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Shares In the Dollarwise Portfolio

by dollarwise
Dollarwise Portfolio

Dollarwise Portfolio

Here’s a current look at the Dollarwise portfolio. Keep in mind that this is not investment advice, as per the disclaimer. But for interest sake, here’s a look at the shares that in my current portfolio and some brief reasons why.

AAD

Ardent Leisure recently got sold down big time with the Dreamworld accident. This I thought was a buying opportunity when it crated down near $2. It’s still around that level at about $2.11. Earnings will take a hit, but the bigger source of income for AAD is its Main event entertainment (bowling) centres in the US. They are undergoing a huge rollout of what seems to be a winning formula. That means there’s huge future upside for this company. I like the strategy and think in 3-5 years this will be a very sound investment. It’s also the top investment of WAX and high up on WAM, a good sign that they believe in the medium term future too. Also pays a 5% unfranked div too. I’ve got high hopes for AAD.

AFI

I’ve mentioned AFIC in previous posts. A solid low fee LIC returning 4% div plus capital appreciation. I buy this instead of banks and other top 50 shares which it owns anyway. Cheaper to buy an LIC than trying to get in on high priced banks, etc. Good company to hold forever and forget about it.

ALU

Altium is a circuit board maker that is growing market share. It has met targets and has big plans for growth. So far so good, which is reflected in a nicely growing share price and dividend return over time. It’s got a high PE at 28 but the growth potential is huge. Unless ALU stops hitting guidance this one will likely continue its upward trajectory. Great company 3.7% franked dividend. A great buy and hold option.

AYS

Amaysim is a mobile phone company that owns Amaysim (competes with telstra and Optus) and Vaya (cheapest on the market). AYS is a market share disrupter. It’s growing quickly and offering some of the cheapest plans around. It owns few assets and has low margins, but as long as it is accumulating market share, its profits will grow. They are also looking at entering the broadband market too. A move I’m not sure about yet, but if they can do as well as they have in the mobile space, the price of the shares have a long way to grow. The danger is that they put in too much cash in a tight space and lose out. Paying a 4.3% div on current prices and a PE of 25. I think management has a very clear and simple strategy which I really like. I’m sitting on a healthy profit already and look forward to future growth. We’ll see how next reporting season goes.

CMW

Cromwell property group is a real estate/office trust (REIT). A lot of REIT’s have been hammered by the prospect of rising interest rates and the fear of declining property prices. Cromwell does have a little too much debt for my liking. With interest rates more likely to head up than down, this one might not survive in my portfolio beyond this year. That said I’ve returned over 10% in capital growth and it pays a 8.2% dividend (was over 9% when I bought in), so this one is on track to return a tidy 19%. As I said, I don’t think I’ll keep this one forever, but while it stays above my purchase price, such a large dividend is great.

CSL

CSL is a really, really great company. It has little competition, great R&D to keep it ahead of the pack. CSL is a buy and hold company at any time. I bought some when it dipped under $100. It will keep growing profits as it has in the past. Set and forget. I’ll add to this when market dips allow and I have enough cash. Not cheap to get in on!

ECX

Eclipx are a car leasing company. Not particularly amazing, but lots of company’s lease cars. Paying a 3.8% fully franked div. The company is a recent spinoff, so no history to gauge. I’m sitting on a small loss so far. I liked their plan for growth and will give it some time to see how they go meeting targets. PE around 17. The jury is still out on this one. I’ll give it a year or two and evaluate as I take in the dividends.

EVT

Event hospitality own hotel chains and cinemas. They have an ok history and have plans to expand their hotels and cinema chains. That should result in increasing profits over time. Trading at a PE 17-18, with a 3.8% fully franked dividend. It’s been trading sideways for the last year. I think it has future growth potential. So I’ll sit on the dividends and wait for company profits to lift the share price in time.

Update: EVT took a 12% hit on poor earnings and a profit downgrade. I’ll hold and see if it recovers in future quarters. Chances are a good movie or two will lift earnings and drag it back. May reevaluate its place in my portfolio though if it misses guidance too often.

FLT

Flight centre is probably the one share I’m least convinced of. There’s a lot of fear that flight centre will lose too much market share to online competition. They’ve also been squeezed with lower international air fares meaning lower commissions. All that negativity is reflected in the low share price. That said, they are selling more tickets than ever. If or when ticket prices increase, perhaps as oil prices grow, their margins should increase. It may not happen, the doom sayers may be right. For now, under $30 seems like a decent price, for a PE of 11 and a 5% fully franked dividend. I’m happy if it trades sideways for now and hopefully will pick up better margins at some point.

