Wilson Asset Management weekly: Afterpay and Boral

Chris Stott

The S&P/ASX All Ordinaries Accumulation Index closed up 0.4% for the week. On Tuesday, National Australia Bank’s (ASX: NAB) monthly survey found business conditions reached their highest level since 2008, with business sentiment improving across most industries in August. The Westpac Melbourne Institute Index of Consumer Sentiment, released on Wednesday, rose 2.5% to 97.9% in August, a bounce back from the nine-year low recorded for the previous month. On Thursday, the Australian Bureau of Statistics (ABS) estimated more than 40,100 full-time positions were added to the economy in August, three times higher than market expectations.

In this week’s report we discuss if you should consider the board when selecting stock, the potential upside for businesses exposed to Australia's west coast, and updates on Afterpay and Boral.

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Should you consider the board when selecting stocks?

The ultimate success or failure of a company rests with its board. However, despite the growing expectation that directors create and protect shareholder wealth, many investors overlook these important board functions when making investment decisions. In the September edition of the ASX Newsletter, Chief Executive Officer Kate Thorley explores the importance of assessing a board when selecting companies for investment.

Look west for the rebound

Following the rebound of the mining and mining services sectors amid last month’s underwhelming reporting season, I discuss the potential upside for businesses exposed to Australia's west coast for the first time in many years in my monthly Smart Investor article in the Australian Financial Review.

Afterpay touches down with Jetstar

On Wednesday, Afterpay Touch Group (ASX: APT) announced it had entered into an agreement with Qantas’ (ASX: QAN) low cost airline Jetstar to offer Afterpay's 'buy now pay later' finance product to its customers. The partnership marks the first venture of its kind in the travel industry and we believe Afterpay will continue to gain market share. Shares in Afterpay closed up 15.0% and shares in Qantas closed up 3.0% for the week. We own Afterpay as a research-driven investment in WAM Capital and WAM Research and Qantas as a market-driven investment in WAM Leaders and Century Australia.

Boral builds US business

Also on Wednesday, Boral (ASX: BLD) held a North American investor site tour and presentation in Dallas, Texas which was attended by Senior Equity Analyst John Ayoub, who is currently visiting a number of companies in the United States. The company showcased its strong US management team that are focused on achieving long term growth and synergy targets. Furthermore, other industry focused meetings have provided us with greater confidence around a stable and robust growth outlook for the US housing and infrastructure markets. Shares in Boral closed up 2.3% for the week. We own Boral as a market-driven investment in WAM Capital and WAM Active and as a research-driven investment in WAM Leaders and Century Australia.

Chris Stott

Chris is the Chief Investment Officer of Wilson Asset Management, having joined the company in 2006. He is also the Portfolio Manager responsible for WAM Capital (ASX:WAM), WAM Research (ASX:WAX), WAM Active (ASX:WAA) and WAM MicroCap (ASX:WMI).




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