Tag: Motley Fool

The Bitcoin (CRYPTO: BTC) price is up 6.4% over the past 24 hours. One Bitcoin is currently worth US$64,347 (AU$83,568).

That puts the Bitcoin price at a new all-time high (achieved as I was penning this), replacing the freshly minted record high of US$63,825, which the crypto currency reached overnight.

According to data from CoinDesk, Bitcoin remains heavily traded, with US$72.9 billion worth of the digital currency transacted over the last 24 hours.

At the current Bitcoin price, the world’s most popular crypto asset has a market cap of US$1.2 trillion.

First North American Bitcoin ETF surges

The United States is still awaiting legislative approval to launch the first US listed Bitcoin exchange traded fund (ETF). Though, as Bloomberg reports, a growing number of companies are chomping at the bit to do so. “At least eight firms including VanEck Associates Corp. and WisdomTree Investments now have live applications… with the Securities and Exchange Commission.”

But, much as with the legal cannabis markets, the Canadians have forged ahead without their southern neighbours. Although the name they chose for the pioneering North American Bitcoin ETF could use a bit of work.

The Purpose Bitcoin CAD ETF Non-Currency Hedged (TSE: BTCC.B) – see, told you it was a mouthful – listed on the Toronto stock exchange on 18 February this year. And highlighting investor demand for exposure to Bitcoin without going through a digital wallet or crypto exchange, the ETF saw more than $165 million worth of shares change hands on its first day.

As of yesterday, the Bitcoin ETF reached US$1 billion (AU$1.3 billion) in assets.

The ETF gained 4.9% yesterday (overnight Aussie time), and is up 17.3% year-to-date.

Bitcoin price snapshot

At this time last year, you could have picked up a Bitcoin for US$6,887. That puts the Bitcoin price up 835% over the past 12 months.

Year-to-date the Bitcoin price has gained 121%.

More reading

• The DigitalX (ASX:DCC) share price is up 30% this week
• What’s driving the Bitcoin price higher?
• Will this Nasdaq IPO send the Bitcoin price back to record highs?
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• With the Bitcoin price up overnight your crypto Tesla just got cheaper

Bernd Struben 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 Bitcoin. 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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The Novonix Ltd (ASX: NVX) share price is jumping today. This comes as the lithium battery producer rebounds after falling for the past two days. 

The Novonix share price is up 3.14% to $2.30 at the time of writing. However, it has lost value this week and the past month. 

Novonix’s principal activity includes the development and implementation of a downstream integration strategy. This strategy transformed the business into a supplier of advanced battery materials, equipment, and services to the global Lithium-ion Battery (LIB) market.

To the layman, it’s a lithium battery producer that also specialises in a range of materials and technology for building batteries.

Formerly known as Graphitecorp Limited, Novonix is an integrated developer and supplier of materials, equipment, and services for the global lithium battery industry. The brunt of its operations occurs in the USA and Canada. Novonix also owns a natural graphite deposit in Queensland.

Novonix share price ups and downs

The Novonix share price fell for the past two days. Overall, it has lost ground this week and month. This can generally be seen as a rarity for the surging battery company. Despite this recent slip, Novonix has otherwise enjoyed a year return of 1,087%.

Currently, the share price is down 0.8% this week and 17% this past month. The Novonix share price lost ground in February due to a $115 million placement. Consequently, the equity raising led to an 18% decline in the Novonix share price in the first week of March, which it still hasn’t recovered from.

The company was clearly unprepared for the slow extent of its share price recovery over recent weeks. On 4 March 2021, Novonix announced the deferral of its Share Purchase Plan. This was planned as a capital raising initiative.

On 7 April, it announced it was cancelling the planned placement altogether.

This decision was made following the share price trading below the Share Purchase Plan offer price of A$2.90. It’s still well below that point at the current time. Additionally, Novonix said it has no intention to re-issue the Share Purchase Plan at a lower price.

Novonix and Sayona for the future

Novonix shares have had some good news of late, rising 8% at the beginning of this month after an announcement from emerging lithium miner, Sayona Mining Limited (ASX:SYA).

Sayona plans to conduct product trials with Novonix. These trials will be focused on delivering a clean and green 99.97% lithium hydroxide battery. Furthermore, the produced batteries will be suitable for North American electric vehicle makers. 

