WAM Research Ltd. · ASX:WAX
WAM Research — Investor Presentation (November 2014)
46 slides from WAM Research's investor presentation, Nov 20, 2014
Slide 1: Investor Presentation November / December 2014
For personal use only Investor Presentation November / December 2014
Slide 2: Agenda
Agenda For personal use only • About Wilson Asset Management • Market Overview and Outlook • Investment Portfolio • WAM Capital Limited • WAM Research Limited • WAM Active Limited • Investor Communications • WAM Bag Competition • Community Investment 2
Slide 3: About Wilson Asset Management
For personal use only About Wilson Asset Management 3
Slide 4: Experienced Team
Experienced Team For personal use only Geoff Wilson Martin Hickson B Sc GMQ FAICD FFinsia B Bus B Comp Chairman / Senior Equity Analyst / Portfolio Manager Dealer Kate Thorley Matthew Haupt B Com CPA Grad Dip ACG CFA B Com Grad Dip App Fin Chief Executive Officer / Senior Equity Analyst Company Secr
Slide 5: Our LICs
Our LICs For personal use only WAM Capital WAM Research WAM Active (ASX: WAM) (ASX: WAX) (ASX: WAA) Gross assets $621.0m $159.2m $35.2m Share price* $1.94 $1.14 $1.24 Pre tax NTA $1.77 $1.09 $1.01 Premium to NTA* 9.6% 4.6% 22.8% Fully franked FY2014 6.7% 6.6% 7.7% dividend yield* Research Driven / R
Slide 6: Investment strategy
Investment strategy For personal use only Research Driven Market Driven Investment Strategy Investment Strategy Identifying undervalued growth Exploiting short term market companies mis-pricing opportunities • Low portfolio turnover • High portfolio turnover Flexibility to hold cash if no investment
Slide 7: Capital protection strategy
Capital protection strategy For personal use only Average Cash at 31 Objective to deliver risk- cash since October adjusted returns and inception 2014 preserve capital • Default to cash 33.9% 45.5% • Closed pool of capital • Nimble & flexible mandate 37.6%* 33.5% • Use of stop losses • Weighting of
Slide 8: Our LICs trading at premiums to NTA
Our LICs trading at premiums to NTA For personal use only Share price trading at premium/discount to Net Tangible Assets (pre-tax) 35% 25% 15% 5% -5% -15% -25% -35% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 35% 25% 15% 5% -5% -15% -25% -35% 2010 2011 2012 2013 2
Slide 9: Future Generation Investment Fund
Future Generation Investment Fund For personal use only The team launched the Future Generation Investment Fund Limited (FGX) • Donates 1% of assets to Australian children’s charities supporting children at risk • Team supported $200 million capital raising • Ongoing communication with shareholders,
Slide 10: Submission to the Financial System Inquiry
Submission to the Financial System Inquiry For personal use only • Lodged two separate submissions to the Financial System Inquiry (FSI) • Sought to advocate for the rights of retail investors • We believe all shareholders, retail and institutional alike should have the opportunity to participate in
Slide 11: Market Overview and Outlook
For personal use only Market Overview and Outlook 11
Slide 12: Equity Market Outlook
Equity Market Outlook For personal use only Quantitative Housing bubble? easing globally Equity valuations Chinese growth look full slowing 12
Slide 13: US Equities
US Equities For personal use only US Equities are expensive on trend earnings from a long term perspective 40 30 20 10 0 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 S&P 500 PE on Trend EPS Average +/- 1 S.D. Source: Deltec International Group 13
Slide 14: Australian Equities
Australian Equities For personal use only Australian Equities are expensive on trend earnings from a long term perspective 30 25 20 15 10 5 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 ASX 200 PE on Trend Earnings Average +/- 1 S.D. Source: Deltec International Group 14
Slide 15: S&P500 performance post recession
S&P500 performance post recession For personal use only Source: Deltec International Group 15
