Australian Stocks I’m Looking At
I’m struggling to write an article on how I use the Kelly Formula, so I’m putting that on hold again while I dig into some Australian companies I’ve been investigating lately. These are small companies and this is in no way a recommendation of either.
Hunter Hall International Limited (HHL.AX)
Formed in 1993, Hunter Hall is a funds management business built on superior long term investment performance with an ethical investment overlay
My attraction here is pretty simple. High dividend yield, I forecast around 8%, which appears sustainable unless global equity markets break down and make new lows. They have had low redemptions and the fall in AUM is largely due to poor fund performance during 2008. If markets stabilise and eventually trend higher so will the yield.
Hunter Hall’s first half 2009 report didn’t paint a pretty picture, but there has been substantial improvement by the funds since then.
Neptune Mining Services (NMS.AX)
Neptune Marine Services is one of Australia’s leading providers of integrated engineered solutions to the international oil and gas, marine and renewable energy industries.
I expect the share price to drift down/sideways until after the SPP is complete as retail investors will be waiting to top their shares up via the SPP at $0.50. The shares are currently trading at $0.605.
I took a small position in Neptune on Friday to give me the right to participate in their SPP. I’ve continued to dig into their acquisitive history and am getting more comfortable with their long term prospects. Management recently upped FY2009 full year guidance to $180M revenue and $24-25 NPAT. My rough calculations show that is likely to be conservative and $190M and $26m+ more likely. Middleby Corp comes to mind when I look at the company that CEO Christian Lange is trying to build. While they are in completely different industries there are numerous similarities in strategy and execution.