FGX - Future Generation Australia

[So_Cynical]

Bought a few yesterday after watching for a year or so, $1.12 looks to be about the right level to buy, fully franked dividends and all those managers provide diversification and some volatility protection, reasonable yield.
~

 

[Ann]

I am not going to say a whole lot about this at the moment, just putting up some charts and some directors names. However give me time I might have quite a bit to say about this little gem.

 

[Ann]

This is a chart of the most recent 5 year period. Closed at a $1.15 delay on my charts.

 

[Ann]

This was a time just before the up down, up down.

 

[coolcup]

This was a time just before the up down, up down.

View attachment 90657

Hi Ann

Just so you know FGX used a shell company that was previously listed on the ASX. See below for the details:

The Companyʼs history The Company was originally formed under the name the Australian Privatisation Fund Limited. On 13 November 1996 it changed its name to Australia Infrastructure Fund Limited and, in conjunction with the Australian Infrastructure Fund Trust, it invested in, and managed, infrastructure assets. On 7 July 2014 Shareholders voted overwhelmingly in support of a new business direction for the Company as well as a buy-back and recapitalisation. A summary of the Companyʼs history is set out in Section 10.1.

So I think it is meant to be viewed as a new company after 2014...

 

[Ann]

Hi Ann

Just so you know FGX used a shell company that was previously listed on the ASX. See below for the details:

The Companyʼs history The Company was originally formed under the name the Australian Privatisation Fund Limited. On 13 November 1996 it changed its name to Australia Infrastructure Fund Limited and, in conjunction with the Australian Infrastructure Fund Trust, it invested in, and managed, infrastructure assets. On 7 July 2014 Shareholders voted overwhelmingly in support of a new business direction for the Company as well as a buy-back and recapitalisation. A summary of the Companyʼs history is set out in Section 10.1.

So I think it is meant to be viewed as a new company after 2014...

Thanks coolcup, saw that but it still was Wilson all the way from the start with a few changes of directors, I will get around to putting up all the current and past directors shortly. I am busy chasing down much bigger game at the moment. I think this was the same company I saw in the FR years ago well before the GFC which he was going to have the capacity to short as well as go long for him. I see now he has a little cosy story line going about helping charities, very emotive.
Anyway, thanks again coolcup, I really appreciate help with these matters, there might be something that I might miss.

 

[So_Cynical]

I think this was the same company I saw in the FR years ago well before the GFC which he was going to have the capacity to short as well as go long for him. I see now he has a little cosy story line going about helping charities, very emotive.
Anyway, thanks again coolcup, I really appreciate help with these matters, there might be something that I might miss.

Off the top of my head FGX dont actually mange any of the funds/money, they simply pass it on to 20 or so other managers who agree not to charge a management or performance fee., thats at the core of the charitable idea.

 

[Ann]

Off the top of my head FGX dont actually mange any of the funds/money, they simply pass it on to 20 or so other managers who agree not to charge a management or performance fee., thats at the core of the charitable idea.

Thank you So_Cynical, I saw that but missed the importance of it. I had intended to look at what Wilson was investing into. I did that with WAM when it first started and wasn't massively impressed with his choices. It will be much harder if not totally impossible to find out where the money is being put which means there is absolutely no transparency. I always like to look at what LICs and ETFs hold. I don't like a bloody pig in a poke. Thanks again So_Cynical, that was very helpful.

 

[bigdog]

Ann

The Wilson group publish monthly "Investment Updates" which includes their top 20 shares for each company

I have been a WAX (Wilson Research) shareholder for many years and was one of my best investments. I sold out late October 2018

If you click on the ASX link for
WAM 14/11/2018 2:55:01 PM October 2018 Investment Update, you get the group individual companies reports

The top 20 holdings are now sorted in name sequence
-- previously sorted in value holding sequence
-- two years ago they included the $ holding amounts

 

[Ann]

Ann

The Wilson group publish monthly "Investment Updates" which includes their top 20 shares for each company

I have been a WAX (Wilson Research) shareholder for many years and was one of my best investments. I sold out late October 2018

If you click on the ASX link for
WAM 14/11/2018 2:55:01 PM October 2018 Investment Update, you get the group individual companies reports

The top 20 holdings are now sorted in name sequence
-- previously sorted in value holding sequence
-- two years ago they included the $ holding amounts

BigDog, thank you so much, this place is full of so much knowedge, I will settle down and have a good read a bit later on. If you are in Melbourne, will you be going to the talk they are giving about this company next week? Might be a replacement for WAX. My mind, I am so sorry folks I have to say this knowing Wilson to be a bit of a little joker with his WAM, bam, maam (no thank you, the Cad!)I found in the WAM propectus or AR not long after it floated. He has a company called WAX, I wonder if Brazil is mentioned. Rip Off.......Oooo that's got to hurt! Maybe he used WAX and he is just about to Polish it off! Stop Ann, just stop!

