We're getting record numbers at our webcasts and I'm not surprised with the quality of these events. The main event this week will be hosted on Thursday at 1pm by Alan Kohler with brightday's Kirstie Spicer and Eureka Report's LIC expert Mitchell Sneddon. The panel will examine what we can learn from the Future Fund... remember the Future Fund recently pulled in an annual return of 11.6 per cent, double the average of the Australian superannuation industry (to read more on this issue read Alan’s latest weekend briefing: Central banks are destroying the world).
Also on the webcast calendar on Wednesday at noon will be Mitchell Sneddon interviewing our income analyst James Samson who will be reviewing his portfolio and no doubt echoing his concerns over the future of bank dividends. (You can read James on bank dividends in today's lead story: Bank dividend risks: What to do.)
The small caps CEOs are virtually queueing at the studio door this week to be interviewed by Alan Kohler. On Tuesday at 2.30pm we have Richard Caldwell of renewable energy supplier Dyesol, who will be talking about his plans for using a government grant to develop solar cells. On Wednesday at 2.30pm we get to meet Paul MacLeman chief executive of IDT Australia, the pharmaceutical company and drug developer and on Thursday at 10 am we have Jeffery Cheetham the chief executive of SDI Ltd, a company that manufactures what it describes as a “range of innovative dental products”.
One last thing: If you've been missing our international stocks analyst Clay Carter, he's on a cycling tour of Central America, probably puffing his way up a hill in Guatemala as we go to publication! He'll be back next week.
Meanwhile, here’s what our analysts have been up to during the last week:
Growth First model portfolio
The Growth First model portfolio is progressing well. Its stocks gained an average of 1.8 per cent last week, handily outperforming the S&P/ASX 200 index which fell 0.2 per cent over the week.
The bulk of that performance came from NetComm Wireless (NTC) which surged by 13.4 per cent over the week. Investors seem willing to bid up the stock due to the possibility of news on NetComm’s expansion into the US.
Tox Free Solutions Ltd (TOX) also enjoyed a strong week on the back of Wednesday’s operational update. Over the week its stock rose by more than 7 per cent on news that stable trading conditions and cost reductions are supporting earnings growth.
Capitol Health Ltd (CAJ) dragged on our portfolio performance as investors mulled the potential for Medicare cuts to harm Capitol’s business. We believe these fears are overblown and view CAJ as an attractive proposition at these levels.
The short-term performance of growth stocks can be erratic and volatile. It’s rare for a small-cap portfolio to fire on all cylinders at once. Holding a range of promising stocks is the path to the best potential rewards while taking the least overall risk.
Finally, Ridley Corporation (RIC) trades ex-dividend on October 22. To earn the 2c per share dividend, buy Ridley before Thursday.
-- Tim Dohrmann
Income First model portfolio
The Income First model portfolio posted a solid week, lifting slightly on a strong close to the market last week. The portfolio is edging back towards break even, with a loss of around 1 per cent if we include dividends (slightly over 2 per cent on price alone). This has coincided with a recovery in the overall market, and pleasingly, the stocks in the portfolio have lifted with a higher level of resilience than the market, somewhat offsetting the sluggishness that a high cash allocation can cause.
From a stock perspective, DWS has been a strong performer, and an earnings guidance upgrade from ASX-listed peer business ASG Group (ASZ) has fuelled the overall sector outperformance. IT services remains a bright spot in the market and I believe there is more positive news flow in that space.
Another bright spot for the portfolio has been the performance of Virtus Health, which has lifted consistently since inclusion. While no new information has flowed to the market, perhaps the perception of risks was previously overstated, and this is normalising now. Speculation of potential acquisition activity in the UK may also have led investor sentiment.
I am comfortable with the portfolio's current position and will look to further add investments in the next few weeks in order to enhance the overall portfolio yield.
-- James Samson
LIC model portfolio
There are no changes to the LIC model portfolio this week.
The portfolio has received the dividends from WAX and MFF and is now awaiting the CDM dividend.
In other news TOP has become a substantial shareholder in the Tasmanian poppy growing business TPI Enterprises (TPE). TPE’s share price has risen substantially since the start of October.
-- Mitchell Sneddon
International model portfolio
There are no changes to the International model portfolio this week.