Your thoughts on GQG Partners (GQG), SmartGroup (SIQ), and Dicker Data (DDR)

Hi Paul,

Three stocks as you say but nothing too onerous:

• GQG Partners (GQG): We bought GQG into its sharp sell-off on Friday believing the drop was  overdone, we’ve had our eyes on this one for a while and with $US1 billion of the outflows tied to a single institutional client, we feel the almost 15% drop was an overreaction providing an attractive entry point. Earnings growth comes from increase in FUM and/or performance fees – both of these drivers are under pressure, so for now, this is more about income and valuation.  Growth in the SP could still come from a revaluation of the earnings multiple (now trades on 8x), but is less likely at the business level in the near future.
• That said, the market is rightly concerned about futher outflows due to recent underperformance accross their strategies. We do think they’ll see more outflows, but the market is already pricing these in our view. Given the trend here, we have taken an initial 3% position, believing the stock is high risk.
• SmartGroup (SIQ): We still like SIQ ~$8 initially targeting the $8.50 while also yielding an estimated fully franked 5% over the next 12-months. No plans to make it “Inactive” at this stage.
• Dicker Data (DDR): We still like DDR, initially targeting $9.50, or 5% higher while yielding close to 5% fully franked over the next 12-months. DDR is marked as “High Risk” for our Income Portfolio, due to operational struggles through 2024, hence the relatively small 3% position size. DDR relies significantly on debt financing hence a series of rate cuts over the coming year should be supportive of the share price.

In terms of tariffs, they have no specific issues but as we saw in April if concerns again escalate and selling becomes indiscriminate, they are likely to struggle.

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Dicker Data Ltd (DDR)

LAST UPDATED 07/08/2025 12:50

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Dicker Data Ltd (DDR)

LAST UPDATED 07/08/2025 12:50