It’s reporting season and some shares are already reporting their FY20 half-year results and declaring their dividends. WAM Global Limited (ASX: WGB) is the latest share to release its HY20 report.
If you don’t already know WAM Global, it’s a listed investment company (LIC) which mostly focuses on international shares.
Here are the main details from WAM Global’s half-year result to 31 December 2019:
Profit and investment returns
WAM Global reported that its operating profit after tax increased by 186.3% to $27.2 million. Operating profit before tax rose by 185.7% to $38.8 million.
For the six months to 31 December 2019 WAM Global’s investment portfolio delivered a return of 8.8% before expenses, taxes and fees, which underperformed the MSCI World Index (AUD) by 0.2% but outperformed the MSCI World SMID Cap Index by 0.7%. This performance was delivered with an average cash level of 8.3% during the period.
Over the 12 months to December 2019 WAM Global’s portfolio has returned 28.2% before fees, expenses and taxes. This outperformed the MSCI World Index by 0.3% and outperformed the global small & midcap index by 1.2%.
Some of the shares that helped the performance were UK-listed content business Entertainment One which went up 40.3%, Japanese discount supermarket chain Kobe Bussan which went up 43.4% and European entertainment & ticketing company CTS Eventim which climbed 37.2%.
WAM Global declared its first dividend six months ago with the full year result of 2 cents per share. Wilson Asset Management usually pays the same half-year dividend for two results before an increase, but WAM Global has declared an interim dividend of 3 cents per share, which is an increase of 50% compared to six months ago.
Is WAM Global a buy?
One of the main things to consider with LICs is to look at the price they’re trading at compared to their net tangible assets (NTA) per share. According to Chairman Geoff Wilson’s update, WAM Global is trading at a discount of 11.3% to its NTA compared to the closing share price yesterday.
WAM Global is going to try to keep delivering solid returns and growing its fully franked dividend. It now has a profit reserve of 19.6 cents per share.
At the end of December 2019 its biggest five holdings were HCA Healthcare, Thermo Fisher Scientific, American Express, Airbus and Logitech.
I think WAM Global would be a solid buy at today’s discounted price, it’s hard to find many quality shares at good prices at the moment. I’d be quite happy to buy some shares, particularly if its forward grossed-up dividend yield is 3.9% and likely to keep going higher in future results.
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Motley Fool contributor Tristan Harrison owns shares of WAMGLOBAL FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020