That research is set to commence in May.

More reading

• Why the Sayona Mining (ASX:SYA) share price is storming higher today
• Why is the Novonix (ASX:NVX) share price up 8% this morning?
• The Sayona (ASX:SYA) share price is tumbling 5% today
• Piedmont Lithium (ASX:PLL) shares in trading halt after proposed US public offering
• Why the Sayona Mining (ASX:SYA) share price is rocketing 25%

Motley Fool contributor Lucas Radbourne-Pugh 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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Are you wanting to add a growth share or two to your portfolio this week?

Then you might want to take a look at Pro Medicus Limited (ASX: PME).

What is Pro Medicus?

Pro Medicus is a healthcare technology company that provides radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions to healthcare organisations globally.

The company’s RIS offering covers everything from medical accounting, clinical reporting, appointments, scheduling, marketing and management information applications.

But the key product in its arsenal is arguably the Visage 7 Enterprise Imaging Platform. It is fast, clinically rich, and highly scalable growth platform deliverable entirely from the cloud or on premise.

Management notes that Visage 7 supports the simplicity of a One Viewer philosophy, that enables diagnostic, clinical, specialty, research, and mobile imaging workflows from a singular platform. It also offers future-proof flexibility with enterprise workflow, vendor-neutral archive, and artificial intelligence solutions that are all 100% native to Visage 7.

Strong demand

Due to the quality of this technology and the need for healthcare organisations to shift away from legacy systems, Pro Medicus has been winning a lot of lucrative contracts.

This has underpinned strong earnings growth, even during the pandemic.

For example, for the six months ended 31 December, Pro Medicus delivered a 7.8% increase in revenue to $31.6 million and a 25.9% jump in underlying profit before tax to $18.76 million.

Positively, since the end of the half, the company has continued to win a number of lucrative long term contracts with major healthcare institutions.

Can the Pro Medicus share price climb higher?

Although the Pro Medicus share price is up 33% since the start of the year, one leading broker believes it can still go higher.

In February, Goldman Sachs upgraded Pro Medicus’ shares to a buy rating with a $53.80 price target. This price target implies potential upside of 15% over the next 12 months.

Goldman believes it is well-positioned to grow its earnings at a rapid rate over the coming years.

It explained: “Whilst not cheap in absolute terms, our new estimates imply a +42% EBITDA CAGR (FY20-23E). In the context of ASX Healthcare, which trades at a ‘multiple to growth’ ratio of 2.9x, we do not see PME’s ratio of 1.4x as demanding, particularly given its position as a technology leader in a market we believe is set for further technology upgrades, and a recurrent revenue model with inherent upside.”

More reading

• 2 excellent ASX shares to buy in April
• 3 great reasons to own Pro Medicus (ASX:PME) shares
• 2 highly rated ASX growth shares to buy now
• Here’s why the Pro Medicus (ASX:PME) share price is charging higher
• 2 exciting ASX growth shares to buy next month

James Mickleboro 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 Pro Medicus Ltd. The Motley Fool Australia has recommended Pro Medicus Ltd. 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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The Vulcan Energy Resources Ltd (ASX: VUL) share price is surging again today following the company’s reveal of a pilot plant to extract lithium from the Upper Rhine Valley.

The Vulcan share price is up 8.9% to $6.93 today in its third successive day of gains on the S&P/ASX 200 Index (ASX: XJO).

A quick take on the company

Vulcan is focused on lithium supply solutions to European electric vehicle manufacturers, a booming market at the current time.

Principally, it is engaged in exploring and developing copper-zinc projects and other mineral opportunities. The company’s projects are located in the Trondelag region in Norway, namely the Lokken, Tverrfjellet, Grimsdal, Killingdal, and Storwartz projects.

Additionally, the company acquired the Vulcan Lithium Project in Germany which comprises the production of battery-grade lithium hydroxide from geothermal brines. Its operating segment includes energy metals exploration in Germany; copper and zinc mineral exploration in Norway, and administration.

This is where its current pilot plant is staged, in the Upper Rhine Valley that connects Germany and Switzerland.

