It’s been a very demanding year for investors on the ASX and we’re delighted we took the initiative to direct our subscribers away from “index-hugging” and towards selected stocks in both home and overseas markets. It will be very interesting indeed to match the performance of our in-house analysts against the wider market as the year comes to a close… and in fact we have a plan to get them all into the studio for a major webcast. The date is Wednesday December 9, so put it in your diary and we’ll tell you more as we get closer to this event.
This week we’ve already had two CEOs in the studio talking with Alan Kohler: You can access both these interviews on the website quite easily here for Stuart Stoyan chief executive at peer-to-peer lender MoneyPlace who is planning to hit the market with a new retail product around March next year and here for Alan’s interview with Martin Mercer the chief executive of Melbourne IT, the web services company with a long history and a challenging future.
Later this week don’t miss the latest update on our Growth First model portfolio with Tim Dohrmann on Wednesday at midday: Among the stocks which will definitely come up for discussion is our favourite logistics group Qube which has catapulted into the public eye with its remarkable attempt to gatecrash the takeover bid by Canada’s Brookfield of Asciano. You can read a lot more about Qube in tonight’s lead feature here.
Meanwhile, here’s what our analysts have been up to during the last week:
Growth First model portfolio
There are no changes this week to the Growth First model portfolio. Last week saw the stocks in the portfolio shed 3.4 per cent, while the S&P/ASX 200 index lost more than 1 per cent.
The main source of the drag came from GWA Group (GWA) which tumbled after it revealed lacklustre sales growth in the first quarter of FY16. There will be weeks when our growth stocks make large moves, and minimising the downside risk that comes with that is why we recommend the small stock weightings and cash allocation that you see in our model portfolio.
Today we reiterate our buy rating on Qube Logistics in the wake of its dramatic intervention in the takeover battle for Asciano (AIO).
-- Tim Dohrmann
Income First model portfolio
This week, the Income First model portfolio continued to perform well. The pleasing aspect of the week was that the portfolio drew in some additional income receivables as both NAB and ANZ started trading on an ex-dividend basis. This takes the dividends for the portfolio to $1370.91 over the course of the last 4 months (since portfolio inception). While the yield run rate for FY16 is a little low, this is because the portfolio was invested over time, with most of the investment coming after the August reporting and dividend period. Looking forward, the portfolio is on track to a gross yield of around 5.5 per cent (despite the portfolio only being 64 per cent invested).
In terms of recent share price movements, the portfolio has continued to perform well, with the exception of DSH. We believe that for now DSH has found stability, and any potential upside will come from the company’s next financial report. This will be crucial as it will include the impact of the Christmas trading period.
Otherwise, prices remain solid. GEM appears to be recovering from what can only be described as heavily oversold levels. With a dividend approaching again and a new chairman to be appointed there are near term upside catalysts.
I remain comfortable with the current portfolio mix, but will add further investments to boost the dividend yield into the future.
-- James Samson
International model portfolio
There are no changes to the International model portfolio this week. I will be reporting on earnings next week.
-- Clay Carter
LIC model portfolio
There are no changes to the LIC model portfolio this week.
Last week BKI had its AGM and made mention of $660k of special dividend income it anticipated to receive for the first half of FY16. BKI also put out a copy of the presentation and it makes for good reading. The presentation highlights the key thematics and companies the managers are buying to gain exposure to those thematics. It's well worth a read so click here to view it.
-- Mitchell Sneddon