Cadence Opportunities Fund Ltd. · ASX:CDO
Cadence Opportunities Fund — Shareholder Meeting (November 2024)
31 slides from Cadence Opportunities Fund's shareholder meeting presentation, Nov 26, 2024
Slide 1: AGM Investor Briefing
AGM Investor Briefing For personal use only Cadence Capital Limited (CDM) & Cadence Opportunities Fund Limited (CDO)
Slide 2: CDM 2024 Year-End Results
CDM 2024 Year-End Results ▪ Fund up 10.4% for the 2024 financial year For personal use only ▪ Profit after tax of $21.6m ▪ Last financial year the fund displayed significantly lower than market volatility resulting in good risk adjusted returns. ▪ The top contributors to performance last financial y
Slide 3: Cadence Capital Limited (CDM)
Cadence Capital Limited (CDM) For personal use only ▪ Fund up 1.5% in October outperforming ▪ CDM has a liquid and diversified portfolio index by 2.8%. ▪ The company holds around 35 positions with ▪ Past 19 years fund up +10.7% p.a. the largest position around 6% of the fund. outperforming index by
Slide 4: CDM Top Holdings (19th Nov 2024)
CDM Top 20 Holdings (19th Nov 2024) For personal use only ▪ Exposure to gold stocks has reduced around 5% in November through both a reduction of gold stock share prices and selling of holdings. 4
Slide 5: CDO 2024 Year-End Results
CDO 2024 Year-End Results ▪ Fund up 10.8% for the 2024 financial year For personal use only ▪ Profit after tax of $2.3m ▪ Last financial year the fund displayed significantly lower than market volatility resulting in good risk adjusted returns. ▪ The top contributors to performance last financial ye
Slide 6: Cadence Opportunities Fund Limited
Cadence Opportunities Fund Limited For personal use only ▪ CDO is an active trading version of the ▪ CDO has a liquid and diversified Cadence Capital process, using shorter portfolio duration trends to produce alpha opportunities. ▪ The company holds around 45 positions with the largest position 7%
Slide 7: CDO Top Holdings (19th Nov 2024)
CDO Top 20 Holdings (19th Nov 2024) For personal use only ▪ Exposure to gold stocks has reduced around 7% in November through both a reduction of gold stock share prices and selling of holdings. 7
Slide 8: Fund update/ reporting season feedback
Fund update/ reporting season feedback 22.5 4.0% For personal use only 3.0% 20 2.0% 1.0% PE 17.5 0.0% EPS Ratio Growth -1.0% 15 -2.0% -3.0% 12.5 -4.0% PE Ratio of All Ordinaries Accumulation Index (LHS) 2 Year Rolling Average EPS Growth (RHS) ▪ A large number of stocks are not meeting our fundamenta
Slide 9: Long term interest rates
Long term interest rates For personal use only We showed this chart at the 2022 AGM. US interest rates rose very quickly from 0.25% in March 2022 to 5.5% in July 2023. Rates have since been cut to 4.75% but it is too early to make a call that interest rates are now trending down. 9
Slide 10: Short term interest rates
Short term interest rates For personal use only ▪ The Reserve Bank has kept the official interest rate steady in Australia over the past year. It can be seen on the above chart that 10-year bond rates (which give us an indication of where the market thinks interest rates are headed) have recently mo
Slide 11: Gold vs Gold stocks
Gold vs Gold stocks 10,000 4,300 For personal use only 9,500 4,100 3,900 9,000 The AUD gold 3,700 8,500 price has been Gold 3,500 AUD$ steadily rising Index 8,000 Gold since the start of 3,300 Price 7,500 last financial year, 3,100 but ASX listed gold 7,000 miners have not 2,900 6,500 performed as 2
Slide 12: Evolution Mining (EVN) – Long (Core)
Evolution Mining (EVN) – Long (Core) For personal use only Stock Profile EVN Fundamental Analysis ▪ EVN has successfully integrated the Northparkes asset into the portfolio following its acquisition in Dec 2023. Long Position (FY25e) ▪ A combination of strong operating performance and gold price tai
Slide 13: Evolution Mining (EVN)
Evolution Mining (EVN) For personal use only $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 13
Slide 14: WestGold Resources (WGX) – Long (Core)
WestGold Resources (WGX) – Long (Core) Fundamental Analysis For personal use only Stock Profile WGX ▪ We have been adding to our WGX position following management’s successful turnaround of the gold operations, delivering improved earnings. Long Position (FY25e) ▪ WGX has recently completed its merg
Slide 15: WestGold Resources (WGX)
WestGold Resources (WGX) For personal use only $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 15
Slide 16: Other gold positions
