Day: January 14, 2021

4 ASX shares that helped this fund outperform in December

Best asx shares represented by multiple hand reaching for winners cup

Wilson Asset Management has released its December 2020 investment update for its 7 listed investment companies including WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

Here’s how the fund performed last month, and the ASX shares it has been buying to deliver a strong investment portfolio performance. 

WAM Capital

The WAM Capital investment portfolio focuses on undervalued growth opportunities in the ASX. The portfolio has increased 22.8% in the financial year to date, outperforming the index by 7.1%. 

In December, WAM Capital investment portfolio outperformed the All Ordinaries Index (ASX: XAO). The ASX shares that led to its outperformance included affordable accommodation and services provider Ingenia Communities Group (ASX: INA) and mortgage broker and financial solutions provider Australian Financial Group Ltd (ASX: AFG)

WAM Capital is focused on translating portfolio returns into a market leading, sustainable source of income for its shareholders. The company has more than a decade of increasing or steady dividends, and currently has a fully franked dividend yield of approximately 7%. 

WAM Leaders 

The WAM Leaders portfolio takes a much more active approach to investing in the highest quality Australian companies. The portfolio has increased 17.1% in the financial year to date, outperforming the S&P/ASX 200 Index (ASX: XJO) by 3.9%. 

The portfolio’s outperformance in December was driven by ASX shares in the materials and mining sector.

IGO Ltd (ASX: IGO) is an exploration and mining company producing nickel, copper and gold. Its share price ripped 45% in December following stronger nickel and copper prices, as well as the company’s acquisition into the lithium sector. WAM sees the entry into lithium as one that aligns with its long term strategic plan to support the structural shift into battery storage. IGO noted that electric vehicle sales are expected to grow approximately 18% per annum through to 2030. 

BHP Group Ltd (ASX: BHP) was also another significant contributor, driven by higher iron ore, oil, nickel and copper prices. WAM expects oil prices to be supported by a continued recovery in COVID-related demand such as travel and industrial production in the near term. WAM is also constructive on nickel and copper for the same reasons relating to electric vehicle sales that were noted in IGO. 

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Returns As of 6th October 2020

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Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Top fundie Hamish Douglass warns of ASX share market FOMO

colourful post it notes on wooden table with words illustrating cycle of fomo in the share market

It’s fairly safe to say that investors all over the world have been enjoying some pretty healthy gains from the sharemarket over the past 10 or so months. Since bottoming out in late March, both the S&P/ASX 200 Index (ASX: XJO) and the American S&P 500 Index (INDEXSP: .INX) have rallied convincingly. The US markets are even currently above the level they were sitting at before the coronavirus pandemic become obvious.

With such a surprisingly good year for investors, many are now turning to 2021 and hoping for at least ‘more of the same’.

However, one ASX fund manager isn’t too excited that those investors will get what they wish for.

Top ASX fundie weighs in

Hamish Douglass is the co-founder and chief investment officer of Magellan Financial Group Ltd (ASX: MFG). He is regarded as one of the best fund managers in the country. This is evidenced by Magellan’s current market capitalisation of $8.8 billion, with more than $100 billion in assets under management. Mr Douglass’ significant stake in Magellan makes him a billionaire. The size of Magellan is largely built on its consistent track record of performance. The company’s flagship Magellan Global Fund (ASX: MGF) has returned an average of 15.56% per annum over the past 10 years.

So Mr Douglass is evidently someone who many ASX investors pay attention to.

According to a report in the Australian Financial Review (AFR), Mr Douglass is a little worried about the current state of global markets. He suggests to the AFR that the gains that markets have experienced in the past few months are motivated by a dangerous “fear of missing out [FOMO]”, and that he feels that the majority of investor sentiment right now “remains worryingly bullish… which is out of step with the economic and scientific reality of the pandemic”.

He notes the “positive developments” and “‘best possible scenario’ outcome” of the recent success of several COVID-19 vaccination candidates. Together with the results of the recent US elections, this has been a “nirvana outcome” for investors. Even so, Douglass is still recommending caution:

This pandemic, which I would argue is still going on, is an issue of scientific complexity that the market seems to be somewhat oblivious of in terms of the risks still in front of us… We’ve been much more worried about downside protection than upside.

“We don’t bet big on vaccine trials”

The report notes that many of Magellan’s funds have not outperformed their benchmark indices over the past few months. Over the period, Magellan’s Global Equity Strategy held roughly 50% of its assets in cash at times. Also augmented by “very high-quality defensive equities”. That was deliberately opposed to holding “growth stocks”. However, Mr Douglass remains unapologetic, stating:

We’re never going to bet big on [vaccine trials]. When you have a bias built in to protect capital, you’re not going to participate in a very discretionary-led rally like this. You would expect us to lag a one in 50-year rally like this.

