Conviction. Long Term. Aligned.
NAOS Asset Management is a specialist fund manager providing genuine, concentrated exposure to Australian listed industrial companies outside of the ASX 50. With a proven performance track record, NAOS maintains a focus on protecting capital and aims to deliver shareholders a sustainable growing stream of dividends franked to the maximum extent possible, whilst providing capital growth over the longer term. Visit naos.com.au for more information.
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Frustratingly for investors in micro-caps, the larger companies which now include the WAAAX market darlings are running quickly ahead of their smaller cousins. It’s a waiting game for the tide to turn.
A fund manager on the wrong side of the market must tough it out and have the strength of their convictions, satisfied that their investment process will bear fruit over the long term. The LIC structure gives more time.
Check the cash flow characteristics and sustainability in any company before investing, as various ratios can be an early sign that the business is churning through rather than generating cash.
Company valuations will react differently to market conditions, and a stock priced for rapid growth in earnings may be most vulnerable during a market shock or downturn. Lessons are drawn from Howard Marks.
Companies always boast the synergies and growth prospects of acquisitions, but dig a little deeper with these questions and you might see why most of these deals fail to add value when finally bedded down.
Watching the commitment to buying shares by senior executives and board members can be a powerful pointer to company prospects, but investors need to read the right signs.