Vulcan’s pilot plant for lithium extraction

Vulcan has designed, built, commissioned and is now operating its pilot plant to demonstrate direct lithium extraction (DLE) from Upper Rhine Valley geothermal brine.

Vulcan is using live geothermal brine from existing wells in its piloting programme for DLE and brine chemistry test work. Vulcan is working with major suppliers, including one of the world’s largest company’s, DuPont, to test DLE products similar to those already used commercially in the lithium industry, on Upper Rhine Valley geothermal brine.

Given the highly publicised boom in demand for lithium – a key element in powering electric batteries – the Vulcan share price has been rocketing over recent months.

What next?

Vulcan is now focused on demonstrating pre-treatment and DLE processes, as well the durability of the process over hundreds of cycles, which will feed into its definitive feasibility study.

Vulcan will use the data from the pilot plant to inform and finalise the design of a larger demonstration plant, which will also contribute information towards the DFS.

Vulcan’s technology partners and internal experts have indicated that key process operations will scale up to a commercial level with minimal risk from the demonstration scale.

What Vulcan management says

Vulcan managing director Dr Francis Wedin was bullish about the company’s progress, saying:

Getting our pilot plant up and running on live geothermal brine is a significant milestone for Vulcan. This has already started producing crucial data needed for de-risking the lithium extraction process. It took less than 6 months to design, build, and commission the pilot plant.

This aggressive timeline was enabled by the project’s world-class technology partners and location in Germany, where access to chemical engineering expertise is unparalleled.

This is a critical step towards our strategy of producing lithium hydroxide, using our unique Zero Carbon Lithium process, for the European battery electric vehicle market, and building a combined renewable energy and chemicals business.

Vulcan share price snapshot

The Vulcan share price has lifted 151% in 2021 so far. It’s also up 2,930% over the past 12 months.

More reading

• Why the Vulcan (ASX:VUL) share price is on watch
• These 3 ASX companies are leading the way to net zero emissions
• Why Kathmandu, Pushpay, Sigma, & Vulcan shares are storming higher
• Why the Vulcan Energy (ASX:VUL) share price is charging 9% higher
• Why Corporate Travel Management, Silver Lake, Volpara, & Vulcan are pushing higher

Motley Fool contributor Lucas Radbourne-Pugh 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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Time does go by fast, doesn’t it? It’s now mid-April, which means that the end of the financial year is just 2-and-a-half months away. And the end of the financial year walks hand-in-hand with tax time.

While some (if not most) of us find tax time, well… taxing, it is, unfortunately, part of the deal for anyone who invests in ASX shares. So let’s have a quick look at what kind of considerations you need to think about when it comes to taxes and shares. None of this is anything more than general advice, so make sure you also speak to your tax professional too!

Dividends

The Australian Taxation Office (ATO) typically views dividend income as regular income. That means that any dividends you receive from your ASX share portfolio will have to be added to your personal income for tax purposes. However, that does come with a caveat. If your ASX dividends also come with franking credits (which many do), you are entitled to claim those credits as a tax deduction. If you have no taxable income (if you receive a government or superannuation pension for example), you may still be able to claim those franking credits as a cash refund. 

One more thing to remember. If you have your dividends set to automatically reinvest under a dividend reinvestment program (DRIP), the ATO will still treat these dividends as income, even though you didn’t receive an actual cash payment. 

Capital gains tax

If you buy an ASX share, and sell it later for a profit, the gained amount is also taxable income from the ATO’s perspective. However, the taxation of capital gains functions a little differently than that on other forms of income. If you have held an ASX share longer than one year, you may be able to claim a 50% discount on your CGT. Yet another incentive to invest for the long-term! Further, if you have previously sold shares for a loss, you can use that capital loss to offset any gains you have made subsequently. 

Deductions

Under ATO rules, any expenses that you may incur in the course of investing in, or receiving income from, ASX shares may be tax deductible. That might include tax agent expenses, investing courses, publications or services, or accounting software fees. Of course, this can vary from person to person, and from investment to investment. So again, make sure you check with your tax professional. But you also want to make sure that you claim a deduction for any expenses you are legally entitled to. 

