Greetings from the middle of the interim reporting season! We're broadly happy with what we have seen so far in profits and revenues from our favourite stocks here at Eureka. However, as you probably know most of our recommended companies are small to medium caps and they don't report until the tail end of the reporting calendar – so we still have a week or two to go before we have a complete picture of the results season.
We'll certainly know where we stand by March 24, so please pencil that date in your diaries for our Interim Results Review webcast - I'll be hosting the event on the day at 12.30 with James Samson, Simon Dumaresq and Mitchell Sneddon. Meanwhile, look out this Thursday at 9:45am for James Samson in the studio for a live webcast with Sue Channon, the chief executive of recently listed Virtus Health: This is one of the most interesting medical stocks to emerge in the local market, it's a multinational specialist in assisted reproduction service and it's fast becoming a key multinational operator in the field. Don't miss it.
Growth first model portfolio update
We have upgraded NTC to a BUY after its interim result, with the stock cheap and multiple catalysts over the next 6-12 months. A big week for the portfolio with over half our "growth first" stocks reporting this week. Tomorrow morning we will add a new 6 per cent position in XTD Ltd (XTD).
To read about the inclusion of XTD in the portfolio this week, click here: XTD enters the Growth portfolio.
Income first model portfolio update
Last week was a busy one in the income first model portfolio. Four companies reported financial results: AHG, FXL, WLL and TTS. On balance, all four reports delivered results that were close to our expectations, and we retain these companies in the portfolio.
FXL’s report included a lower dividend due to the dilution impact of an entitlement offer. This was expected, and dividends are expected to lift in the full year and into FY17. AHG, TTS and WLL all announced dividends that were above the previous year, and are performing well.
This week will witness four further reports for the portfolio – GEM and ARF (which both reported today), as well as VRT and SDF, which are both expected to report financial results tomorrow.
- James Samson
LIC model portfolio update
There are no changes to the LIC model portfolio this week. Coming through reporting season we are seeing a handful of the holdings declaring dividends. Last week we saw Cadence Capital declare a 5 cent fully franked dividend and WAM Research declare a 4.25 cent fully franked dividend. Perpetual Equity Investment Co. chipped in as well, with a dividend of 0.8 cents per share as well.
WAM Research continues to perform well for the portfolio. The latest NTA announcement showed the portfolio as it stood at the end of January and the usually cash heavy LIC had increased the cash position further. WAX now holds 50 per cent of the portfolio in cash. The rest resides in high growth opportunities predominantly outside the ASX200. A very recent success story has been the team's investment in previously unloved The Reject Shop (TRS). TRS jumped recently after a very positive report from the group.
Current Share Price
BKI Investment Company
PM Capital Asian Opp.
Perpetual Equity Investment Co.
*Not including dilution effect of outstanding options