GTY

Gateway lifestyle own manufactured home retirement villages. They have a pipeline of new developments and constant income from currently occupied homes. This is essentially an REIT in the retirement game. I only own a small position for now, but think this will have very constant returns over time. The dangers are growing interest rates, a fall in property prices or government changes to pensions. A PE of 14 is good and an unfranked 5.3% dividend. It’s trading around its initial issue price of $2. In terms of the future there’s going to be more and more need for manufactured homes. I think this is an industry that will do well with high demand for cheap retirement homes. Then there’s the constant management income that will roll in without question. I can’t see this one losing out over time. It should certainly beat money in the bank.

HSO

Healthscope own private hospitals and have plenty of room for future growth and development. Again the ageing population and growing wealth should bode well for healthscope. It’s last report was disappointing with a drop in expected patient numbers. The share price got hammered, so I bought in. It’s risen quite a bit just recently but for a long term investment is a good buy. I’d expect this company’s profits to increase substantially over time. We all get sick! A PE of 19-20 and a 3.3% dividend. This looks like a long term winner.

JHC

Japara health care is in the aged care sector. This is another stock whose price got hammered last reporting season. In addition, government regulation changes whacked it down some more. That made it cheap. It’s back now at a PE of 17 and still boasts a 5.9% fully franked dividend. I sold down a portion when the stock was up 22%, a little too tempting. It’s since steadily fallen back down and is in buying territory again. I might wait and see how it reports before jumping in for some more. The longer term story should be good for JHC with an ageing population. I’d like to see it report well and build some consistent growth. We shall see.

MYX

MYX is one of the few non dividend paying shares in my portfolio. Mayne Pharma is a drug maker with a big pipeline of new drugs on the way. It’s price has taken a beating from Trump’s comments and a government suit against the company. As a result it’s been sitting at $1.25 for while. That’s where I’ve bought in. Sentiment seems to have returned a bit and it’s been up of late, along with some better sounds from the Trump. MYX to me looks like a great growth company. Over time I expect it’s share price will steadily grow. If it doesn’t, I’ll get out. With no dividend this one needs to appreciate to stay in the fold.

RFG

Retail Food Group owns a bunch of businesses like Gloria Jeans and Donut King along with others. It’s reasonably priced around a PE of 15, has good growth prospects and a fully franked div of 4.4%. Those are decent numbers. Provided its businesses continue to expand the company should grow both in value and dividends. I’ll be keenly watching at reporting season to see how this goes.

RHC

Ramsey health care is like CSL, just buy it and forget it. A great company that owns private hospitals. Under girded by an aging population, a global reach with huge growth prospects.  It’s not cheap with a PE of 31 and modest 1.8% franked dividend. But this is a company I expect will just keep growing and growing. The more of these the better. Recent price weakness due to the poor report from Healthscope and a downturn in high PE companies has opened the door to get in on Ramsey. I intend to hold this one forever and add to it when markets are low.

RKN

Reckon is a software company for accountants. It’s a market leader in some areas and also has other growth areas that it’s developing. It’s PE is reasonable for this sector at just 14 and pays a dividend of 2.8%. I liked it’s growth strategy on paper. Its price has shot up of late and will likely pull back I’m guessing. I don’t have a big position in this one and will watch it’s growth over time. We shall see how it goes.

RRL

Regis resources is a gold producer that pays the best dividend in town at 3.6% on today’s pricing. I’ve held RRL for the past few months and it has done really well and is a hedge against bad news.

TPM

Tpg has been a huge growth story but has recently been sold down by about 50%. Fear of margin squeeze from the nbn, fear of huge debt and massive spend has also weighed on sentiment. That makes it a lot cheaper with PE dropping to 16-17 and a 2.3% franked div. It’s looking at getting into mobile and spending up big in Australia and Singapore. The company has a great track record, very good management and tightly held ownership. It is taking some big risks though. It’s a question of trust. I think the share price will be subdued by the huge outlays on the way. But if its strategy works in 3-5 years the price will regain the losses and power ahead. You could wait and see how it goes and ride the train up at a future date it all goes well. I’ve got a small position that I’ll hold as see ow it goes. When things pick up, if they pick up, I’ll add to it.

VAS

Vanguards ASX index fund. Nothing fancy here. It goes up with the ASX and down with the ASX and pays healthy dividends along the way. Just top up 4 times a year when the market dips and leave it alone.

WAX

A Wilson Asset Management LIC. They are good at what they do, have grown their dividend regularly (5.4% franked at current prices) along with capital appreciation. I like their shareholdings and they have enough cash to take advantage of good opportunities. It’s always good to own some LIC’s and this is a good one. I will keep adding to this position.

WPL

Woodside petroleum is in the oil and gas business. It’s a big player. It’s price seemed to have bottomed out around $25 and has picked up some since then. The directors have been buying up which is a good sign of things to come. I think the oil price will do ok for the next  few years. The global economy is headed up and that should bode well for WPL. A 4% dividend is there too. I see reasonable upside. This is a cyclical stock though, not a hold forever one. At the moment the cycle is headed up and the dividend is great.

