The WAM Global Ltd (ASX: WGB) share price has risen 2.5% over the past week on the back of its parent company Wilson Asset Management (WAM) releasing its market update for the month of June.
WAM reported that WAM Global’s Net Tangible Asset (NTA) per share has risen 3.6% to $2.31. This is a promising result from WAM’s newest Listed Investment Company (or LIC) and the only WAM LIC that invests beyond our shores.
What’s to like about WAM Global?
Wilson Asset Management is an investment company that has an enviable track record of picking winners. Taking its successful strategies and investing in “small to mid-cap international companies” is WAM Global’s stated objective, whilst also aiming to pay a fully-franked and rising dividend down the road (although currently, WGB pays no dividend).
Currently, the portfolio comprises of companies like American Express Co, Diageo, Logitech and Waste Management, which are all quality names that I would be happy with exposure to. Geographically, the current portfolio is weighted 55% towards US stocks, with European and Japanese stocks making up most of the other non-cash positions. The WGB portfolio increased 4% in June and now has gross assets of $486.4 million. One of the stated contributors to performance was HCA Healthcare – a US operator of private hospitals.
WGB also increased its cash position marginally in June, with cash and fixed interests as a portfolio percentage rising from 13.7% in May to 14.7%.
Is WAM Global a buy today?
WAM Global had a rocky start to life, floating in June last year for an IPO price of $2.20. Although the shares have yet to reach above this price, it is good to see that WGB’s NTA is going in the right direction.
At the time of writing, a WAM Global share will set you back $2.06, which represents a 12% discount to its NTA.
Personally, I am very happy to see such a wide discount between WGB shares and the NTA of the LIC. I believe the market is under-pricing WGB due to its lack of yield (whilst over-pricing many of the other WAM LICs for the converse reason). I also think that this will reverse once WGB starts to pay out a dividend, so now could be a great time to pick up shares at a discount.
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Motley Fool contributor Sebastian Bowen 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. 2019