I need to take my LittleDog for a walk in the park soon!

 

[Dona Ferentes]

FGX held its AGM today. Contributing Fund mangers shared their best tips

Regal Funds Management, Jovita Khilnani: ALS Limited
Whilst the higher gold price is yet to translate into more work for ALS, the recent spike in junior mining equity raisings gives us confidence that this will occur, albeit with a lag. Currency and market share movements add further tailwinds. Further, market share gains, if held, could represent another leg of upside, given ALS’ market share today (estimate 45 per cent-plus) is materially higher than in 2012.

Tribeca Investment Partners, Jun Bei Liu: Aroa Biosurgery
Aroa is an exceptional growth story. It is at an early commercialisation stage of its product portfolio and has already delivered impressive revenue growth as its products gain a foothold in the large US market. Aroa is currently generating revenue of $22 million which we expect to compound by at least 50 per cent annually over the next three years.

Sandon Capital, Gabriel Radzyminski: Boral
A new major shareholder has secured two board seats and is likely to be a significant catalyst for change at the company. The Australian construction materials business should trade at eight to ten times EBITDA, which represents a significant uplift from prices currently implied by the market. Other value in Boral that has been overlooked are its property assets and landfill royalty.

Sage Capital, Kelli Meagher: Corporate Travel Management
Like all companies related to travel, CTD has suffered a huge hit in earnings and share price since the global pandemic began. However, we believe the worst has now passed. The company has a good track record of both organic growth and integrating and extracting value from acquisitions. It recently made a large acquisition in the US which complements its existing business and significantly increases its scale.

Wilson Asset Management, Matthew Haupt: Insurance Australia Group
While IAG’s share price currently trades at decade lows, the recent appointment of a new CEO, a sound balance sheet and strong premium growth should see the share price recover. We believe that business insurance claims implied by the share price are overstated versus the reality and we expect clarity within a few months on this key catalyst.

QVG Capital, Chris Prunty: Johns Lyng
Johns Lyng is our largest holding and a company whose defensive growth and unique culture is under-appreciated by the market. The valuation is fair for a company with such strong organic growth and quality characteristics and see potential for further valuation upside should the company make acquisitions in its strata division. We expect the company to continue to grow in the mid-teens organically.

Firetrail Investments, Blake Henricks: Lendlease
The opportunity in Lendlease comes by way of the market’s focus on the engineering division of the business which has lost more than a billion dollars for shareholders. But that is in the past. Today assets under management are less than $40 billion, but we see potential for AUM to be $100 billion in the coming years.

LHC Capital, Marcus Hughes: Life360
The recent launch of membership will be a major tipping point in the history of the company. Membership will result in 360’s product offering being extended and additional value provided to a broader range of users. We expect this will result in a further increase in the company’s TAM, a reduction in churn rates whilst delivering a significant improvement in yield at very high incremental margins.

Cooper Investors, Justin O’Brien: Reece
The elephant in the room for Reece is Australia’s housing cycle – will this soon end? One thing the pandemic demonstrated is plumbing is essential and Reece remains focused on the more resilient segments. However, the positive trends in the US are arguably now more important. Despite the pandemic, new housing demand in the US is strong, underpinned by ultra-low mortgage rates and an under build of new houses since 2006.

Centennial Asset Management, Matthew Kidman: Service Stream
The financial 2021 year will be a consolidation year for the company’s earnings but with new contracts and growth in the non-telco areas, earnings should grow strongly from financial year 2022 onwards. With a price to earnings multiple of 14 times, we think it is worth owning.

Paradice Investment Management, David Moberley: Sydney Airport
We view this as a rare opportunity to invest in Sydney Airport – a high quality, well run, near-monopolistic asset which is unregulated with a long-dated concession expiry in 2097. We believe the SYD share price assumes a four to six year recovery period, which we think more than adequately compensates investors for uncertainty in the timing and path of the recovery.

Eley Griffiths, Ben Griffiths: The Reject Shop
I’m a subscriber to the theory that companies exhibit life cycles. Management have been busy with several sales initiatives with the recent exclusive Tesco deal an early look-in on the inventive merchandising strategy in play. Valuation on a FY21 EV/EBITDA of approximately six times appears reasonable for this retailing comeback.

