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DJW - DJERRIWARRH INVESTMENTS LIMITED


brickwalls
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http://www.asxboard.com/html/emoticons/icon13.gif Worth a look for consistent returns 6-8%% FF div.

Dec 03 NTA $2.98 vs sp $3.40 [$3.48current]

NTA has fallen a little on previous years most likely due to 29% of holdings is in the banking & finance sector. But that will recover as usual and they have minimal exposure to property.

Pretty much tracked the all ords for last 2 years [as expected due to their portfolio - note annual post tax EOY dip] but has fallen a way a little in last 6 months may rise soon before 1/2 year div.

 

Get last Annual report @ <http://www.asx.com.au/asxpdf/20030822/pdf/3hs17wt8fs24d.pdf>

pp53-55 has full list of holdings, notes and securities.

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  • 1 month later...

Outlook - from Qrt Rpt

"Most market commentators are generally expecting improved economic performance in the second half of the 2003/2004 financial year. As a result, the market generally has an optimistic view of earnings growth and anticipates rising share prices. There are, however, a number of issues which may detract from the optimistic scenario, in particular, the possibility of rising interest rates, both here and abroad, in a bid to correct economic imbalances. There is also particular concern in Australia about the prospect of a continuing strengthening A$ relative to the US$. While positive for importers and overseas travellers, there are many other areas of the economy viewing this strong rise as an unwelcome development.

Other issues which may affect the current benign outlook would be any significant deterioration in the global security situation, terrorist disturbances or some other unexpected shock. While such events may have a temporary impact on equity prices, they may have another side effect of increasing the level of volatility, which affects option prices.

Given the current medium to long-term optimism regarding the major resource companies noted above, we have been continuing to add to our holdings of these stocks in our portfolio. The recent weakness in bank stocks has also given us the opportunity to add to our holdings in these companies as we have been somewhat underweight in this area of market."

Currently @$3.67

Top 20 Investments - Ordinary securities $ million

66.4 NAB National Australia Bank

46.4 CBA Commonwealth Bank of Australia

39.7 BHP BHP Billiton

38.4 TLS Telstra Corporation

37.6 NCP The News Corporation (a)

30.3 ANZ Australia and New Zealand Banking Group

19.6 WBC Westpac Banking Corporation

15.7 WAN West Australian Newspapers Holdings

14.3 WPL Woodside Petroleum

14 RIO Rio Tinto

13.4 TOL Toll Holdings

12.7 TCL Transurban Group

11.9 WOW Woolworths

11.5 AMP AMP

11.4 AGL The Australian Gas Light Company

10.8 CML Coles Myer

10.4 FGL Foster's Group

10 AMC Amcor

9.2 BIL Brambles Industries

8.9 AWC Alumina

Total 432.6

As % of Total Portfolio Value ($594.4m) 72.8%

(excludes Cash & Bank Bills)

 

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 Djerriwarrh seeks to provide an enhanced level of fully franked income in part by using option strategies. This will typically reshape the profile of returns producing more immediate income at the expense of potential capital growth. In falling markets income from options may offset some of the loss from declining share prices.

 

 The emergence of synchronised global growth moved global indices higher. The Australian market has followed with material and energy stocks performing strongly.

 

 In this environment, Djerriwarrh bought back selected in-the-money call option positions to capture more of the potential upside of these holdings rather than let the options be exercised in the rising market.

 

 Call option coverage is at the high end of the normal

10c ff dividend

 

Given the high level of the market, portfolio activity was focused on buying stocks across a wide range of existing holdings when value was on offer, including writing call options against these purchases. This occurred across several holdings with CSL, Woolworths, BHP, National Australia Bank and Macquarie Group the largest of these.

 

A limited number of new positions were added, although they are small in the context of the portfolio. These were Brickworks, Ansell and Dulux Group.

 

Major sales were predominantly because of a deterioration in the outlook for some companies.This included Telstra and TPG Telecom. Whilst Djerriwarrh continues to hold positions in these companies, the structural adjustments occurring in the telecommunications industry through the implementation of the NBN has made these holdings less compelling.

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  • 1 year later...

DJW dropped its dividend, from 10c to 8.75c. They did pay a 'special' last year before the election.

 

The stock might lose some of its "above NTA" gloss that comes from its enhanced yield, which is generated by options trading.

 

And the Half Yearly Report did carry this, which is code for 'expect no miracles': The use of options will typically reshape the profile of returns producing more immediate income at the expense of future capital growth.

 

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