Portfolio Stock Announcements

November 30, 2018

 

 

Alliance Aviation (ASX:AQZ)

 

Alliance Aviation is a charter flight operator, specialising in fly-in fly-out services, and other ad-hoc charter and regular transport flights across Australia, and is one of our favourite stocks and core holdings. Increased momentum in the resources sector is playing out in the form of contract extensions, often replacing lower-priced deals. BHP have announced this week that they have extended their contact with Alliance for a further 5 years on their Nickel West air charter service. Alliance has three more contracts up for renewal, all with the possibility of improved terms with little risk of a negative outcome. 

 

 

The stock has done well for us with a more than two-fold increase in price since our initial purchase and it is the relative certainty that fuels Glennon's conviction in the stock.

 

 

Afterpay Touch (ASX:APT)

 

The market has nervously awaited the results of ASIC’s inquiry into buy-now-pay-later lenders, creating some turbulence in APT’s share price over the past few weeks. Fears subsided after ASIC released their report earlier this week concluding that APT and similar lenders need not conduct responsible lending checks and therefore not have to be brought under the credit law net. Although the tone of the report suggested that ASIC has some concerns, it is satisfied that some intervention powers in case the situation does become threatening to consumers is enough to satisfy it. We have done our due diligence on APT and, having spoken to several consumer advocacy groups, believe that fears around the product are overdone.

 

Thinking bigger picture, the numbers released on APT’s US expansion have been very positive so far, and we see the potential benefits of the international growth strategy far outweighing the concerns at home.

 

 

Stanmore Coal (ASX:SMR)

 

Indonesian investor Golden Energy and Resources announced a takeover bid for SMR earlier last week for 95c per share. Having been in the stock for only a short period (we bought in at 92c), we see this bid as opportunistic and not reflective of the underlying value of SMR’s business and mining operations – we didn’t enter the stock with the aim of earning a few cents over our purchase price and we’ll definitely not be accepting the bid.

 

However, the bid does reaffirm our conviction in the business, its production scale, earnings capacity, and asset longevity: we’re not the only ones that see value in the stock.

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Email: info@glennon.com.au

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