Investor Insights

CoreLogic has just reported that national dwelling prices rose by 2. 3 per cent in May. That’s an annualised rate of more than 28 per cent. And with lenders continuing to provide cheap and easy access to credit, and investors showing lots of interest, I don’t see the property market cooling off any time soon.

Capricorn Metals is a junior gold company that is entering an exciting time in its development phase. With the company very close to first gold pour and commissioning underway at its 100 per cent owned Karlawinda project in WA, we believe there is significant re-rating potential if the company successfully executes on targeted project metrics over the next 6-12 months.

In March Montgomery Investment Management introduced the Polen Capital Global Growth Fund to Australian investors. The Boca Raton-based manager Polen Capital was established in 1979 and over the past 32 years the flagship US Portfolio has been able to compound earnings growth above 15 per cent annually versus approximately six per cent annually for the S&P 500.

Over the past year or so, we’ve seen spikes in the valuations of fast growth, momentum stocks. But if inflation rears its head, that could change in a heartbeat. Which is why the next big rotation could see these over-valued – often profitless – firms dumped in favour of long-duration quality tech businesses.

It’s hard not to be intrigued by – and envious of – the stories of rapid and stupendous gains made by some people on unconventional investments, like NFTs and cryptocurrency.   The good news, particularly for those who missed out on this profit bonanza, is there are still some unconventional investments out there with very attractive prospects.

The Polen Capital Global Growth Fund attempts to own 25-35 of the highest quality businesses which meet all of the manager’s five guardrails – a sustainable return on equity exceeding 20 per cent; exceptionally strong balance sheet; stable or growing profit margins; abundant free cashflow; and real organic revenue growth.

Travel businesses have really suffered due to the COVID-19 travel restrictions and border closures, but with many economies re-opening, unleashing a likely tsunami of pent-up travel demand, the future is looking brighter. And companies like Webjet (ASX:WEB), the Australasian online travel agent and global hotel room intermediary, should be major beneficiaries. Webjet has just released its FY21 results.

The Australian gold sector occasionally throws out an interesting opportunity, and the severe share price decline of Regis Resources (ASX: RRL) over the past nine months, coinciding with the recent $650 million capital raising (241 million new shares at $2.

Right now, inflation is the new bogey man. And it’s having an impact on equity markets. But is rising inflation just a blip caused by short-term bottlenecks in the supply of labour, or a long-term structural issue? 

Global fund manager, Pendal Group (ASX:PDL), has just announced the strategic acquisition of US-based Thompson, Siegel & Walmsley (TSW). The acquisition delivers material scale to the existing US operations and is expected to be double-digit earnings accretive in the first 12 months.

Our recent launch of the Polen Capital Global Growth Fund marks the formal commencement of our partnership with Polen Capital. After due diligence of several established global managers with long term track records we are delighted to have found in Polen, a team with integrity, a desire to offer their expertise to Australians, and a deep attachment to a quality-based investment philosophy.

As world economies start to bounce back after their COVID-19 lockdowns, inflation is back on the agenda. Federal Reserve Chairman, Jerome Powell, thinks the current spike is transitory. Time will tell if he’s right. But whether it’s transitory or persistent, inflation will impact stock market returns.