AMCIL’s manages a concentrated investment portfolio comprising 30 to 40 stocks covering large and small companies in the Australian equity market. As a result small companies by market size can have an equally important impact on portfolio returns as larger companies in the Australian market. The number of holdings in the portfolio will depend on market conditions and investment opportunities. The selection of stocks in the portfolio is based on attractive valuations as well as the outlook for growth and the competitive structure of the industry.
Given the concentrated investment focus of AMCIL holdings will be sold from time to time to fund additional investments to the portfolio.
The Company's corporate objective is to provide shareholders with attractive returns through strong capital growth in the portfolio over the medium to long term together with the generation of dividend income.
Depending on the profit from year to year the dividends paid by the Company will maximise the distribution of franking credits. It would not be our normal practice to distribute realised capital gains unless franking credits have been generated. As a result, AMCIL’s dividends may vary over time.
Approach to Investing
The investment philosophy is built on taking a medium to longer term view of value, which means we aim to buy and hold individual stocks over the long term based on selection criteria which, in summary, include:
- Formulation and execution of business strategy of the company and its underlying business value;
- Key financial indicators, including prospective price earnings relative to projected growth, sustainability of earnings and dividend yield (including franking) and balance sheet position including gearing, interest cover and cash flow; and
- Corporate governance practices, including sound and well-constructed boards.
- AMCIL also has access to lines of credit, which allows the Company on a limited basis to gear its balance sheet when appropriate investment returns are available to enhance shareholder returns. In addition, the Company also uses options written against its trading portfolio to generate additional income.