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  • Writer's pictureMarcus Bogdan

Portfolio Changes #1 - November 2018

Recent changes to the Blended Australian Equities Portfolio & Australian Equities Income Portfolio

We have continued to take advantage of heightened share price volatility to increase our investment weights in Brambles, Cleanaway Waste Management, Event Hospitality and Entertainment and Woolworths. Please refer to last week’s link for rationale.

Recent changes to the Blended Australian Equities Portfolio

Increased CSL Limited (CSL)

We have added to CSL following an almost 20% fall in its share price. CSL’s operating performance continues to deliver outstanding earnings growth, epitomized by its FY18 result in which net operating cash flow grew by over 50%. Much of CSL’s success has been underpinned by an extensive R&D program which has consistently developed a range of innovative products for the health care sector. Earnings per share growth is expected to grow by greater than 10% over the forecast period, underpinned by its core plasma and speciality products. CSL’s balance sheet remains in pristine shape with Net debt/EBITDA at c.1.3 times. Increased Woodside Petroleum Limited (WPL)

We added to the Woodside position after it followed the oil price lower, declining 13% from early October to early November while the Brent oil benchmark declined by around 15%. Meanwhile the Woodside quarterly report in mid-October showed Wheatstone LNG production ramping up ahead of schedule and continued progress towards final investment decision for the Scarborough project and a tolling agreement between its Browse project and the North-West Shelf partners. The Federal Government's review of the PRRT tax parameters is expected to be implemented by mid- 2019, so will be factored in to the project's economics. Woodside’s balance sheet is well funded at c.0.5 times Net debt/EBTIDA and provides support for an attractive dividend yield of c.5.0% fully franked.


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