29/06/2022 09:27

Current thinking around the MM Income Portfolio

We’re contemplating a number of amendments in the Income Portfolio as we position for what comes next.  Today’s portfolio update will simply detail our current thinking, not yet our planned actions:   

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22/06/2022 09:28

Active Income Portfolio

The portfolio fell -1.67% for the week while cash remains at ~1%. Magellan (MFG) +6.79% the biggest winner from an absolute perspective although our position is a small one, while Wesfarmers (WES) +2.17% & G8 Education (GEM) +1.92% recovered some recent losses, the biggest drag was novated leasing and salary packing provider Smartgroup (SIQ) which fell by -18.55% following the loss of a contract and unrelated ~8% earnings downgrade – we covered SIQ here

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16/06/2022 17:18

Smart Group (SIQ) $6.53

SIQ -10.91%: A poor day for the novated leasing and salary packaging business, missing out on renewing the contract for one of their top 20 clients, the Department of Education & Training in Victoria. There had been a competitive tender and the award was given to their competitor, Maxxia which is owned by McMillan Shakespeare (MMS). The exclusive contract currently has approximately 4,000 novated...

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09/03/2022 09:27

Smart Group (SIQ) $7.72

The car leasing & salary packaging business traded ex-dividend for 49c yesterday which is equal to 70c grossed for franking. On our entry price of $6.92, this dividend alone equated to a 10% payout. While the stock declined by a slightly greater margin yesterday, the outlook for SIG remains a positive one. Technology can drive scale in this business and this we think is why private equity bid $10.35 a share...

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02/03/2022 09:28

Active Income Portfolio

The Income Portfolio was up +0.49% over the course of the week while the month of February saw the portfolio increase by +3.91%, a strong effort through reporting season highlighting the flow of money into the ‘value’ type stocks this portfolio typically targets. Three very strong reactions to solid results came from Service Stream (SSM), Ive Group (IGL) & Smart Group (SIQ), all up between....

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23/02/2022 09:28

Active Income Portfolio

The Income Portfolio was up +1.36% in a tough week for equities while cash sits at ~4%. Magellan (MFG) bounced back +14.98% while Smart Group (SIQ) +10.54% rallied on a good result. AGL Energy (AGL) +9.64% is capturing it’s fair share of the press thanks to a Brookfield backed takeover tilt that was swiftly rejected by the board. They clearly have a similar...

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12/01/2022 09:26

Active Income Portfolio

The Income Portfolio is up +1.97% since our last update although it fell marginally this week, down by -0.20% in a market that lost more than 2% while cash remains at ~4%.  AGL Energy (AGL) was the main winner up +10.30% supported by BHP +5.36% & Alumina (AWC) +3.88%. On the flipside, Metcash (MTS) fell -4.47% while Smart Group...

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22/12/2021 09:26

Smart Group (SIQ) $7.42

I have this salary packaging business in my grandmas portfolio and we’d be happy buyers today. While  it’s not exciting, there are 3 key aspects we like:

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09/11/2021 09:57

SmartGroup (SIQ) $7.95

SIQ has struggled of late after another takeover bid failed to materialise – the original offer was at $10.35 before it was pulled back to $9.25. My logic is after reconsidering the deal TPG still saw excellent value 16% above todays price hence when combined with a forecasted yield of 5.85% we like SIQ for our Income Portfolio and would actually see it as a good place to invest if / when we migrated down the risk curve.

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27/10/2021 09:25

Smart Group (SIQ) $8.08

This week saw the private equity consortium lower their bid for the leasing & salary packaging business Smart Group (SIQ) a stock we bought with a 4% weighting early in 2020 for $6.98 plus we’ve banked 73c in dividend & franking income. MM thought the bid would be successful given the level of cooperation between the parties early on however that was...

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