Where to start with a busy time ahead? Well, first thing to report is that editor-in-chief Alan Kohler will be back with us next week – with his "comeback" Saturday email due with you on March 19…that also means that Robert Gottliebsen’s last Saturday email will be this weekend…welcome back Alan (isn’t long service leave a wonderful thing?) and thanks in spades to Robert who can "lie in" on Saturday mornings soon, (Robert will be returning to his regular Wednesday column spot).
Next week we also have two key live webcast interviews on the calendar with Manny Pohl, founder of Hyperion Asset Management and now manager at Flagship Investments on Wednesday March 16 at 9:00am, and a doyen of small cap investing – Michael Glennon on Friday March 18 at 11:00am. Both these sessions will be hosted by Mitchell Sneddon.
One more thing: We’ll have the "brains trust" in the studio on Thursday March 24 when I will be grilling the Eureka analyst team live on the performance of our model portfolios across the results season: Don’t miss this key webcast with James Samson, Simon Dumaresq and Mitchell Sneddon.
Growth First model portfolio
The best performer from reporting season has been Vita Group (VTG), with chief executive Maxine Horne, perfecting the art of under-promising and over-delivering. We brought VTG into the portfolio at $1.70, and today at $2.95 it now makes up 10.3 percent. As such we will most likely look to re-balance this next week. As discussed last week, we sold GWA at the open price of $2.31 last Tuesday morning increasing our cash balance. We are monitoring the progress of Empired (EPD) closely, with the company trading on a FY17 PE of 4, albeit with greater risk due to elevated debt levels, and a management team that has failed to deliver.
Income First model portfolio
Last week saw continued healthy performance from the Income First model portfolio in a market that posted a very strong week.
The banks rallied, with ANZ leading the charge lifting by 10.9 per cent and NAB higher by 9.1 per cent over the course of the week. The rally in banks is indicative of our continued view that the banks are risky at present and volatility may continue.
This strength in the banks was somewhat offset by an announcement from TTS that it was unsuccessful in its pokies licence compensation case. This saw an underperformance in TTS over the course of the week, but we remain comfortable holding the stock in the model.
- James Samson
LIC model portfolio
There are no changes to the LIC model portfolio this week, in a slow few days for news. Magellan Flagship Fund (MFF) released its monthly update to the market. As per usual the update was filled with a calm rationale that we have become accustomed to.
Chief Investment Officer Mackay reiterates the focus on companies with sustainable competitive advantages and remains wary of companies that offer out of favour value plays. If this all sounds a bit repetitive that’s because it is. And this is what you should want to hear from your portfolio manager. It shows they are sticking to their investment philosophy – which is why you invested with them in the first place. Click here to read the announcement.