National Storage REIT

NSR Details

Executing a Strong Pipeline of Acquisition Opportunity:National Storage REIT (ASX: NSR) has recently completed the acquisition of or entered into arrangements to acquire eight quality self-storage assets in Australia and New Zealand. The total acquisition cost incurred was approximately $33 million and comprised five centres in Townsville, Queensland and one centre in Mornington, Victoria. The acquisitions will be funded from the company’s existing debt facility. The objective of this acquisition is to expand its footprints in these regions as there is a significant scope for value creation via either growth in occupancy, rate per square metre or expansion potential. Further, the management expects that these acquisitions will reflect the group’s aim to continue to build its presence in major metropolitan and regional markets by generating economies of scale and operational efficiencies from the National Storage operating platform. On the financial front, the group recorded IFRS PAT of $ 59.8 million in 1HFY18, marking the splendid growth of 152% on Year on Year (YoY) basis. Based on the strong first-half year performance, NSR affirms FY18 underlying EPS guidance of 9.6 – 10.1 cps and underlying earnings guidance of $51.5 million to $54.2 million, considering no material changes in market conditions. We expect that the group will continue to successfully execute its growth strategy in a highly fragmented industry, leveraging the fully integrated, scalable operating platform to maximize shareholder return.


Acquisition Update (Source: Company Reports)

On the other hand, BlackRock Group, who is a substantial holder of the company changed its respective holding on May 03, 2018 from 7.82 per cent of the voting power to 6.78 per cent of the voting power. Meanwhile, the stock was up by 3.62% in the last three months as at June 05, 2018 and is trading at a very high price to earnings ratio among its peer group. Hence, we maintain our “Hold” recommendation on the stock at the current market price of $ 1.6.
 

NSR Daily Chart (Source: Thomson Reuters)
 

WAM Capital Limited

WAM Details

Outperforming since Inception: WAM Capital Limited (ASX: WAM) has been performing well since inception while the monthly NTA and investment update for April 2018 was somewhat below expectations. As per the April 2018 report, NTA before tax stood at $1.97 which is slightly down from the March 2018 NTA before tax which was at $2.01.  The investment portfolio returns increased 4.8% in the six months to 30 April 2018, outperforming the S&P/ASX all ordinaries accumulation index which rose by 3.6%. However, the investment portfolio returns for one month as at April 2018 edged up to 0.9% but did not outperform the S&P/ASX all ordinaries accumulation index that rose by 3.5%. The group outperformed the index by 9.2 per cent since its inception as on April 2018. Therefore, we expect that the group will continue to strive towards better performance during the upcoming periods despite short-term headwinds.


Investment Performance (Source: Company Reports)

On the other hand, Wilson Asset Management Group, a substantial holder of Noni B Limited changed its holding on 31 May 2018 from 7.08 per cent of the voting power to 8.22 per cent of the voting power. Moreover, Wilson Asset Management Group, became the substantial holder of Adairs Limited since May 14, 2018 by holding 6.19 per cent of the voting power. The WAM Global IPO was also reported to exceed $330m in terms of capital raising and was oversubscribed. Meanwhile, the share price dipped by 4.07% in the past three months as at June 05, 2018, with many macro factors and portfolio underperformance seen in the month of April, hence we maintain our “Hold” recommendation on the stock at the current price of $2.370 as WAM still has the potential to outperform and maintain its high dividend yield.
 

WAM Daily Chart (Source: Thomson Reuters)
 

WAM Research Limited

WAX Details

Decent Investment Performance since Inception: WAM Research Limited (ASX: WAX) is a listed investment company incorporated in Australia and the fund aims to preserve capital and deliver tax-effective returns. The company has recently revealed its investment update for April 2018. According to the release, the WAM Research investment portfolio for the past six months grew by 4.6% and delivered returns with less volatility as it kept an average cash balance of 34.7%. This compares favourably to the S&P/ASX All Ordinaries Accumulation Index which rose by 3.6%. Since inception, WAX delivered 18.0 percent return which is above the S&P/ASX All Ordinaries Accumulation Index.However, the volatility in the month of April overplayed the performance. On the other hand, the group has maintained its cash-rich position throughout the year which will help to prevent against any tough market condition and provide sufficient opportunity for strategic investment during the same period. We expect that the company will continue to generate high real rate return along with rising stream of fully franked dividend at the back of strong research-driven investment strategy focused on identifying undervalued growth companies.
 

Investment Performance Since Inception (Source: Company Reports)

Meanwhile, WAX stock edged down in the past three months but has been up 3.36% in past five days, as on June 05, 2018 and trading at decent levels as compared to its peer group. Given the strong fundamentals and outlook on global economic growth, we put a “Speculative Buy” recommendation on the stock at the current price of $1.530.
 

WAX Daily Chart (Source: Thomson Reuters)

 
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