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WGB update: Is WAM Global a buy?

Sebastian Bowen

The WAM Global Ltd (ASX :WGB) share price has fallen back to around $2 per share despite its net tangible assets (NTA) increasing by nearly 5% in the month of July – according to Wilson Asset Management (WAM)’s monthly report.

A closer look at WAM Global’s performance

WAM reported that WAM Global’s NTA per share has risen another 4.76% to $2.42, as of 31 July. Over the last six months, WAM Global’s investment portfolio has risen 20.4% on top of WAM announcing an inaugural dividend of 2 cents per share (fully franked).

WGB’s gross assets now sit at $506.6 million, with $454.4 million in equity and a 10.3% cash position. WGB shares are trading at a hefty discount to NTA with a total market capitalisation of $423 million at $2 per share, which represents a 21% discount to its NTA (although it is worth noting that global markets have been hit significantly since 31 July).

WAM Global’s portfolio is currently weighted at 60.7% to US stocks, 7.4% to French stocks and 5.7% to the UK, with other countries at 15.9%. Some of its current top holdings include American Express, HCA Healthcare, Nomad Foods, Diageo, United Technologies and Kobe Bussan. The 10.8% cash position is a decrease from the 14.7% cash it held at the end of June.

Is WAM Global a buy today?

Although the 20% performance over the past six months is very encouraging, many investors are likely worried that the WAM Global NTA has not followed suit. An investor who isn’t worried, however, is WAM founder Geoff Wilson, who has bought additional WGB shares no less than eight times in August so far. When insiders are showing such confidence in their own investment companies, it should (in my opinion) be taken as a very positive sign.

Foolish takeaway

Now that WAM Global has announced its inaugural fully franked dividend, I expect that over the course of the next twelve months, the WGB NTA will drift back towards its intrinsic value. During this time, I hope to pick up additional WGB shares at a discount for as long as possible.

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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