Over the year, Investors Mutual has delivered a 26 per cent return compared to the benchmark's 19 per cent but Simon Conn, the firm's portfolio manager, says picking winners is becoming more difficult, particularly as the economy is not reflecting the growth the market is extrapolating.
Nevertheless, he’s an investor in Prime TV, industrial waste manager Toxfree Solutions, retailer Thorn Group, cinema and hotelier Amalgamated Holdings as well as food maker Goodman Fielder. These companies have “strong recurring revenue and consistent dividends,” says Conn.
Prime TV manages its costs. It is gaining market share at the expense of Ten Network Holdings, he says. Toxfree has robust demand for its services from mining companies operating in Gladstone, Queensland’s Bowen Basin and Western Australia, says Conn.
Demand for rental TVs, furniture, refrigerators and washing machines has benefited Thorn, he says. Amalgamated is debt free and redeveloping its property assets to produce better returns, says Conn.
Goodman Fielder’s Asian business is improving. Its home ingredients business is steady and its bakery unit has been restructured successfully, he says.