ASX INVESTMENT TALKS

Transcription

1 ASX INVESTMENT TALKS Stocks to watch SPEAKER: Ben Clark, TMS Capital LOCATION: Sydney DATE: July 2013 DISCLAIMER: The views, opinions or recommendations of the presenters are solely their own and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN and its related bodies corporate ( ASX ). Information and material presented at the seminar is for educational purposes only and does not constitute financial product advice. Investors should obtain independent advice from an Australian financial services licensee before making investment decisions. No responsibility is accepted by ASX for any loss or damage arising in any way (including due to negligence) from anyone acting or refraining from acting as a result of this information or material. Copyright 2013 ASX Operations Pty Limited ABN All rights reserved 2013.

2 Stocks to Watch Ben Clark Portfolio Manager TMS Capital July 2013 TMS Capital Pty Ltd (AFSL )

3 Disclaimer If any information, recommendation or advice is supplied with this publication TMS Capital and its employees to the full extent permitted by law disclaim any liability for that information, recommendation or advice and to the extent liability is imposed by law and is not avoided by the disclaimer, the liability of TMS Capital and all of its employees does not extend to any consequential or economic loss. As each person s circumstances will be different, if any recommendation is contained in this publication, no action should be taken without advice from TMS Capital.

4 Contents August reporting season what to look for 2013 Stocks to watch RMD ResMed Inc. IIN iinet Ltd MBLHB Macquarie Income Sec.

5 Who we are Ben Clark Financial markets since 2001 Bachelor of Commerce (Sydney) Appears on CNBC and Sky Business TMS Capital Established in 2004 Independent ; owned by staff Full service Structural advice Direct investments SMSFs FUM $300m A strong and growing business

6 Reporting Season

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8 ResMed Global leading developer, manufacturer and distributor of medical devices to treat sleepdisordered breathing and other respiratory conditions.

9 ResMed Track Record has been outstanding: 73 consecutive quarters of revenue growth Since 2007 EPS has grown 144% Gross margin last quarter was 62.4% Company has net cash of $670m On market buyback continues

10 Source ResMed Q Investor Presentation ResMed

11 ResMed How have they achieved this? Sleep-disordered breathing (SDB) recently estimated to occur in 25% of adult population. Market Leader Innovative product renewal Diversified by region

12 ResMed Why we are recommending RMD? Market will continue to grow New ways to diagnose patients Move to Singapore Weaker AUD Capital Management

13 ResMed Threats to the business Competitive bidding process in the US Increased competition

14 Resmed Key numbers Price $4.90 Year high/low: $5.26/$3.02 ROE 19% FY14 PE 17.9x FY13 Dividend yield 1.7% Target price: $6.00

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16 iinet Ltd Who they are? Number 2 provider of DSL broadband in Australia Recent acquisitions of Internode & TransAct

17 iinet Ltd Track Record has been strong: Since 2007 EPS has grown 157% EBITDA margin ~ 20.3% Subscriber numbers have grown from 196K in 2008 to 826K today = considerable operating leverage

18 Source iinet Macquarie conference May 2013 iinet

19 iinet Ltd How have they achieved this? Growth in market share - service & brand Recent acquisitions have been game changers Innovation Scale

20 iinet s record Why we are recommending IIN? Continued acquisition led cost savings Subscriber growth New products Potential lift in payout ratio Corporate potential?

21 iinet Threats to the business Fixed voice line rental is a concern and must be closely watched National Broadband Network

22 iinet Key numbers Price $ Year high/low: $6.74/$3.25 ROE 19% FY14 PE 14.6x FY14 Dividend yield 3.7% ff 50% payout Net debt of $158m; Net Debt / EBITDA 1.7x Target price: $6.50 (price volatility)

23 Interest rate securities Basel III changes APRA reassessment Tier 1 capital has led to reconstructed IRS Focus turns to perpetual securities Transitional arrangements Strong yields Potential for capital outcomes

24 MBLHB Issued November 1999 $400m of Tier 1 capital securities Rate: 90d BBSW + 170bps Quarterly income Face value $100 Current price $72.50 Running yield 6.11% Target price $80

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26 KEEP LEARNING Take a short online course Subscribe to the Investor Update e-newsletter Play the ASX Sharemarket Game Watch another ASX Investment talks presentation VISIT