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Motley Fool contributor Sebastian Bowen owns shares of Magellan High Conviction Trust. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Douugh (ASX:DOU) share price still in limbo. Here’s why.

The Douugh Limited (ASX: DOU) share price remains suspended today as the company released a response to an ASX query regarding potential breaches of its recent acquisition of Goodments.

This is now the fourth week that shares in the tech minnow have been suspended. As such, the Douugh share price remains static at 17 cents.

Douugh offers response

Today is the second time this week that the fintech has responded to the ASX Ltd (ASX: ASX) query.

Douugh was asked for particular dates regarding the deal to acquire Goodments, and responded as follows:

On Wednesday, 21 October 2020, CEO Andy Taylor started discussions about a potential opportunity with Goodments. Discussions between the company and Goodments progressed over the course of November 2020 however negotiations remained incomplete during this period – terms of the transaction had not been put to the company’s board and not every aspect of the transaction had been confirmed.

With no final deal being reached, negotiations continued until 9 December when an agreement was reached between the companies. They signed a non-binding term sheet which included the indicative terms and provisions regarding the acquisition of Goodments business.

Following this, the Douugh claimed it complied by confirming the acquisition of Goodments with the ASX. This confirmation was received on 18 December.

Douugh maintains innocence

The company also said it has complied with the listing rules of the ASX, and in particular rule 3.1. This rule being that, “Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information.”

Douugh will now await the ASX’s response.

About the Douugh share price

Douugh describes itself as a ‘capital lite’ fintech, taking an articial intelligence (AI) first approach to disrupting banking. Through its app, the company aims to help users grow and manage their money to live a financially better life.

Listing in 2020, the company generated huge initial interest from investors, becoming one of the most traded stocks on the ASX at the time.

However, despite an early surge in the Douugh share price up to highs of 49 cents in October, shares in the troubled company currently sit at 17 cents.

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Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Why the Bigtincan (ASX:BTH) share price is edging higher today

tech shares

The Bigtincan Holdings Ltd (ASX: BTH) share price is edging higher today following the software company announcing its acquisition of US-based artificial intelligence company VoiceVibes .

In the opening minutes of trade, the Bigtincan share price reached an intraday high of $1.08. However, its shares have slightly retraced to $1.03, up 1.4% at the time of writing.

What was announced?

According to Bigtincan’s release, the company’s United States subsidiary, BTC Mobility, completed a stock purchase agreement with shareholders of VoiceVibes. The fulfilled arrangement saw BTC Mobility acquire 100% of the issued capital of VoiceVibes for US$2 million.

The purchase was made possible through Bigtincan tapping into its existing cash reserves. An institutional placement conducted in December set the company up to fund the acquisition.

Bigtincan advised it does not expect the recent takeover to have a material impact on its earnings for FY21.

Who is VoiceVibes?

Located in Baltimore, Maryland, the company specialises in voice analytics through use of artificial intelligence. The company’s automated coaching platform lets users make the best impression of themselves when speaking by receiving feedback called “vibes”.

Known to have one of the world’s largest data sets, VoiceVibes can measure human perception of voice. The proprietary technology is designed to understand how humans perceive emotion and intention from voice.

The technology is used by an array of organisations seeking to develop communications coaching, sales readiness, presentation skills practice, and interviewing.

When Bigtincan adds the VoiceVibes technology to its core sales enablement automation system, the company says it will be able to offer automated coaching and sales guidance to its customers.

What did management say?

Bigtincan co-founder and CEO Mr David Keane touched on the acquisition, saying:

VoiceVibes’ AI-powered coaching platform helps professionals make the best impression, every time they speak. By adding the patented VoiceVibes technology, Bigtincan expands our lead in AI for sales enablement and helps our customers train their sellers faster.

Adding to Mr Keane’s comments, VoiceVibes CEO Debra Cancro went on to say:

This is an exciting time for VoiceVibes. Joining forces with Bigtincan at this stage enables us to accelerate the application of our patented AI technology and provide cutting-edge insights into sales coaching and training.

Bigtincan share price snapshot

The Bigtincan share price is up almost 40% since this time last year, reflecting investor confidence in the company’s operations.

In March, its shares reached a low of 26.5 cents following COVID-19, before storming to a high of $1.60 in October.

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When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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