Update No. 54 – 06/04/12

I am off to Perth first thing tomorrow morning, so I won’t write in much detail this week.  I have an ever-increasing watch-list of interesting stocks, but await a catalyst to realise something closer to a fair value for some of our existing holdings in order to deploy the cash into new opportunities.

Regular readers will note the continued success of MXI, which I noted as our first ever sale about 2 months ago.  I (fortunately in retrospect) sold only about 1/8 of our holding, managing at the time to pick the 12-month high.  Those who have watched it since have pointed out it has subsequently run another 20% (plus we recently received an INTERIM dividend which was 10.73% of our purchase price grossed up), I noted it made up about 10% of our assets.  The recent run-up in price means it is now about 13.5% of our portfolio again, and in my view is the only stock we own that is within cooee (explanatory link for the understanding of 'cooee' for our international readers) of my intrinsic value (IV) estimate.  Since I made my assessment of IV just over 12 months ago, my assessment of IV has increased about 25%.  Including dividends the share price has increased 175%, so clearly MXI are much closer to my assessment of IV.  My recent assessment of MXI’s IV places it at 74c, so there is still some upside potential, but it is easily the most fully valued stock in our portfolio and would be first in the firing line if I decided I wanted to deploy our funds into an opportunity with a wider gap between price and value.  Enjoy your Easter break (if you get one) and we’ll talk next week – Tony Hansen 06/04/12.

EGP Fund No. 1 Pty Ltd. Up by 8.04%, leading the benchmark by 0.02% since January 1^st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 3.99%, leading the benchmark by 10.38% all-time (April 1^st 2011).