More reading

• The Vulcan (ASX:VUL) share price has rocketed 9% today. Here’s why
• Top fundie picks this ASX 200 resource share for the EV revolution
• 2 quality ASX shares rated as top buys by brokers
• Why is the Candy Club (ASX:CLB) share price falling today?
• Why BWX, Fortescue, Webjet, & Zip shares are dropping

Motley Fool contributor Sebastian Bowen 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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S&P/ASX 200 Index (ASX: XJO) resource shares are in the spotlight this year as talk of a new commodity super cycle percolates through the financial markets.

Today we drill down to a single ASX 200 resource share. One primarily involved in exploring for and producing lithium.

Why lithium?

Because, though you may not yet notice it here in Australia, the electric vehicle (EV) revolution is well and truly underway.

Elon Musk’s Tesla Inc (NASDAQ: TSLA) is likely the first to spring to mind when you think about EVs. But the world’s biggest car manufacturers by production figures, including Ford Motor Company (NYSE: F) and Volkswagen are close on Musk’s heels with plans to go all-electric over the coming years.

The EV effect

EVs may not require any oil or gas. But, as the name implies, the lithium-ion batteries that power most of them do require lithium to get the cars from point A to B. And, perhaps after a little charging, back to point A.

The majority of analysts believe that growing demand from the battery boom will continue to support the soaring lithium price in the foreseeable future.

According to Argonaut Funds Management chief investment officer David Franklyn (quoted by the Australian Financial Review), “The tipping point is here. Even a year ago, it would have been hard to believe that one of the world’s major car brands would make a comprehensive switch to electrical vehicles.”

With nary a car manufacturer in sight on the ASX 200 (or anywhere in Australia), Aussie investors can still get aboard the EV revolution.

As Franklyn says:

We believe that resource companies are the best way to gain exposure to the EV thematic, as the rapid growth in the EV market will create enormous additional demand for commodities such as copper, nickel, cobalt, lithium and rare earths. It is unlikely that supply will keep pace with demand, given the long lead times involved in bringing a new mine into production, so prices are likely to move higher.

Franklyn adds, “We see this as a multi-decade transition and Australia is perhaps best placed to capitalise, given its huge resource endowment, its strong legal and financial systems and strong ESG frameworks.”

Why this ASX 200 resource share is ideally placed

According to Argonaut Funds Management’s Franklyn, companies that are able to ramp up production of core elements like lithium and nickel are likely to reap the biggest early rewards as increased demand from the fast-growing EV market fuels higher prices.

Franklyn points to ASX 200 listed IGO Ltd (ASX: IGO) as being “ideally positioned” to benefit:

IGO is ideally positioned as our preferred EV exposure, given its existing highly profitable nickel operations and its proposed acquisition of a 25 per cent interest in the Greenbushes lithium mine and a 50 per cent interest in the associated lithium hydroxide plants.

Greenbushes produces about 20 per cent of global lithium supplies and has the capacity to ramp up production quickly, and the integrated nature of its operations enables it to capture more margin and provides a secure supply source for major battery manufacturers.

IGO share price snapshot

Over the past 12 months, IGO shares have gained around 38%, handily beating the 28% gains posted by the ASX 200.

Year to date, the ASX 200 resource share’s price is up 2%. At the current share price of $6.85, IGO has a market capitalisation of $5.2 billion. IGO pays an annual dividend yield of 0.74%, unfranked.

More reading

• Why Tesla stock soared higher on Tuesday
• The stock that I’d hold for the next 5 years: fundie
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• Tesla and Palantir were some of the most popular US shares last week
• ASX 200 flat: Zip rockets, Cleanaway higher, Regis-IGO announce Tropicana deal

Bernd Struben 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 Tesla. 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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The two ASX shares in this article could be quality ideas to consider. Brokers have rated the stocks in this article as buys.

Baby Bunting Group Limited (ASX: BBN)

Baby Bunting is an ASX retail share that’s liked by multiple brokers.

One of the brokers that likes Baby Bunting is Morgans, which rates Baby Bunting as a buy. The price target for the next 12 months is $6.39.

Morgans thinks that Baby Bunting has multiple growth avenues. The expansion into New Zealand will help the growth of the business for longer. 

Despite a higher price/earnings ratio than others in the retail space, the broker thinks that Baby Bunting is worthy of it due to the better growth prospects.