So there it is, my current protfolio.

Recently Sold

TGR

Tassal grows salmon in Tasmania. It’s price got wacked down when high temperatures hit production volumes. To me that says short term loss, buy in and wait for a good report. It gained over 23% in quick time, so I sold out and took the profit. That was the plan. It does pay a decent dividend. But the higher price didn’t warrant the risk of future issues. It’s still a good company though.

On the Watchlist

Here’s shares I’m watching, from my most likely to purchase down.

SHV

Select Harvests is almond farmer. It’s share price has dropped of late and looks like it may be a buy. With a decent dividend 5.8% fully franked dividend!!!,  a low PE of 12. It’s dropped just under $2 and now looks like good value. I think this is one to pull the trigger on. I might wait and buy on potential reporting weakness. My fear is that bad news is always just around the corner for farmers, whether it’s weather, prices, disease or something else.

CGF

Challanger is a great company that I think will grow and grow. I wish I had the cash to buy in when it last dipped. I think it’s priced to value, but I suspect will just keep growing steadily. When the next big pullback hits this one will be on my radar.

MIR

Another good LIC. I want to diversify my LIC holdings about a bit. This is on my list. I’ll buy at a market downturn.

TWE

Treasury Wine Estates is not cheap but has grown hugely and will continue solid growth by the looks of it. I don’t think you’d lose out with TWE shares. Again, worth a look when prices fall.

ASX

Again, not cheap, but with a monopoly on a growing business, ASX will always go up (with the exception of a recession). It’s worth picking up on a dip and is on my watchlist.

A2M

I like this company, it’s growth prospects and plan. It sells milk and milk products. Having seen Bellamy’s there’s a lingering fear that things could change more in china and leave A2M in trouble. It’s just a fear and the numbers suggest its irrational. This company will likely continue its staggering growth into the future.

STO

Santos has been issuing more and more shares to pay down debt. That’s sent its price down and down. At some point this is a buy. It has a plan to turn things around and it seems to be on track. I think Santos may do well as the oil price rises. This is one to keep an eye on for now.

CKF

Collins food owns the rights to KFC restaurants in Australia and is expanding in Germany. I’m watching to see how it goes.

PGH

Pact group seem to be doing really well and have a lot of growth ahead. Worth watching for now.

SOM

These guys are rolling out sleep centres in the US and new tech to deal with sleep aponea. They have a good product that has potential to grow in a huge market. Time will tell how their strategy goes. Worth watching to see how it goes and jumping on if it goes well. They are only at the start of potentially large roll out.

 

Speculators

If you’re in for speculation in hopes of 10 fold returns. Here are a couple that look promising and I’m atleast keeping on the radar. I’m watching and hope to get on early if good news comes. That means missing the first big jump up but also not risking a huge chunk down too.

HZR 

Hazer group have developed a unique process to manufacture graphite and hydrogen gas at a cheaper price than current methods. Research is looking good and they are building small scale pilots before building a large scale one. It’s still a year or two off making any money, but has good prospects if you are willing to wait it out. The risk is that with any new tech, something better comes along.

NUH

Nuheara have made a wifi hearing device. They are going to market right now. If it does well the share price will rise, if it doesn’t it will pull back. That’s why it’s a speculator. You could sit and wait to see how early sales develop to see if this one will be a long term tech company or just a passing player.

NOX

These guys want to beat cancer with a drug that has failed in the past but they have modified it to overcome the hurdle. It essentially increases the effectiveness of current cancer drugs. If trials completed this year come back positive, the price of this one will go through the roof. They are already not so cheap and rising. If it fails expect to lose most of your cash. A make or break on this one. Maybe safer to watch and see and jump on if it looks like getting to market.

GSC

Global geoscience is a mining company wanting to supply lithium to Elon Musk and Tesla. It’s sitting on some good prospects which is reflected in a growing share price. It’s still really early days though. But could be a flyer if all goes well in the future.

AYR

A cobolt explorer near broken hill awaiting drill results soon. If the results are good the price will bolt up, bad and you can cut your losses and walk away.

HFR

Highfield has potash mines with a really big new mine ready to go in Spain. All it’s waiting for is environmental approval. If it comes through the share price will rocket up as the mine has a long life and cheap extraction costs (provided the environmental requirements aren’t too stiff). If it doesn’t the price will fall but it has enough other operations to still generate a profit.

 

 

 

 

 

 

 

 

 

 

 

 

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1 comment

Dividends Down Under February 20, 2017 - 2:34 pm

Love the breakdown Luke and you’ve got a lot of good names in there. We have a few similar holdings and I’m sure more over time 🙂

Tristan

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