The next two weeks are big for our model portfolios, with several companies delivering six month results (you can keep track with James Samson's reporting season calendar - click here). Don't forget to visit the Eureka Interactive tab later this week to register your interest for upcoming interviews - Thursday week (February 25) we have IVF provider Virtus Health in the studio, while Mitchell Sneddon will sit down with Cadence Capital's Karl Siegling to get his view on this market.
Missed last week's estate planning webcast? Visit our on-demand library at any time to watch recordings of our events whenever you like. It's a great resource - hundreds of insights from our leading analysts, CEOs and managers, all at your fingertips.
- James Kirby
Growth First model portfolio update
The volatile market hit our Growth portfolio last week with an approximate 3 per cent decline. The highlight was the solid result from DWS. The stock is still trading at a large discount to our valuation and confirmed a 4.8 per cent interim dividend.
This week we have results due from GWA (Tuesday), Ridley (Wednesday) and Netcomm (Friday). That leaves seven of our growth first stocks to report in the final week of February.
Income First model portfolio update
This week, the income first model portfolio continued to perform as expected. The main event for the week was the half-year report from DWS Limited, which reported a strong rebound in profit and a 4.75c fully franked interim dividend.
Last Tuesday, the portfolio sold its holding of CYB – owned as a result of the NAB demerger, adding to the funds to the portfolio cash balance. You can read more about this decision here: Our plan with NAB and Clydesdale.
This week we expect to see financial results from FXL, WLL, TTS and AHG – these stocks will likely be the main drivers of performance.
- James Samson
LIC model portfolio update
There are no changes to the LIC model portfolio this week. Last week was testing for the portfolio with key positions pulling back. Most notable was the portfolio's position in Magellan Flagship Fund (MFF).
The pull back in MFF is a reflection of weak markets and not the business performance of the underlying holdings. It is a timely reminder investing is a long-term pursuit. When a quality portfolio like MFF is sold off, it provides investors with the chance to redeploy capital for the long term good of their portfolio.
PM Capital Asian Opportunities Fund (PAF) remains undervalued. At the time of writing the portfolio is trading at a 20 per cent discount to NTA. Given fears surrounding the China economy I doubt this gap will be closing any time soon but the management team at PAF will continue to focus on individual businesses and not short-term fluctuations.
Perpetual Equity Investment Co. (PIC) released a monthly update on Friday (February 12). Key updates included the thought process behind PICs now largest investment Woolworths Limited and also a reminder the portfolio still holds 15 per cent of the portfolio in cash. Click here for the full update.
While the fluctuations are unpleasant we remain unfazed and let the underlying managers do what they do best. And if there is spare capital blocking out the noise and averaging down will prove beneficial in the long term.
- Mitchell Sneddon