WAM Research Ltd. · ASX:WAX
WAM Research — Investor Presentation (November 2011)
23 slides from WAM Research's investor presentation, Nov 16, 2011
Slide 1: WAM Research Limited (WAX)
WAM Research Limited (WAX) For personal use only
Slide 2: Unchartered Waters
Unchartered Waters For personal use only • The European debt crisis continues to create uncertainty • Widespread sovereign and bank vulnerability in Europe • Some European Governments unable to access capital markets • European stability funds not large enough • Emergence of so called “Zombie Banks”
Slide 3: Current State of Play
Current State of Play For personal use only • Governments in the developed world have to implement austerity measures • The US economy appears to be recovering slowly • Over 25% of US homeowners still having negative equity in their homes • China remains strong with inflation appearing to be under c
Slide 4: Our Funds
Our Funds For personal use only WAM Capital (WAM) WAM WAM Active Research (WAA) (WAX) Market Research Driven Driven 4
Slide 5: Investment Process
Investment Process “Research Driven” For personal use only Identify Company Undertake Detailed Research Visit with Management – 700+ companies p.a. Rank the Company (Rating template) Catalyst identified or occurs Buy or short sell shares 5
Slide 6: Our Business Model
Our Business Model For personal use only Investment Focus ‐ Growth Companies LIC + Experienced Structure team benefits Investment + Flexible + Tight cost Process Mandate control Superior long term = performance record 6
Slide 7: Top Stocks
Top 10 Stocks as at 31 October 2011 For personal use only % Gross Company Assets CNA Coal & Allied Industries Limited 9.2% NAB National Australia Bank Limited* 5.6% MMS McMillan Shakespeare Limited 4.4% APE AP Eagers Limited 4.1% RKN Reckon Limited 3.7% MYS MyState Limited 3.4% BRG Breville Group Li
Slide 8: Coffey International Limited (COF)
Coffey International Limited (COF) For personal use only • Rating: 416.3 • Catalysts: ¾ New Management ¾ Recapitalisation to reduce debt levels • Focus on core businesses • Price to earnings 6x, with EPS growth of 283.8% 8
Slide 9: Australian Power and Gas Company Limited (APK)
Australian Power and Gas Company Limited (APK) For personal use only • Rating: 312.3 • Catalysts: Earnings announcements, industry consolidation • Australian electricity and gas retailer • Signing up new customers at a rate of between 10k - 12k per month • Entering into new states which should drive
Slide 10: Financial Year to Date Returns
Financial Year to Date Returns As at 31 October 2011 For personal use only Gross Portfolio -2.3% Pre-tax NTA per share growth plus dividends -3.4% Share price growth plus dividends 2.1% S&P/ASX All Ordinaries Accumulation Index -4.9% 10
Slide 11: Performance to October 2011
Performance to 31 October 2011 For personal use only S&P/ASX 300 S&P/ASX Small Annualised WAM Research Industrials Industrials Performance (WAX) Accum. Accum. Index Index 1 year +5.0% -1.1% -4.6% 3 years +9.6% +5.5% +7.9% 5 years -0.8% -2.1% -5.6% Since inception +3.9% +6.2% +4.7% 11
Slide 12: Dividends
Dividends For personal use only cents per share 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Special fully franked dividend Ordinary fully franked dividend WAX has franking credits which allows it to pay a dividend equivalent to 2.5 cents per share as at 31 October 2011 12
Slide 13: Cash Position
Cash Position For personal use only • All other excess cash is put on term deposit (TD) with a variety of major Australian banks generally staggered up to a maximum maturity of 6 months. • A ladder of TD’s is generally created to ensure one TD is maturing on a bi-weekly basis to provide liquidity if
Slide 14: Current Issues
Current Issues For personal use only • Executive remuneration reports • Interest rates • House prices • US economy • Australian dollar 14
Slide 15: Australian Housing Market
Australian Housing Market For personal use only 15
Slide 16: Looking Ahead
Looking Ahead For personal use only • Global deleveraging to continue • Interest rate cuts positive for equity markets • Industrial stocks cheap on a historical basis • Expect continued merger and acquisition activity in Australia with balance sheets in good shape 16
Slide 17: Looking Ahead
Looking Ahead For personal use only Source: Credit Suisse strategy 17
Slide 18: Looking Ahead
Looking Ahead For personal use only Source: Credit Suisse strategy 18
Slide 19: 1970's bear market vs Today
1970’s bear market vs Today For personal use only 1970’s Today Source: Veritas Securities 19
Slide 20: Analyst EPS Forecasts
Analyst EPS Forecasts For personal use only Forecast EPS growth Earnings revisions for year shown (%) FY1 (x) 25 Profile of 2.5 EPSg FY04 FY12 >1= Net 20 forecasts (LHS) 15 2.0 FY05 10 FY13 <1= Net downgrades 1.5 5 FY03 FY06 FY07 FY11 0 1.0 FY08 FY10 -5 0.5 -10 FY09 Profile of FY1 earnings revisions
Slide 21: Conclusion!
For personal use only Conclusion! 21
Slide 22: Shareholder Communications
Shareholder Communications For personal use only ¾ Website – wamfunds.com.au ¾ Media – Sky Business, Switzer, CNBC, Newspapers ¾ Research Reports – Bell Potter, Patersons & Independent Research Reports ¾ Audio casts – Monthly ¾ Subscribe for weekly emails – includes market wrap ¾ Bi-annual presentat
Slide 23: Disclaimer
Disclaimer For personal use only This presentation has been prepared for use in conjunction with a verbal presentation and should be read in that context. Information for the graphs, charts and quoted indices contained in this presentation has been sourced from IRESS Market Technology, Macquarie Sec