WAM Active Ltd. · ASX:WAA
WAM Active — Investor Presentation (November 2011)
25 slides from WAM Active's investor presentation, Nov 16, 2011
Slide 1: WAM Active Limited (WAA)
WAM Active Limited (WAA) 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 “ Market Driven” For personal use only We scour the market for trading opportunities: • Initial public offerings • Capital raisings • Block trades at discount • Takeovers • Listed Investment Companies (LIC) discount to NTA • Earnings momentum / surprise • Short selling • Discount
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: Performance at October 2011
Performance at 31 October 2011 For personal use only S&P/ASX Annualised WAM Active All Ordinaries Outperformance Performance (WAA) Accum. Index 1 year +7.0% -4.0% +11.0% 2 years +4.3% +0.9% +3.4% Since inception +12.3% -5.6% +17.9% 7
Slide 8: Top Stocks
Top 10 Stocks as at 31 October 2011 For personal use only % Gross Company Assets HUN Hunnu Coal Limited 11.9% CNA Coal & Allied Industries Limited 10.3% SGI Signature Capital Limited 7.2% CCQ Contango Capital Partners Limited 3.0% NHC New Hope Corporation Limited 2.5% SOE Souls Private Equity Limite
Slide 9: Hunnu Coal Limited (HUN)
Hunnu Coal Limited (HUN) For personal use only • Purchased stock when de-risked (FIRB approval, bidding company held 34%) • Believed 90% acceptance condition would be waived • Expect proceeds mid November 2011. Takeover price $1.80. Annualised Days Type of Stock Return Held Pre-unconditional stock 2
Slide 10: Sunland Group Limited (SDG)
Sunland Group Limited (SDG) For personal use only • Australian based property developer • Catalysts: On market share buyback, narrow discount to NTA • Forecast NTA: $1.83 per share as at 30 June 2012 • Strong balance sheet 10
Slide 11: Financial Year to Date Return
Financial Year to Date Return as at 31 October 2011 For personal use only Gross Portfolio +1.7% Pre-tax NTA per share growth plus dividends +0.3% Share price growth plus dividends +4.6% S&P/ASX All Ordinaries Accumulation Index -4.9% 11
Slide 12: Performance since Inception
Performance since Inception For personal use only WAA +12.3% p.a. – outperformed by 17.9% p.a. over 3.8 years 80.00 60.00 40.00 20.00 ‐ ‐20.00 ‐40.00 ‐60.00 WAM Active Ltd ‐ Gross Portfolio before all expenses, fees, taxes and dividends S&P/ASX All Ordinaries Accumulation Index 12
Slide 13: Dividends
Dividends For personal use only cents per share 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2008/09 2009/10 2010/11 Fully franked dividends WAA has franking credits which allows it to pay a dividend equivalent to 10 cents per share as at 31 October 2011 13
Slide 14: Equity Position
Equity Position For personal use only Equity Exposure 100% • Average equity position since Jan 2008: 55.0% 90% • Maximum equity level: 79.9% 80% (Jul 2009) 70% • Minimum equity level: 12.3% 60% (Jan 2008) 50% 40% 30% 20% 10% 0% Jan‐08 Jul‐08 Jan‐09 Jul‐09 Jan‐10 Jul‐10 Jan‐11 Jul‐11 14
Slide 15: 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 16: Current Issues
Current Issues For personal use only • Executive remuneration reports • Interest rates • House prices • US economy • Australian dollar 16
Slide 17: Australian Housing Market
Australian Housing Market For personal use only 17
Slide 18: 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 18
Slide 19: Looking Ahead
Looking Ahead For personal use only Source: Credit Suisse strategy 19
Slide 20: Looking Ahead
Looking Ahead For personal use only Source: Credit Suisse strategy 20
Slide 21: 1970's bear market vs Today
1970’s bear market vs Today For personal use only 1970’s Today Source: Veritas Securities 21
Slide 22: Analyst EPS Forecast
Analyst EPS Forecast 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 23: Conclusion!
For personal use only Conclusion! 23
Slide 24: 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 25: 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