Slide 16: Investment Portfolio
For personal use only Investment Portfolio 16
Slide 17: Top Research Driven Holdings
Top 10 Research Driven Holdings For personal use only ASX Code Company SGH Slater & Gordon Limited CSV CSG Limited AHE Automotive Holdings Group Limited GXL Greencross Limited RFG Retail Food Group Limited IFM Infomedia Limited Held in WAM Capital CTD Corporate Travel Management Limited and MTR Mant
Slide 18: Top Market Driven Holdings
Top 10 Market Driven Holdings For personal use only ASX Code Company CYA Century Australia Investments Limited HHV Hunter Hall Global Value Limited HVN Harvey Norman Holdings Limited APO APN Outdoor Group IPE IPE Limited GMA Genworth Mortgage Insurance Australia Limited Held in WIC Westoz Investment
Slide 19: Top Contributors and Detractors
Top Contributors and Detractors For personal use only Research Driven Investment Strategy Contributors % Detractors % IFM Infomedia 11.8 GXL Greencross -2.6 SRX Sirtex Medical 9.6 FXJ Fairfax Media -1.8 SGH Slater & Gordon 8.6 SWL Seymour Whyte -1.5 Market Driven Investment Strategy Contributors % D
Slide 20: Research Driven Investee Company
Research Driven Investee Company For personal use only Austal Limited (ASX: ASB) Overview • Designer and manufacturer of defence and commercial ships Background • Market Cap $450m • Order Book currently sits at $2.8bn • P/E ratio of 8.5x with growth > 15% in FY15 Catalysts • Potential expansion of t
Slide 21: Market Driven Investee Company
Market Driven Investee Company For personal use only Galileo Japan Trust (ASX: GJT) Overview • Real Estate Investment Trust, primarily office and retail properties in Japan Background • Recapitalisation in September 2013 • 9% dividend yield • NTA: $2.19, Share price: $1.68, Discount to NTA: 23% Cata
Slide 22: WAM Capital Limited
For personal use only WAM Capital Limited (ASX: WAM) 22
Slide 23: Recent Highlights
Recent Highlights For personal use only 13.0c 6.7% 7.6% Full year dividend Fully franked Investment portfolio dividend yield* performance** 10.6% 45.5% Total shareholder return** Current cash weighting^ *As at 14 November 2014 **12 months to 31 October 2014 ^As at 31 October 2014 23
Slide 24: Dividend Growth
Dividend Growth For personal use only WAM Capital Dividends since Inception Cents per share 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Ordinary fully franked dividend Special fully franked dividend Equal access share buy-back • Estimated profit reserve is 22.2 cents per share and the franking acco
Slide 25: Outperformance
Outperformance For personal use only Since Performance at Inception 31 October 2014 (% pa) 1 Yr 3 Yrs 5 Yrs 10 Yrs (Aug 1999) WAM Investment 7.6% 16.9% 14.0% 13.3% 17.9% Portfolio* S&P/ASX All Ordinaries 5.9% 12.9% 7.9% 8.3% 8.5% Accumulation Index Outperformance +1.7% +4.0% +6.1% +5.0% +9.4% *Inves
Slide 26: Growth of $10,000 since inception
Growth of $10,000 since inception For personal use only $100,000 $90,000 WAM: $86,582 $80,000 $70,000 $60,000 $50,000 $40,000 All Ords Accum: $30,000 $35,703 $20,000 $10,000 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 WAM Capital S&P/ASX All Ordinaries Accumula
Slide 27: WAM Research Limited
For personal use only WAM Research Limited (ASX: WAX) 27
Slide 28: Recent Highlights
Recent Highlights For personal use only 7.5c 6.6% 12.4% Full year dividend Fully franked Investment portfolio dividend yield* performance** 5.9% 33.5% Total shareholder return** Current cash weighting^ *As at 14 November 2014 **12 months to 31 October 2014 ^As at 31 October 2014 28
Slide 29: Dividend Growth
Dividend Growth For personal use only WAM Research Dividends since Inception Cents per share 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Ordinary fully franked dividend Special fully franked dividend • Estimated profit reserve is 24.0 cents per share and the franking account has a balance of $2,558,695. • T
