Hi Sidney,
The DRO result in late April was solid in our opinion and the markets agree pushing the stock higher, hitting new 7 month highs this week:
- First-quarter revenue of $33.5 million, was up 102%, its strongest quarter ever.
- Recurring software revenue ramped up with DRO’s SaaS revenue increasing 198% to $1.67 million in the quarter.
- The company holds $197mn in cash and no debt.
JP Morgan and State Street have been buying/selling DRO as custodians, so this is likely to be a holder who has simply changed their custodian i.e. no change in beneficial ownership but a change of service provider by the owner of the shares – it’s not significant
The VanEck RMBS ETF The VanEck Australian RMBS ETF (ASX: RMBS) is a newly launched exchange-traded fund that provides investors with access to a portfolio of high-quality, AAA-rated Australian residential mortgage-backed securities (RMBS). It is the first ETF of its kind listed on the ASX, with RMBS exposure generally gained through unlisted funds. Realm for instance, who owns the brand Dominion which recently listed DN1 (which we like and wrote about here) is a well-regarded manager of Residential Mortgage-Backed Securities (RMBS).
This is an asset class we like and view generally as safe if staying in the investment grade area where this new ETF will invest. However, at this stage, we prefer to invest through a manager who has a good track record over a new ETF, but we will look more into their methodology and how they construct and manage the portfolio, as it’s an area we like and a genuine alternative to Hybrid securities.
For those not familiar with RMBS, they are securities underpinned by a bunch of residential mortgages that get packaged up (securitised) and sold to investors. If you believe Australian property is a solid investment, then RMBS is worth considering.
We remain bullish US stocks and in particular Microsoft (MSFT US) and Meta Platforms (META US) within the “Magnificent Seven”. Microsoft remains a core holding in our International Equities Portfolio, and we expect that to be the case for many years to come.
