June 2019 and it was achieved while holding an average of 26% of the investment portfolio in cash.

WAM Global Limited’s NTA (net tangible assets) before tax increased 5.2% for the period ended 30 June 2019. The NTA after tax increased 3.6% for the period ended 30 June 2019, with the corporate and deferred tax provision for the period ended 30 June 2019 being the difference between the before and after tax NTA performance. When paid, the franking credits attached to corporate tax payments are available for distribution to shareholders through fully franked dividends.

Outlook for 2020: WAM Global Limited has entered the 2020 financial year with a conservative balance sheet, nil debt and a flexible and proven investment approachwith the patience and expertise of an experienced investment team. The company will continue to seek opportunities irrespective of market conditions and will remain well-positioned to capitalise opportunities.

Stock Recommendation:On the stock performance front, it produced returns of 4.41% and 8.12% in the last one month and three months, respectively. The company has declared an inaugural fully franked dividend of 2.0 cents per share. Therefore, considering the above-stated facts and decent dividend-related parameters, we give a “Buy” recommendation on the stock at the current market price of A$2.140 per share, up 0.469% on September 19, 2019.
 

WAM Capital Limited

Portfolio Update of WAM in August 2019:WAM Capital Limited (ASX: WAM) is one of Australia’s leading Listed Investment Companies which is managed by Wilson Asset Management. It provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies. The market capitalisation of the company stood at ~A$1.62 billion as on 19th September 2019.

WAM Capital investment portfolio decreased by 0.5% as compared to S&P/ASX All Ordinaries Accumulation Index which fell by 2.2% in the month of August 2019.


Performance of Portfolio (Source: Company Reports)

Financial Highlights for FY19: WAM Capital Limited reported an operating profit before tax of $6 million and an operating profit after tax of $14.5 million in FY19.The after-tax figure was boosted by a $8.5 million income tax benefit delivered through franking credits received on franked dividend income from investee companies.

WAM Capital Limited’s NTA before tax decreased by 1.3% in the 12 months to 30 June 2019, including the 15.5 cents per share in fully franked dividends paid to shareholders during the year.This decrease was after corporate tax paid of 6.3 cents per share or 3.1% during the year. Corporate tax payments made throughout the period were the major item of difference between the investment portfolio performance of 2.0% and the net tangible asset performance.

Outlook for 2020: The preservation of shareholder capital is a key focus of investment process for the company and with a cautious approach, it will continue to identify the opportunities in the market. It was mentioned that the company remains cautious about the direction of the Australian market. The investment portfolio’s cash level ended the year at 25.3%. Additionally, it can be said that the company’s performance would be sensitive to the performance of its portfolio companies and to the overall health of the global economy.

Stock Recommendation:The company has declared a fully franked dividend of 7.75 cents per share which brings the full year dividend of 15.5 cents per share. On the stock performance front, it produced returns of 8.13% and 11.33% in the past one month and three months, respectively. Based on the foregoing, we give a “Buy” recommendation on the stock at the current market price of A$2.270 per share, up 0.442% on September 19, 2019.

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