We exited a position last week. As is customary, I will deal with this through the weekly blog post.
We sold all our Maxitrans (MXI) stock for 58.5cps. MXI was a foundation holding for the fund and we have done exceptionally well out of it, type MXI into the search bar at the top right of the blog page & you’ll find a number of previous blogpost references to the stock.
Most recently, between December 2014 and April 2015, we modestly added shares at an average price below 48.5cps. These purchases worked out well, with an IRR of about 40% over a short holding period. Nothing like as good as our first purchase, but still respectable.
However, as I have mentioned in the last couple of investor letters, I am trying to maintain a concentration on our very best ideas and, MXI was not good enough to make that grade under present conditions.
If you read the AGM announcements made by MXI this week, this will give you an idea of how strongly I think about the ideas I am recycling the MXI capital into because, based on the guidance for FY16, MXI is on a FY16 P/E of about 10x and EV/E of about 13x, and appears to be on a cyclical upswing. Weakening currency will increase MXI’s competitiveness with imported products and the chairman’s views on the long-term tailwinds for the transport sector are positive (and this is from a management that tends to be quite forthright when things look bad).
MXI is an interesting stock, because it operates in an exceptionally difficult industry and the returns management have managed to generate for shareholders are testament to their quality. A lesser management could easily have done much worse in such a challenging industry over the nearly 5 years EGP has been an MXI shareholder.
If you are a reader of the blog and an owner of MXI, there is no need to panic, I have a dreadful track record for timing of sales, read the blog I wrote when I disposed of our AMA holding if you need confirmation of that!
By the way, to Melbourne based investors or blog readers, I will be in Melbourne this week, so if you want to catch up, drop me an e-mail, I’ve got a pretty tightly packed schedule, but evenings are fine.
This blog has developed a more ‘commercial’ flavour of late. After posting my Uber sign-up code (M3E9L for those still interested), I got a few free rides, so I thought I might try the same again this week. I will be using AirBNB for my accommodations in Melbourne this week and they have a similar offer, whereby if you use my link to sign up (www.airbnb.com.au/c/tonyh147) you get $28 worth of travel credit (I believe this is US$20 at current AU$ conversions) and once you’ve used it, I will get the same. I think the sharing economy is an exceptional idea that enables resources to be employed more efficiently, I intend to use it when I’m travelling through Europe in January – Tony Hansen 06/11/2015
|
|
Apr 1st 2011 |
Jul 1st 2015 |
Current Price |
Since July 1st 2015 |
Since Inception |
|
EGP Fund No. 1 |
1.00000 |
1.57872 |
1.66709*1 |
5.60% |
96.07%*2 |
|
37333.23 |
50922.68 |
50389.96 |
(1.05%) |
34.97% |
EGP Fund No. 1 Pty Ltd. Up by 5.60%, leading the benchmark by 6.65% since July 1st 2015. Since inception, EGP Fund No. 1 Pty Ltd is Up by 96.07%, leading the benchmark by 61.10% all-time (April 1st 2011).
*1 after a 31 May 2013 dividend of 2.333 cents per share (cps) plus 1.000 cps Franking Credit, a 31 May 2014 Dividend of 7.000 cps plus 3.000 cps Franking Credit and a 31 May 2015 Dividend of 8.6667 cps plus 3.7143 cps Franking Credit
*2 calculated based on dividends reinvested
