Darren Katz, TAMIM Asset Management's Managing Director and Head of Investments, reviews a number of the Stock Picks we have presented over the course of the year to assess how they have fared through the recent reporting season. We review our original investment rationales and try to learn from the mistakes we have made through our investment journey. Overall the year has been very good for our Australian Value and Small Cap strategies. With the Value underlying fund delivering a 13.9% return over the past 12 months and the Small Cap underlying fund delivering a 31.3% return for the same period.
Reporting Season Wrap-up - Part 2 Darren Katz – Head of Investments - 1st September 2016 -
With reporting season over, we bring you the second part of our reporting season wrap-up. Having spent the last 12 months providing you with a number of our best ideas and thoughts around a select group of Australian shares, I thought it was an opportune time to stop and look back at some of these stocks. It is always a good idea when investing to stop and look at your initial hypothesis with a view to learning from the good and bad decisions you have made. This is an extremely important lesson, and acts to make us all greater investors.
DUET Group (DUE.AX) is an owner of utility assets in Australia, the US and Europe. Since listing in 2004, DUE has evolved from being an externally managed asset owner/ investment fund to an internally managed asset owner/operator with an EV of over A$18bn. The catalysts for share price performance include contract wins in the DDG and EDL business units, better-than-expected outcomes from the DBP regulatory reset and United Energy regulatory reset (final decision due imminently). Activity in relation to SKI selling down its stake and potential corporate activity as underbidders in the NSW electricity privatisation process potentially looking to acquire other regulated asset holders were additional catalysts.
DUE reported pleasing results on the 19th of August, the distribution for the year came in at 18c with the net year expected to be 18.5c. Proportionate earnings were 34.5% higher then the previous comparable period. The integration of EDL has been completed and it is apparent that that integration synergies are emerging. The company will continue to search for accretive acquisitions through the forthcoming year.
Joyce Corporation (TAMIM Australian Small Cap IMA): Current Poistion Investment Rationale: Underfollowed, unloved, turn-around story Current Price: $1.49
Read the original article here. Joyce has a strong track record of partnering with businesses. The company acts as a business partner, providing capital and management expertise to good, profitable businesses that currently lack the capital and management to reach the next level. The key in this business partnership is to ensure that the risks and rewards are appropriately shared and incentives are aligned.
Over the last several years, Joyce has been slowly building out a business of considerable scale, with the group’s total network revenue in the home improvement and furniture space now in excess of $125 million. The recent sale of a non-core property asset and the purchase of another property, together with the purchase of an interest in (and subsequent accounting consolidation of) a new business unit, has meant Joyce’s recent financial reporting is messy, and the Joyce story (and its potential) is perhaps poorly understood by the market. We expect the story to become clearer over the coming reporting periods.
Highlights for the financial year ending 30 June reflected a 62.8% increase of revenue to $56.5m. This was reflected in an NPAT from continuing operations of $3.46m. The full year dividend was 11 cents. Primary businesses (Bedshed and KWD) performed better than forecast and the company was also able to acquire Lloyds Online. JYC is forecasting sales of between $170m to $200m through the next financial year.
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