The FY21 half-year result revealed a lot of growth. Total sales of $217.3 million was 16.6% higher than the prior corresponding period. The comparable store sales growth was 15% (or 21.8% excluding Victoria), with total online sales growth of 95.9%.

Baby Bunting’s gross profit margin increased 41 basis points, helping pro forma underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grow by 29.7% to $18.5 million and pro forma net profit after tax (NPAT) rose 43.5% to $10.8 million.

The ASX share may be on track to deliver more growth in the second half of FY21 with comparable store sales growth of 18.5% in the first six weeks.

In New Zealand, the business is looking to open at least 10 stores, with the first to be opened in FY22.  

Bega Cheese Ltd (ASX: BGA)

Bega Cheese is another ASX share that is liked by multiple brokers, including Morgans.

The broker has a 12-month share price target on Morgans of $6.80.

One of the main reasons that Morgans is positive on the business is the acquisition of Lion Dairy and Drinks. This expanded the business into new branded dairy categories such as yoghurt, white milk and flavoured milk and provides exposure to new dairy regions across the country.

Both Bega management and the broker are expecting to unlock significant synergies from the acquisition.

Executive Chair Barry Irvin said:

The acquisition delivers important industry consolidation and value creation with synergies across the entire supply chain. The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company.

Bega said that the acquisition provides a platform for further growth in international markets and provides a market presence to support innovation.

The ASX share’s FY21 half-year result showed a lot of growth, particularly in the bulk segment, though COVID-19 impacts on the infant formula category were a negative.

Half-year normalised earnings before interest and tax (EBIT) went up 79% to $48 million and normalised profit after tax grew 98% to $29.7 million. Statutory earnings per share (EPS) rose by 141% to 9.6 cents.

According to Morgans, the Bega Cheese share price is valued at 22x FY22’s estimated earnings with an expected FY21 grossed-up dividend yield of 2.2%.

More reading

• Brokers think these 2 top ASX shares are buys in April 2021
• These top 2 ASX shares should be on your watchlist
• 2 ASX shares that may be hit by Australia’s declining birth rate

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Baby Bunting. 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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The Candy Club Holdings Ltd (ASX: CLB) share price is falling today after the company raised $20 million via private placement and debt financing. At the time of writing, the Candy Club share price is trading at 23 cents per share.

Candy Club is a confectionary retailer. The business primarily engaged in both business-to-consumer (B2C) and business-to-business (B2B) markets. Candy Club is established in the US market, however, it also has an Australian presence.

Under its B2C business, the company sells subscriptions plans for its Candy Boxes in the USA. Furthermore, the B2B business involves the selling of Candy Club branded confectionery to specialty market resellers in the USA. 

Why is Candy Club raising the capital?

Candy Club’s announcement today is regarding the successful completion of an institutional placement. This comes from the issue of 48.6 million fully paid ordinary shares at 22 cents per share to raise approximately $10.7 million before costs.

Candy Club’s wholly-owned US subsidiary, Candy Club Holdings Inc., has also secured US$7.5 million (A$9.84 million) in debt funding. This comes from Venture Lending & Leasing IX Inc. who is a part of a leading Silicon Valley equity/debt venture firm called Western Technology Investment (WTI). 

Candy Club says the capital raised is “to be invested in considerably scaling the business”. The funds raised under the placement will be used for:

• Acquisition of Inventory – $4.4m
• Customer Acquisition Lead Generation campaigns – $1m
• CAPEX – $500k
• Increased Sales Staff – $500k
• General Working Capital – $3.8m
• Costs of the offer – $500k

What Candy Club management said

Candy Club chair James Baillieu explained the debt and placement combination: 

By bundling the WTI debt deal with the placement, we substantially reduced the amount of shareholder dilution to reach our new capital target, as well as raising from institutions and sophisticated investors a large amount of equity successfully at only a small discount to market price.

Candy Club share price snapshot

The Candy Club share price losses today are part of a broader trend. Furthermore, the company’s share price has declined by 12% this month.

However, this comes against large gains over the past 12 months. Candy Club’s share price has risen 528% in that timeframe, beating the consumer defensive sector by 525%.

It’s also up 67% in 2021 so far.