Other gold positions Resolute Mining (RSG) For personal use only The RSG share price more than doubled in the first 10 months of 2024 due to gold price rises and good operational performance. The share price has now fallen back to where it was at the start of the year after the company announced tha
Slide 17: Turnaround Situations
Turnaround Situations For personal use only ▪ Meta, Netflix and Block all had large share price falls in late 2021 and early 2022. ▪ This was part of a broader market sell off, with the S&P 500 falling 25% and the NASDAQ falling 35%. ▪ Meta and Netflix became cheap fundamentally, and when the share
Slide 18: Meta Platforms (META US) – Long (Core)
Meta Platforms (META US) – Long (Core) For personal use only Fundamental Analysis Stock Profile META US ▪ Meta Platforms shares were up over 75% during the last financial year. Long Position (FY24e) ▪ The benefits from Mark Zuckerberg’s “year of efficiency” as well as improved revenue from advertise
Slide 19: Meta Platforms (META US)
Meta Platforms (META US) USD 700 For personal use only USD 600 USD 500 USD 400 USD 300 USD 200 USD 100 USD 0 19
Slide 20: Netflix (NFLX US) – Long (Core)
Netflix (NFLX US) – Long (Core) For personal use only Fundamental Analysis Stock Profile NFLX US ▪ Netflix continues to perform well. Over the past year Netflix has benefited from a focus on reducing password sharing, as Long Position (FY24e) well as the introduction of ad supported plans that are c
Slide 21: Netflix (NFLX US)
Netflix (NFLX US) USD 900 For personal use only USD 800 USD 700 USD 600 USD 500 USD 400 USD 300 USD 200 USD 100 21
Slide 22: Block (SQ US) – Long (Core)
Block (SQ US) – Long (Core) For personal use only Fundamental Analysis Stock Profile SQ US ▪ Block has two divisions. Square provides point of sale systems for businesses, and Cash App is an app that allows users in the US to send and receive money easily with low fees. Long Position (FY25e) ▪ Block
Slide 23: Block (SQ US)
Block(SQ US) USD 300 For personal use only USD 250 USD 200 USD 150 USD 100 USD 50 USD 0 23
Slide 24: Energy Positions: Whitehaven Coal (WHC)
Energy Positions Whitehaven Coal (WHC) For personal use only ▪ In April Whitehaven completed the acquisition of the Daunia and Blackwater metallurgical coal mines. This roughly doubled its production base and created a dual-pronged revenue stream in metallurgical coal (65%) and thermal coal (35%). ▪
Slide 25: Energy Positions: Yancoal and Stanmore
Energy Positions Yancoal Australia (YAL) For personal use only ▪ YAL produces a combination of metallurgical and thermal coal primarily from NSW & QLD operations. ▪ YAL generates a substantial amount of free cash flow - $430m in Sept 2024 quarter ($1.7bn annualised). ▪ Expected FY25 free cash flow y
Slide 26: PE Expansion Positions
PE Expansion Positions For personal use only ▪ We have been invested in Suncorp (SUN), QBE Insurance (QBE) and Origin Energy (ORG) for a number of years. ▪ When we invested in these positions all three companies were on a low PE ratio and had good growth prospects. Suncorp and QBE were able to incre
Slide 27: Some CDO Trading Positions
Some CDO Trading Positions Trading opportunities have started to present and CDO has been taking on new trading positions. In cases For personal use only where the stocks have enough liquidity, the trades are also done in CDM. IperionX (IPX) IPX is a US based company that has developed technology to
Slide 28: Outlook
Outlook ▪ We expect asset and commodity price volatility to remain high in the coming months. For personal use only ▪ Growth in China / Asia appears to be slowing with the property sector dragging on the economy and causing weak consumer and investor confidence. China is continuing to stimulate and
Slide 29: Outlook (Continued)
Outlook (Continued) ▪ Interest rates have been rising since 2020. We continue to believe that the current For personal use only uptrend in interest rates is one of the most important trends to monitor in determining the direction of future asset prices. ▪ There was media speculation the Reserve Bank
Slide 30: Outlook (Continued)
Outlook (Continued) ▪ Demand for electric vehicles has collapsed in Europe and other western countries. For personal use only Electric vehicle growth in China remains strong. China is largely ‘dominating’ EV’s globally after adopting the strategy a long time ago. ▪ Stock markets are still rising des
Slide 31: Disclaimer
Disclaimer For personal use only The information contained in this report has been prepared with all reasonable care by Cadence Asset Management Pty Ltd and is of a general nature only. It is provided for information purposes only and should not be construed as an offer or solicitation. Nothing cont
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