Slide 30: Outperformance
Outperformance For personal use only Since change in investment Performance at strategy 31 October 2014 (% pa) 1 Yr 2 Yrs 3 Yrs (July 2010) WAX Investment 12.4% 24.5% 22.9% 18.9% Portfolio* S&P/ASX All Ordinaries 5.9% 14.9% 12.9% 10.4% Accumulation Index Outperformance +6.5% +9.6% +10.0% +8.5% *Inve
Slide 31: Growth of $10,000 since change in investment strategy
Growth of $10,000 since change in investment strategy For personal use only $30,000 $25,000 WAX: $25,586 $20,000 All Ords Accum: $15,000 $15,567 $10,000 $5,000 $0 2010 2011 2011 2012 2013 2014 WAM Research S&P/ASX All Ordinaries Accumulation Index - Assumes reinvestment of dividends - As at 31 Octob
Slide 32: Capital Management
Capital Management For personal use only • 1 for 2 Bonus Option Issue announced 28 October 2013 • Exercise price: $1.20 Exercise by 17 June 2015 • Options trading at: $0.015* (ASX: WAXO) • Share price: $1.14* (ASX: WAX) • $2.4m received to date from options exercised *As at 14 November 2014 32
Slide 33: WAM Active Limited
For personal use only WAM Active Limited (ASX: WAA) 33
Slide 34: Recent Highlights
Recent Highlights For personal use only 9.6c 7.7% 3.3% Full year dividend Fully franked Investment portfolio FY2014 dividend yield* performance** 15.0% 54.6% Total shareholder return** Current cash weighting^ *As at 14 November 2014 **12 months to 31 October 2014 ^As at 31 October 2014 34
Slide 35: Dividend Growth
Dividend Growth For personal use only WAM Active Dividends since Inception Cents per share 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Fully franked dividends • Estimated profit reserve is 1.8 cents per share and the franking account has a deficit balance of $406,05
Slide 36: Positive Performance
Positive Performance For personal use only Since Performance at Inception 31 October 2014 (% pa) 1 Yr 3 Yrs 5 Yrs (Jan 08) WAA Investment 3.3% 12.8% 9.3% 12.5% Portfolio* S&P/ASX All Ordinaries 5.9% 12.9% 7.9% 2.1% Accumulation Index Outperformance -2.6% -0.1% +1.4% +10.4% UBS Bank Bill Index (cash)
Slide 37: Growth of $10,000 since inception
Growth of $10,000 since inception For personal use only $25,000 $20,000 WAA: $20,262 $15,000 All Ords Accum: $12,033 $10,000 UBS Bank Bill: $11,125 $5,000 $0 2008 2009 2010 2011 2012 2013 2014 WAM Active S&P/ASX All Ordinaries Accumulation Index UBS 90 Day Bank Bill Index - Assumes reinvestment of d
Slide 38: Investor Communications
For personal use only Investor Communications 38
Slide 39: Investor Communication
Investor Communication For personal use only Weekly emails Half yearly Monthly NTA Half & full year including market national investor announcement financial results update presentations & investment update Website Media Industry Independent research wamfunds.com.au conferences Winner of the Listed
Slide 40: WAM Bag Competition
For personal use only WAM Bag Competition 40
Slide 41: Thank you to all of our entrants
Thank you to all of our entrants For personal use only A token of our appreciation will soon be in the post 41
Slide 42: And the winners are…
And the winners are… For personal use only Phil Wharton, NSW Denzil Griffiths, VIC Jeffrey Wilmer, QLD John Warner, NSW 42
Slide 43: Community Investment
Community Investment For personal use only Corporate Volunteering Day with Variety • Participated in music therapy to children with special needs at Wairoa School, Bondi Toronto High School, Student Leader Project • Hosted 15 students, talking to them about our journey into the workplace and providi
Slide 44: Disclaimer
For personal use only Disclaimer 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, WAM Capital L
Slide 45: Contact us
Contact us For personal use only Email: info@wamfunds.com.au Phone: (02) 9247 6755 Fax: (02) 9247 6855 Website:www.wamfunds.com.au 45
Slide 46: November / December 2014
For personal use only Investor Presentation November / December 2014