The Market Matters Emerging Companies Portfolio targets small & mid capitalisation emerging stocks (ex-100) that show strong underlying growth characteristics – Click here to view
The Emerging Companies Portfolio had a very tough week down -4.59% with cash sitting ~4%. A lot of the growth names were on the nose with rotation into defensives. Nitro (NTO) was hit hard following a miss to guidance for US based peer DocuSign (DOCU US) while Strandline (STA) and Coronado (CRN) were both stronger. We are pulling the trigger on some changes to the portfolio today, taking some profits and adding to some positions.
Our likely portfolio moves today:
- Lynas Resources (LYC) – it’s been one of the best positions in the portfolio this year but now looks over extended with some execution risks ahead. We are taking a ~60% profit around $8.90 today, and will revisit on any meaningful pullbacks.
- Pilbara Resources (PLS) – another strong position for the portfolio, however we are becoming more concerned about the short term direction of lithium. We are taking a ~25% profit, selling around $2.35 today, again looking to revisit into weakness.
- Aussie Broadband (ABB) – a position we bought recently with the plan to add to into any weakness. We see value below $5 particularly with the Over The Wire (OTW) deal now in the works. We are adding 2% to the position, taking the holding to 6%
- Nitro (NTO) – as mentioned, the stock was hit following a miss from US listed DocuSign. Nitro trades at a steep discount to its US based peers and has recently added to its offering with the acquisition of Connective. We are adding 2%, to take the position to 6%
- Bapcor (BAP) – one we have liked and traded well in the past. The management merry-go-round has created a buying opportunity in a solid business with a strong sector tailwind. We are likely buyers today with an initial 4% weighting around $6.75
