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In reply to: Mags on Wednesday 15/08/07 10:45pm

Mags - you have followed my own pattern exactly, but this time I will probably not take the SPP especially as the discount is only 2%, with all the complications of several different bases for CGT when I sell.

I have now a reasonable holding in ARG and as they only invest in "Blue Chips" I look upon my holding as the more stable section of my portfolio.

I can now use any available money for more speculative and emerging companies.


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True. But its getting a flogging, far more than I would have expected. Argo have always invested in solid stable cash generating businesses. Yes I expected a drop, but this has got to be oversold at these levels, providing the USA doesn't dissappear.
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  • 8 years later...

Argo will pay a final dividend of 15.5c per share, bringing the year's total distribution to 30.5c a share, which is 1c per share higher than last year's payout and a new record high for the group. The previous high water market was set just before the GFC in 2007-08. It's the fourth successive increase in the annual dividend. Argo has paid dividends every year since it was established 70 years ago in 1946.


Argo's investment portfolio returned negative 1.2 per cent over the year "characterised by macroeconomic and political uncertainty" as volatility was heightened due to masses of liquidity pumped into markets by central banks.


But while many other Australian LICs took the opportunity to move their portfolios into stocks in the mid-cap and small-cap parts of the market as the big end of town underperformed, Argo managing director Jason Beddow said the large-cap strategy would continue to pay off in the long run.


"Although the skew of Argo's long-term portfolio to some of the larger sectors may have negatively impacted our relative performance this year, these broad portfolio settings will continue to deliver solid growth and dividend income for the company and its shareholders in the longer term," Mr Beddow said.


He said companies with above-market dividend growth would be well supported in the market, despite valuations already being excessively inflated. "With abundant and increasing global liquidity, we believe that despite the potential for rate increases in the US, the yield thematic will continue to be a dominant consideration for the remainder of the year."


Mr Beddow said Argo took advantage of volatility in the market to build stakes in existing stocks and to add new companies to the group's range of investments. These included stakes in CBL Corporation, Estia Health, Genworth Mortgage Insurance, McGrath, M2 Group, Reliance Worldwide and Rural Funds Group.


Some of the group's biggest sell-downs included Medibank Private, CIMIC Group, UGl and Clydesdale Bank, all of which were completely removed from the Argo portfolio.

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  • 1 year later...
The Australian equity market has continued to rise, and compelling value buying opportunities have been hard


to come by. We selectively increased our positions in a number of smaller companies, including Monash IVF


Group, iSelect, Tassal Group, Speedcast, Managed Accounts and Steadfast Group, and a new holding was


initiated in Novonix, a supplier of materials and services to the lithium battery industry. The number of stocks


held in the portfolio reduced slightly to 96 and the cash balance at 31 December was $235 million, representing


4.2% of the Company's total assets....


[Any] short-term underperformance was primarily due to the strong run of resources stocks, including


many of the smaller companies in that sector. Argo generally holds lower than market weightings in these


companies, as they often pay relatively low or no dividends and can be somewhat speculative.



Global share markets have continued to march upwards, led by the US repeatedly hitting all-time highs. Positive economic indicators have firmed throughout the second half of 2017, with additional fuel provided by the Trump administration's tax cuts.


The Australian economy looks in reasonable shape, with historically reliable indicators such as the NAB business sentiment survey, government infrastructure spending and employment all producing strong readings.


Despite the positive economic outlook, we continue to be cautious of relatively high valuations in some sections of the Australian share market, as we noted at last year's Annual General Meeting in October. Since then we have seen the ASX200 Index return +7% in the December quarter and the A$ jump by 8% since mid-December, and we feel that valuations are looking further stretched with some frothy areas of the market emerging.


The larger cap end of the Australian market outside of resources looks to be where there may be some better value, following another year of strong share price performance from smaller companies.


Argo is a long-term investor and we maintain our valuation discipline by not chasing stocks which we believe to be overvalued. However, the upcoming corporate results reporting season may throw up some opportunities for further purchases of quality companies that do not meet the short-term earnings expectations of the market.


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  • 1 month later...

tricky one


Issue price won't be $7.98 if today's price action keeps on for next 4 days; likely to be calculated on

VWAP over 5 trading days up to and including closing date, rounded down to nearest cent
but this likely lower issue price is closer to Argo's NTA ($7.83 at end of Feb) and hence doesn't look as expensive


Do you want as part of your investment portfolio:

- fully franked dividends?

- low management fees?

- something close to the index, yet actively managed?

Argo uses extensive research and direct company visits to identify well managed, listed Australian businesses


that operate in sound industries, have good cash flow and the potential to grow dividends.


The Company seeks to buy or add to its long-term holdings in those businesses at times when share prices compare favourably to long-term valuations.

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