Selling Cooper Energy (COE) and Reducing CSL Limited (CSL)
Recent changes to the Blackmore Capital Blended Australian Equity Portfolio
With equity market valuations trading at significant premiums to long-term averages at a time when earnings fundamentals are weakening, we have raised cash levels to approximately 15%.
Sold Cooper Energy (COE)
We have sold the small holding in Cooper Energy. Having exited Woodside in the second half of 2019, this leaves BHP as the portfolio’s remaining energy producer, albeit diversified. Last year’s reduction in E&P exposure was driven by deteriorating LNG export market conditions amid increasing supply and also the difficulties faced by Woodside in its suite of proposed LNG developments. While Cooper Energy is a domestic market gas supplier, with the local and global growth environment deteriorating we have reduced portfolio exposure to energy markets, exploration and development risk.
Reduced CSL Limited (CSL)
We have reduced our position in CSL Limited. CSL has delivered a total return of c.72 per cent(YoY), exceeding the market return by more 55 percentage points. While we expect CSL to continue to lead its industry peers based on superior economics of scale and it's history of execution, the potential for further outperformance is now largely factored into CSL's PER valuation of >40 times.