More reading

• In honour of the Easter Bunny, we take a look at 3 chocolatey ASX shares

Motley Fool contributor Lucas Radbourne-Pugh 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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The S&P/ASX 200 Index (ASX: XJO) is on form on Wednesday and charging higher. At the time of writing, the benchmark index is up 0.5% to 7,014.2 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

BWX Ltd (ASX: BWX)

The BWX share price is down 3.5% to $4.94. This is despite there being no news out of the personal care products company today. However, prior to today, the BWX share price was up 23% since the start of the year. This could have led to some investors taking a bit of profit off the table today.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price has fallen over 1% to $20.14. The catalyst for this decline appears to be a broker note out of Goldman Sachs this morning. According to the note, the broker has downgraded the iron ore producer’s shares to a sell rating with a reduced price target of $18.90. Goldman notes that that Fortescue’s shares are changing hands at 1.4x net asset value (NAV). This compares unfavourably to BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), which are trading at 0.95x NAV.

Webjet Limited (ASX: WEB)

The Webjet share price is down 2.5% to $5.17. On Tuesday analysts at Morgans put a hold rating and $4.92 price target on the online travel agent’s shares. It was surprised that Webjet has raised capital for a third time since COVID-19 began. And while it notes that the capital raising has reduced its refinancing risk, it doesn’t see enough value in its shares at this level to rate it as a buy.

Zip Co Ltd (ASX: Z1P)

The Zip share price has given back its morning gains and is down 1.5% to $9.59. While most brokers have responded positively to Zip’s strong third quarter update, one broker has held firm with its bearish stance. This morning UBS retained its sell rating and lifted its price target slightly to $6.50. This implies potential downside of 32% over the next 12 months.

More reading

• How does Afterpay’s (ASX:APT) growth rates compare to peers?
• Top brokers name 3 ASX shares to buy today
• Are brokers bullish on the Zip (ASX:Z1P) share price after quarterly results?
• ASX 200 up 0.6%: Zip rises, Resolute rockets, tech shares storm higher
• Fortescue (ASX:FMG) share price tumbles on broker downgrade

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended BWX Limited and Webjet Ltd. 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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Wilson Asset Management (WAM) is well known for its stable of listed investment companies (LICs). Over the past two decades, WAM has gone from offering one flagship LIC — WAM Capital Limited (ASX: WAM), established in 1999 — to seven. Its most recently launched LIC was Wam Alternative Assets Ltd (ASX: WMA). WAM Alternative Assets debuted last year after WAM purchased the embattled Blue Sky Alternative Assets LIC. 

Before that, WAM Launched Wam Global Ltd (ASX: WGB) back in 2018. At the time, WAM Global was the first WAM LIC to have a mandate to invest in companies beyond the ASX.

But today, we have confirmation that an eighth LIC will join the Wilson Asset Management stable.

WAM Strategic Value to launch next month

A report in the Australian Financial Review (AFR) this week unveiled the newest LIC as ‘WAM Strategic Value’. And in an email to investors yesterday, WAM has confirmed the accuracy of the AFR report. 

The new LIC will be headed by WAM founder Geoff Wilson himself as lead portfolio manager. That’s a role that is typically delegated in other WAM LICs. WAM Strategic Value looks set to IPO on the ASX next month or two. A prospectus is to be released in “early May”. 

This LIC will depart from the ASX share value investing strategy of most of WAM’s other LICs. Here’s what WAM described the new LIC’s mandate as:

WAM Strategic Value will focus on identifying and capitalising on share price discounts to underlying asset values of listed companies, primarily listed investment companies (LICs), listed investment trusts (LITs) and other closed-end investment vehicles.

The AFR report argues this could be a fertile hunting ground for WAM. That’s because there are dozens of LICs on the ASX that are currently trading for less than the value of their net tangible assets. It’s also a strategy WAM has incorporated into its largest LIC, WAM Capital.

Over the past year, WAM Capital made moves to purchase both the Concentrated Leaders Fund (ASX: CLF) and the Contango Income Generator (ASX: CIE). Clearly, the company thinks it is onto a winning strategy here. 

More reading

• Is the Amaysim (ASX:AYS) share price really tumbling 70% today?
• 11 top ASX shares that WAM thinks will make great buys

Motley Fool contributor Sebastian Bowen owns shares of WAM Research Limited and WAMGLOBAL FPO. 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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