Why we don’t buy stocks purely on yield
Glennon Capital
ASX:GC1, ASX:CMI
Cash rates are at all time lows and predicted to move lower, while the yield on Australian 10 year government bonds hit an all time low of 2.2% this month. Australian savers, both within the superannuation system and outside it, are now faced with the tough task of building their savings nest eggs under much more difficult conditions. The result has been a search for income in stocks. Yield has been king. But in searching for fully franked yield in equities, investors can ignore important risks. Yield needs to be “real” and sustainable. Real yield comes from free cash flow. Free cash flow is the cash a business generates after accounting for capital expenditures required for the business to continue operating. Once a business generates free cash flow the board can choose to pay down debt, reinvest the money to fund future growth projects or acquisitions, buy back shares, or pay the cash to shareholders as a dividend. (VIEW LINK)
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Glennon Capital was founded in 2008 by Michael Glennon. Previously, Michael worked with some of the best institutional small company fund managers in Australia. In 2007, he received the IMCA Money Management Fund Manager of the Year (Small Cap) Award. Michael founded Glennon Capital to offer specialist small company investment management to high net worth individuals and family offices, as well as through selective platforms for clients with less than $1 million to invest in our portfolios.
Today, our flagship fund Glennon Small Companies Limited (GC1) opens up the investment opportunity for all. GC1’s Initial Public Offering was completed in August 2015 and is now a listed investment company that is traded on the Australian Stock Exchange (ASX).
We are proud to be recognised for co-investing with clients in all portfolios – an important feature which ensures that our values and principles are aligned with those of our clients.
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Glennon Capital
Fund Manager
ASX:GC1, ASX:CMI
Glennon Capital was founded in 2008 by Michael Glennon. Previously, Michael worked with some of the best institutional small company fund managers in Australia. In 2007, he received the IMCA Money Management Fund Manager of the Year (Small Cap)...
Expertise
No areas of expertise
Glennon Capital
Fund Manager
ASX:GC1, ASX:CMI
Glennon Capital was founded in 2008 by Michael Glennon. Previously, Michael worked with some of the best institutional small company fund managers in Australia. In 2007, he received the IMCA Money Management Fund Manager of the Year (Small Cap)...
Expertise
No areas of expertise
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