Stocks’ Details

Clime Capital Limited

Strong Investment Performance Across the Portfolio: Clime Capital Limited (ASX: CAM) is engaged in investment in securities, listed on domestic & international securities exchanges and selected unlisted unit trusts.

Takeover Update: The company recently updated that it commenced the compulsory acquisition of the shares held by the non-accepting of CBG Capital Limited shareholders. Value of the company’s combined gross portfolio at the close of business on 23 September 2019, exceeded $141 million.

Dividend: The company recently declared a dividend amounting to AUD 0.01250 per ordinary share that will be paid on 25 October 2019.

Portfolio Update: Net tangible assets before tax for the month of August stood at $0.94, as compared to $0.96 in July 2019.At the end of August, total portfolio including cash was valued at $107.9 million. Pre-tax net return for the portfolio stood at -1.5%, as compared to a return of -2.4% return for the S&P/ASX200 Accumulation Index and -2.2% return for the S&P/ASX All Ordinaries Accumulation Index.


NTA (Source: Company Reports)

At the end of August 2019, the company’s top 3 holdings comprised of Westpac Banking Corporation Limited, Amcor Limited and BHP Billiton Limited. In terms of percentage of gross assets, the company holds 5.3% in Westpac, 5.2% in Amcor and 5.1% in BHP.

Stock Recommendation: The stock of the company generated negative returns of 0.54% and 2.63% over a period of 1 month and 3 months, respectively. Portfolio return for August 2019 was supported by TWE and CSL, producing strong FY19 results amongst the large cap sub-portfolio companies. Within mid cap sub-portfolio, APT reported a decent result with key metrics exceeding expectations. A sound financial result by CCP also contributed to the portfolio return. Contribution within the small cap sub-portfolio was led by JIN, EOS and LOV. The company updated that the investment performance of the portfolio was strong in actual terms and in relation to the market indices. Moreover, the company expects a range of attractive investment opportunities over the coming period. Considering the aforesaid facts, we give a “Buy” recommendation on the stock at the current market price of $0.935, up 1.081% on 27 September 2019.
 
 

NAOS Emerging Opportunities Company Limited

Portfolio displays Significant Growth Potential for FY20: NAOS Emerging Opportunities Company Limited (ASX: NCC) is an investment company with a portfolio comprising mainly of Australian listed equities which are not included in the S&P/ASX 100 Accumulation Index. The company recently updated that the shareholding of Managed Accounts Holdings Limited reduced to 5.55%, from 6.57% earlier.

Portfolio Update: As at 31 August 2019, the company reported pre-tax net tangible assets of $1.10 and post-tax net tangible assets of $1.12. During the month of August 2019, the company’s investment portfolio returned 2.86%, bringing the inception return over the past 6 years and 7 months to 12.34% per annum. Amongst the companies in its portfolio, Enero Group and BSA Limited reported standout results. Enero’s performance was mainly driven by the US operations, particularly from significant momentum in the technology PR business.


Performance as at 31 August 2019 (Source: Company Reports)

Stock Recommendation: Over a period of 6 months, the stock generated negative returns of 1.89%. In August 2019, returns from the company’s portfolio outperformed the benchmark S&P/ASX Small Ordinaries Accumulation Index. While the portfolio reported a positive return, the index fell by 3.85%. Most significant gains came in from BTC Health, BSA Limited and Enero Group. Post the release of FY19 earnings of majority of the companies in the portfolio, the results displayed a significant growth potential for FY20. Given the backdrop of the above factors, we give a “Buy” recommendation on the stock at the current market price of $1.090, up 4.808% on 27 September 2019.
 

WAM Capital Limited

History of Fully Franked Dividends: WAM Capital Limited (ASX: WAM) is primarily engaged in investment in listed companies.
Investment Update: As at 31 August 2019, the company reported net tangible assets before tax amounting to 188.78 cents. Value of NTA after tax was reported at 191.30 cents. At the end of the period, the financial sector formed majority of the portfolio at 20.5%, followed by consumer discretionary sector at 15.1%. Some of the top investments of the company included AMA Group, AP Eagers, Afterpay Touch, Bapcor, Credit Corp Group and REA Group.

Since inception, the company has paid dividends of 230.75 cents with a history of fully franked dividends.The company’s portfolio has generated returns of 16.7% since inception. Portfolio outperformance during the month was characterised by a significant contribution from Credit Corp Group and AP Eagers Limited. Another significant contributor to the business was Kogan.com Limited that reported 16.0% growth in EBITDA.


Portfolio Performance (Source: Company Reports)

Stock Recommendation: The stock of the company generated returns of 6.64% and 10.84% over a period of 1 month and 3 months, respectively. In August 2019, returns on the company’s portfolio outperformed the S&P/ASX All Ordinaries Accumulation Index by 1.7% and S&P/ASX Small Ordinaries Accumulation Index by 3.4%. Since inception, outperformances in comparison to both the indices were reported at 8.1% and 11.2%, respectively. The market-driven portion of the investment portfolio benefitted from Kogan.com’s performance in FY19. In addition, the company sees a strong potential for growth in future and is well placed to reap the benefits out of the online shift for the retail industry. Considering the above factors, we give a “Buy” recommendation on the stock at the current market price of $2.260, up 0.444% on 27 September 2019.

 
 Comparative Price Chart (Source: Thomson Reuters)

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