Milton Corporation Limited


MLT Details

Diversified investments:Milton Corporation Limited (ASX: MLT) recently reported that net tangible asset as of August 31, 2016, after provision for tax on unrealized capital gains was $3.81. MLT also reported a 3.5% growth in operating revenue to $132.7 million in FY 16 and a 1.1% growth in the underlying operating profit excluding special investment revenue of $1.5 million to $126.4 million.
 

Dividend History (Source: Company Reports)
 
Moreover, MLT has diversified investments in 93 companies and trusts. This diversification has aided MLT in maintaining the earnings and was able to offset pressure from some sectors which have suffered significant earning reductions. MLT in FY 17 will maintain the ordinary dividend of 18.6 cents per share. Trading at a decent dividend yield, we give a “Buy” recommendation on the stock at the current price of $4.18
 

MLT Daily Chart (Source: Thomson Reuters)
 
WAM Capital Limited


WAM Details

Boosting capital position: WAM Capital Limited (ASX: WAM) has raised capital of $247.2 million via the Share Purchase Plan and placement which got significantly oversubscribed. The capital raising initiatives were undertaken at a premium to the WAM’s net tangible assets (NTA).
 

Performance and NTA result (Source: Company Reports)
 
Additionally, WAM reported an 85.7% increase in operating profit before tax to $132.3 million in FY 16 due to 21.6% increase in the investment portfolio, which outperformed by 19.6%. WAM stock has a solid dividend yield and is still trading at a very cheap P/E. We maintain a “Hold” recommendation on the stock at the current price of $2.27
 

WAM Daily Chart (Source: Thomson Reuters)
 
Contango Microcap Ltd


CTN Details

Turnaround from loss to profit:Contango Microcap Ltd (ASX: CTN) reported that revenues from ordinary activities grew from $2.5m to $30.3m in FY 16 and the profit from ordinary activities after tax took a turnaround from a loss of -$0.7 m to a profit of $15.8m. On the other hand, CTN had signed a contract to sell its fund management operation, Contango Asset Management Limited in June, 2016 while enhanced its stake in Contango Income Generator Limited to 38.4%.
 

FY 16 Financial Performance (Source: Company Reports)
 
CTN stock rose over 25.97% in the last six months (as of September 09, 2016), and has a solid dividend yield while trading at very cheap P/E. CTN would be paying a final dividend of 3.7 cents per share on 14^th October 2016 that is 50% franked. CTN’s NTA after tax is $1.183 in August 2016 against $1.173 of July 2016. We believe there is more upside in the stock and maintain a “Hold” recommendation at the current price of $1.125
 

CTN Daily Chart (Source: Thomson Reuters)
 
Mirrabooka Investment


MIR Details

Portfolio outperformed the benchmark index in the long term: Mirrabooka Investment (ASX: MIR) reported a monthly net tangible asset backing per share of $2.16 after tax for August 2016 over $2.12 for July 2016. MIR earlier reported a 12% increase in the revenue from operating activities to $10.3 million in FY 16 and the profit increased 24.3% to $8.8 million. The increase in profit is due to the increase in dividend income as well as a rise in the contribution from the trading portfolio. In FY 16, the portfolio return was decent to 12.0% and was 15.4% with franking. In addition, the five-year return for the portfolio including franking was 14.9% per annum and has beaten the benchmark return, including franking of 6.4% per annum.
 

Portfolio Performance to 30^th June 2016 (Source: Company Reports)
 
Moreover, MIR raised over $26 million via Share Purchase Plan. In addition, the sale of the residual in holdings that had become top 50 stocks and the takeover of the companies in the portfolio has provided funds for addition of a number of new companies to the portfolio and for the participation in capital raisings, including some IPOs. Meanwhile, MIR stock rose over 6.18% in the last six months (as of September 09, 2016). Trading at a decent dividend yield, we give a “Buy” recommendation on the stock at the current price of $2.76
 

MIR Daily Chart (Source: Thomson Reuters)
 
Contango Income Generator Ltd


CIE Details

Decent performance:Contango Income Generator Ltd (ASX: CIE) reported a monthly net tangible asset of $1.04 after tax for August 2016 over $1.021 for July 2016. CIE strengthened its capital position by raising funds of $70,263,882. CIE began investment activities in August 2015. Despite having a short term experience, the group posted a revenue increase from zero to $4.4 million in FY16 and as a result, the profit after tax grew from zero to $2.7 million.
 

FY 16 Financial Performance (Source: Company Reports)
 
The final dividend at 3.5 cents per share is trading ex-dividend on September 13, 2016. Trading at a solid dividend yield, we give a “Speculative Buy” recommendation on the stock at the current price of $0.99
 

CIE Daily Chart (Source: Thomson Reuters)
 
Glennon Small Companies Ltd


GC1 Details

Focusing on small and micro caps: Glennon Small Companies Ltd (ASX: GC1) had come up with the initial public offering in August 2015 and the company has achieved a gross portfolio return of 15.86%. GC1 sees substantial opportunities in small and micro caps and the twenty largest listed stocks, which includes the major banks, but the top 20 forms less than 1% of the total number of stocks listed on the ASX.
 

Results from Preliminary Final Report (Source: Company Reports)
 
In addition, GC1 after commencing operations on 21^st August 2015 has reported the operating profit before tax including realized and unrealized investment movements of $2,664,000 for the period ended 30^th June 2016. GC1 profit after tax is of $1,956,000. The group expects the interim dividend to substantially increase over the previous interim dividend. GC1 stock offers decent dividend yield and is trading at a very low P/E. We give a “Speculative Buy” recommendation on the stock at the current price of $0.975
 

GC1 Daily Chart (Source: Thomson Reuters)

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