L1 Capital, Amar Naik: Worley
Worley shares are trading around 30 per cent below pre-COVID levels due to the significant fall in the oil price earlier this year and concerns over COVID-19 restrictions leading to a subdued recovery in oil demand. We believe Worley is an attractive investment, as the market incorrectly perceives the company as a direct exposure to the oil and gas industry, while greatly under appreciating the flexibility of its engineering consultancy led business model and the diversified nature of its operations

 

[IrishDigger]

Thought I would give a bump to the FGX topic just to see if anyone else on the forum is holding besides me.

I have held a fair swag for a few years and continue to top up via CommSec given that there is no brokerage for buyers.

Closed today at $1.275 with an NTA of $1.32

 

[Dona Ferentes]

Thought I would give a bump to the FGX topic just to see if anyone else on the forum is holding besides me.

I have held a fair swag for a few years and continue to top up via CommSec given that there is no brokerage for buyers.

Closed today at $1.275 with an NTA of $1.32

I hold some FGG, the global equivalent. Also 1% in lieu.

 

[Dona Ferentes]

These are just some tips from the fund managers, not the sole constituents; they were mentioned during the recent national roadshow for the Future Generation listed investment companies (FGX and FGG). One of the perks for shareholders in the LICs is regular access to the roster of fund managers, who provided stock picks across the roadshow.

Wilson Asset Management chairman Geoff Wilson has gone where so many others have feared to tread for the past five years, arguing AMP is trading at $1.12, but it has a net tangible asset of $1.35. Plus the stock is tipped to return somewhere between 50¢ and 60¢ when it completes the sale of its funds management business.

“So you’re buying at a 20 per cent discount now, and when they pay back half the money it’s what, a 30-plus per cent discount,” Wilson says.

In addition to AMP, Wilson plumped for engineering giant Worley, which WAM believes is on track to beat market expectations at their full-year result for the first time in a long time. The company is trading at 16 times earnings and growing at 20 per cent per annum, Wilson says, but a profit beat should deliver a re-rating.

Regal Funds Management founder and chief investment officer Phil King likes Incitec Pivot, which is benefiting from dual commodity tailwinds and likelihood of demerging.

“I think the outlook for both the fertiliser division, which is benefiting from a huge increase in fertiliser prices, plus the explosives division, which is benefiting from rising commodity prices, is very, very positive.”

But King also says the research on demergers in Australia shows they generally produce good results for shareholders and Regal is confident that will be the case with Incitec Pivot.

“I think there’s better capital allocation [with a demerger]. It means that management’s a lot more focused. And in this environment we think … both parts of the company are quite bite sized for private equity.”

Tribeca Investment Partners portfolio manager Jun Bei Liu provided several stock picks during the Future Generation events, including Treasury Wine Estates, accounting software group Xero and perennial market darling CSL. liking healthcare simply because because she feels quality companies are being sold off. Her other pick in the sector is hearing implant giant Cochlear. While the company suffered during the pandemic as health priorities changed around the world, Lei believes the group can bounce back hard.

“Now with the world reopening, earnings are looking incredibly strong. Regardless of whether there’s a recession, whatever happens around the world, it’s going to be a bottom-drawer type of stock.”

Several other picks from Future Generation fundies were focused on the health sector. Oscar Oberg from WAM nominated allied health provider Healthia as a stock to watch, while Antipodes’s fund manager Jacob Mitchell likes New York-listed pharmaceuticals giant Merck & Co and German conglomerate Siemens, which has a large healthcare division.

With commodities booming, it was no surprise that several managers nominated resources and energy stocks as their top picks. Paradice’s Tom Richardson likes rare earths group Lynas and Origin Energy, while Phil King also likes West Australian gold explorer DeGrey Mining.
Lanyon Asset Management portfolio manager David Prescott is also looking towards the mining sector with Austin Engineering, which supplies customised equipment to large global miners and contractors.

Stock selections from Centennial Asset Management duo Matthew Kidman and Gary Joffe covered a fair bit of sectoral ground. Kidman is looking towards Michael Hill Jewellers and residential property developer Cedar Woods Properties, while Joffee likes theme park operator Ardent Leisure and funeral home operator InvoCare.

Firetrail’s Kyle Macintyre is looking Stateside for his picks, with two ASX-listed companies that are headquartered in the US: gaming machine manufacturer Aristocrat Leisure and building products giant James Hardie Industries.

 

[System]

On May 8th, 2023, Future Generation Investment Company Limited changed its name to Future Generation Australia Limited.

 

[Muschu]

Very disappointing performance for quite some time now....