We hear the word “legend” bandied about a bit too easily in the investment markets but at Eureka Report we have no problem applying the term to Geoff Wilson: The fund manager has topped a career of exceptional achievement with his Future Generation funds which as Mitchell Sneddon writes today (click here) are rewarding for both investors and charitable causes…that’s quite a double act!
Our plan is to follow Mitchell’s feature this evening with a live interview in the studio with Geoff Wilson at 11.45 am on Tuesday. Take the time to read Mitchell’s feature and you will be in an excellent position to send live questions into this Q A which I expect will be one of the most successful of the year.
During the week there is also the chance to hear from Keith Glennan, the chief executive of soon-to-be-listed Tesserent, the technology company which plans to make money from fighting cybercrime. Alan Kohler will be doing a live interview with Keith in the studio at 10am on Tuesday. The Tesserent IPO will be one of the first in the new year with a launch date of February 19…so you’ll have plenty of time to consider its prospects.
Also we were fortunate to have a few hours to digest Malcolm Turnbull’s widely anticipated Innovation Statement today (Monday December 7). For once a politician has added some meaty tax attractions to the endless rhetoric around the nebulous notion of “innovation”.
To hear details on the new tax breaks you can tune into our Eureka Moment video: Certainly with a full exemption from capital gains tax and a substantial tax offset of up to $200,000 a year it’s a development every investor should take the time to examine.
Meanwhile, here’s what our analysts have been up to during the last week:
Growth First model portfolio
The Growth First model portfolio continues to play its role. Its stocks finished last week flat against an S&P/ASX 200 index that dropped by one per cent.
NetComm Wireless (NTC) continues to lead performance, gaining nearly seven per cent over the week, while DWS Ltd (DWS) fell 4.7 per cent as its CFO tendered his resignation. Our portfolio has set a cracking pace into year’s end, banking a total return of around 18 per cent while the broader market has declined by more than five per cent.
We make no changes to the portfolio this week, but in a bid to focus our coverage on the highest-potential opportunities, we downgrade Azure Healthcare (AZV) and Energy Action (EAX) from hold to sell. With today’s update we will cease coverage of both AZV and EAX. You can read our takes on both stocks right here.
-- Tim Dohrmann
Income First model portfolio
The Income First model portfolio is adding to its investments this week, taking a 6 per cent position in insurance broker and underwriting agencies business Steadfast Group (SDF). The position in SDF will assist the portfolio in generating solid income, with the added bonus of a solid growth profile. Our choice of a broking and agencies business in the insurance industry is intentional, and SDF is not a business that takes on traditional insurance risk. Its role is distribution. More on our initiation for SDF can be read here.
Last week the Income First model portfolio underperformed, as DSH caused some negative moves. DSH has been sold from the portfolio now, and we are looking forward to investing in more businesses that will help investors achieve their income first objectives in coming weeks.
Overall, the portfolio remains on track to deliver on all of its original objectives.
-- James Samson
LIC model portfolio
There are no changes to the LIC model portfolio this week. Two quick things to highlight about the portfolio and the LICs: First, PM Capital Asian Opportunities Fund (PAF) is still trading at a nice discount and still represents good value. If you ever wonder what you should be paying for it, just go to the announcements and have a look. The team at PAF tell you every week what it's worth.
Second, tomorrow I have the pleasure of sitting down with Geoff Wilson from Wilson Asset Management and the Future Generation's LICs for another Eureka Interactive. Join us at 11:45am and throw in some questions here. Maybe a good one to start with is: "Why have you been selling down some of your WAX holding?" I'll be asking that one myself. The opportunity for the interview came off the back of a quick chat I had with Wilson last week regarding the sensational performance of Future Generation Investment Company (FGX), which you can read about here.
-- Mitchell Sneddon