Contango Microcap Ltd

CTN Details

Ongoing investments in micro-cap stocks:Contango Microcap Ltd (ASX: CTN) reported that their Contango Microcap Fund returned +0.3% for September month as compared to the Small Ordinaries Index return of +1.3%.  On the other hand, their Small Resources delivered a decent increase of 2.4% against the Small Industrials’ return of 1.0%. Their A2Milk stock delivered outstanding returns of 16.2% during the month. But this performance was offset by the weak performance of Blackham, Catapult, Mod Resources and Cogstate which lost over 27.0%, 23.2%, 15.0% and 13.0%, respectively.

 
September performance highlights (Source: Company reports)

However, the group continues to invest in a diversified portfolio of ASX listed micro-cap stocks with a market cap of between $30 million and $350 million. Further, the group seems to have a reasonable profit reserve cover of 1.8 years and the performance in recent months has also been improving over the past. We give a “Buy” recommendation on the stock at the current price of $ 0.91


CTN Daily Chart (Source: Thomson Reuters) 

Contango Income Generator Ltd

CIE Details

Diversified portfolio:Contango Income Generator Ltd (ASX: CIE) underperformed in the month of September with the CIE portfolio delivering only 0.01% returns over the month, against ASX All Ords Accumulation Index return of 0.05%. On the other hand, CIE returned 1.5% against the index return of 1.0% for the quarter, while generating returns of 8.4% as compared to 8.5% of the index for the year. On the other hand, the group was able to generate strong stock returns of 10.1% as compared to the market rise of 8.0% since inception. The group has a good dividend policy to pay a minimum of 6.5% per annum on Net Tangible Asset Value.

Decent performance (Source: Company reports)
 
Along with the sustainable dividend, CIE has a profit reserve coverage at 1.4 years. It has also generated a decent portfolio return on a 12 months basis with many holdings in companies that deliver stable, relatively attractive dividends. CIE’s stock delivered over 4.2% returns in the last three months (as of October 06, 2017) whilewe give a “Speculative Buy” recommendation on the stock at the current price of $ 0.98


CIE Daily Chart (Source: Thomson Reuters)

Westoz Investment Company Ltd

WIC Details

Highly concentrated resource sector portfolio: Westoz Investment Company Ltd (ASX: WIC) improved their NTA before tax to 113.4 cents for the week ended on October 03, 2017 as compared to 110.1 cents for the week ended at September 26, 2017. Their September quarter delivered a decent rise of 1.0% boosted by dividends payments wherein dividends accounted over 1.3% indicating a small loss of 0.3% in capital value. NRW Holdings and Cedar Woods Properties account for over 11% and 9% of the group’s portfolio. NRW Holdings Limited delivered returns of 86% while Beach Energy generated 45% returns which have been the major drivers for the group’s September quarter performance. WIC stock delivered 6.8% returns in the last three months (as of October 06, 2017). On the other hand, the group’s portfolio is mainly concentrated on the resource sector and given the volatility of the sector, we believe that risk from a downturn in the sector prevails. Further, the group’s 5-year portfolio return is just 3.3%. We rate the stock “Expensive” at the current price of $ 1.02


WIC Daily Chart (Source: Thomson Reuters) 

Hunter Hall Global Value Ltd

HHV Details

Solid dividend yield:Hunter Hall Global Value Ltd.’s (ASX: HHV) stock corrected over 3.8% this year to date (as of October 06, 2017) as their portfolio performance was impacted by the currency fluctuations. The group’s stability also appears to be back on track with the merger of its Manager with Pengana Capital and re-establishment of the portfolio. Further, it is estimated that the group has over six years of profit reserve cover. During August, the group’s portfolio delivered 1.22% returns as compared to the benchmark returns of 0.8%.

Net Tangible Asset Value as at September 30, 2017 (Source: Company reports)

Major driver for the positive performance is their stock selection, while the group’s cash holding was the major drag on relative performance. The group holds major firms like Novo Nordisk, Apple, American Express and Celgene Corporation in their portfolio. Trading at a solid dividend yield, we give a “Speculative Buy” recommendation on the stock at the current price of $ 1.13


HHV Daily Chart (Source: Thomson Reuters)

WAM Capital Ltd

WAM Details

Outperforming index since inception: WAM Capital Ltd (ASX: WAM) continued to outperform the S&P/ASX All Ordinaries Accumulation Index, by generating 0.9% returns in the August month. The group outperformed the index by 9.4% since its inception as of August 2017. 
 
Stable long-term performance (Source: Company reports)

WAM has been a strong dividend player and announced a fully franked final dividend of 7.5 cents per share, leading to the total franked full year dividend to 15.0 cents per share. The final dividend would be paid on 27 October 2017 while the group’s dividend reinvestment plan (DRP) would be at a 2.5% discount for the final dividend. Trading at a strong dividend yield and slightly high levels, we maintain a “Hold” recommendation on the stock at the current price of $ 2.51


WAM Daily Chart (Source: Thomson Reuters)

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