In This Article:
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WAM Capital Outperformance: Outperformed the All Ordinaries Index by 14% and the Small Ordinaries Index by 17%.
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WAM Research Outperformance: Outperformed the All Ordinaries Index by 18% and the Small Ordinaries Index by 21%.
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WAM Microcap Outperformance: Outperformed by 12%, marking the seventh consecutive year of outperformance since IPO.
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WAM Active Outperformance: Outperformed its benchmark by 26%.
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Dividend Yield: WAM Capital trading at a fully franked dividend yield of around 10%.
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Net Tangible Assets (NTA): Declined by about 5% per year due to high dividend payouts.
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Dividend Coverage: 1.5 years of dividend coverage in profit reserve, up from 0.7 the previous year.
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Premium to NTA: Historically traded at a 16% premium; currently at parity with NTA.
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Small-Cap Performance: Small-cap companies underperformed by 2% in August, compared to a 0.4% increase in the broader market.
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Sector Performance: Healthcare and financial services sectors performed well, with companies like Healius and Judo Bank outperforming.
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New Zealand Market: Experienced a 30% decline in foot traffic in June and July.
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Warning! GuruFocus has detected 2 Warning Sign with ASX:WAM.
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Release Date: September 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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WAM Capital Ltd (ASX:WAM) outperformed the market significantly, with WAM Capital outperforming by 14% and WAM Research by 18% against the All Ordinaries Index.
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The company successfully deployed all proceeds from a $90 million capital raise in April, with strong performance from the invested stocks in the June quarter.
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WAM Active outperformed its benchmark by 26%, benefiting from increased capital markets activity and discounted stock lines.
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The company has a strong dividend yield, trading at a fully franked dividend yield of around 10%, compared to the market average of 4%.
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WAM Capital has 1.5 years of dividend coverage in its profit reserve, an improvement from 0.7 years the previous year, indicating better dividend sustainability.
Negative Points
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The share price of WAM Capital has declined over the past 12 months, despite strong performance, attributed to cyclical factors and a reduction in premium to net tangible assets.
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There has been a lack of expected capital markets activity, with only one initial public offering invested in since the April capital raise.
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Small-cap companies have underperformed larger companies, with a 2.4% headwind in the small-cap sector during the reporting season.
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The company faces challenges with the underperformance of small caps, which is seen as cyclical but has persisted into the 2025 financial year.
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The dividend payout is high, requiring the portfolio to increase by over 16% annually just to maintain the current dividend level, which has led to a decline in net tangible assets.