GLENNON
CAPITAL
QUARTERLY WEBINAR
GLENNON.COM.AU
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GLENNON .COM .AU
The information provided in this presentation has been prepared by Glennon Capital
(ABN 84 137 219 866, AFSL 338567). The information herein is provided for information
purposes and should not be construed as an offer for sale.
Whilst Glennon Capital has taken all reasonable care in producing this information,
subsequent changes in circumstances may occur at any time and may impact on the
accuracy of the information. Glennon Capital Pty Ltd believes that any information herein
is accurate and reliable, but no warranties of accuracy, reliability or completeness are
given (except insofar as liability under any statute cannot be excluded). No responsibility
for any errors or omissions or any negligence is accepted by Glennon Capital Pty Ltd, its
related bodies corporate or any of their respective directors, employees or agents.
This presentation has been prepared without taking into account the investment
objectives, financial situation or needs of any particular investor. This presentation should
not be relied on as the sole basis for investment in a portfolio managed by Glennon
Capital.
DISCLAIMERF
or p
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WEBINAR
AGENDA
1 Market Update
2 6 Current Market
Themes
3 Business Update
4 Portfolio Update
5 OutlookFor
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MARKET UPDATE
WHAT IS HAPPENING IN
SMALL CAPS?
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110
June Quarter Small V Top100
Small Ords ASX 100
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90
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115
120
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12 Month Price Chart
ASX 100 v Small Ords
Small Ords ASX 100
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95
100
105
110
115
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Quarter Small Industrials V Small Resources
Small Industrials Small Resources
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12 Month Price Chart
Small Industrials V Small Resources
Small Industrials Small Resources
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MARKET UPDATE
5 CURRENT MARKET
THEMES
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1THE ROYAL COMMISSION
HAS MADE LOANS
HARDER TO GET
• The Chinese are no longer fuelling property in Australia.
• Harder for anyone to get a loan following on from the royal commission.
• The “Wealth Effect” of rising house prices has ended
• “Sub-Prime” lenders will do well in the short term. The risk is that the listed
lenders in this category ease the lending requirements to grow short term profits.
Essentially lending money to people who shouldn’t be able to borrow money.
• Westpac has announced they will stop lending to self-managed super funds.
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Debt as a percentage of household income
has increased.
Will be a problem if interest rates increase
We are at historical low levels.
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GROWING
INDEBTEDNESS CAN’T
CONTINUE
There has been consistent long term wage
growth however house prices have
significantly outstripped wage growth.
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Australian house prices are significantly over
inflated relative to international markets.
All signs are pointing to a pull back in house
prices or at least a long period of flat growth as
the market catches up with itself.
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OUT OF KILTER WITH THE
GLOBAL MARKET
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There is no confusion as to where we sit in
the investment cycle.
Avoid broad based market correlated
investments.
Long only ETFs, Index funds.
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ITS VERY CLEAR WHERE
WE ARE……
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Commonwealth Bank
BHP Limited
Westpac
CSL
ANZ
14
THE AUSTRALIAN
MARKET IS TOP HEAVY
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APPLE
AMAZON
ALPHABET
MICROSOFT
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THE US IS THE SAME
HOWEVER THEIR TOP
COMPANIES ARE GROWTH
COMPANIES
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Our Investments in mining
services provide us with exposure
to the recourse sector.
There was significant
underinvestment in 2015 and 2016.
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2CHINA, STEEL, COAL
AND RESOURCES
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3ELECTRIC VEHCILES A
KEY DRIVER OF SMALL
COMMODITIES
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ELECTRIC VEHCILES A
KEY DRIVER OF SMALL
COMMODITIES
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4DISRUPTION STILL A THEME
PLAYING THOUGH SMALL &
MICROCAPS
• 30% of American households don’t have a credit card
• Of Americans 35 and younger, 58.9 percent hold credit cards
• A Fed survey found the 18 to 24 demographic preferred to pay cash more
than others. And if they do carry a card, it tends to be of the prepaid or debit
variety, TD Bank found.
• A recent analysis of Fed data by the New York Times showed that “the
percentage of Americans under 35 who hold credit card debt has fallen to its
lowest level since 1989”
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DISRUPTION STILL A THEME
PLAYING THOUGH SMALL &
MICROCAPS
Source: CNBC 8/11/2017
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DISRUPTION STILL A THEME
PLAYING THOUGH SMALL &
MICROCAPS
Source: CNBC 8/11/2017
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5MANUFACTURING IS
CHANGING
• 3D Printing will change
manufacturing
• Expected to be 40% of all
manufacturing in 20 years time
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BUSINESS UPDATE
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EXPANDED TEAM
PAUL BOLINOWSKY – CHIEF EXECUTIVE OFFICER
BROOKE LOGAN – MARKETING DIRECTOR
JACKSON LEE - ANALYST
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SKIN IN THE GAME
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
19/09/2017 9/10/2017 24/04/2018 18/06/2018 19/07/2018
Director Purchases
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PORTFOLIO UPDATE
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BEST STOCK ABSOLUTE
RETURNS QUARTER
-30 -10 10 30 50 70 90 110
Dropsuite Ltd.
Titomic Ltd
Afterpay Touch Group Ltd.
Emeco Holdings Limited
BOUNTY MINING LIMITED PRE IPO
BWX Ltd.
Lovisa Holdings Ltd.
Noni B Limited
Cann Group Ltd.
Shine Corporate Ltd.
Fiducian Group Ltd
Service Stream Limited
Pioneer Credit Ltd
Xref Ltd
Experience Co Ltd
Smiles Inclusive Ltd
Swift Networks Group Ltd.
Afterpay Touch Group Ltd.
a2 Milk Company Ltd.
Uscom LimitedFor
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CONTRIBUTION TO
RETURN - QUARTER
-0.60 -0.10 0.40 0.90 1.40 1.90 2.40 2.90
Emeco Holdings Limited
Afterpay Touch Group Ltd.
Titomic Ltd
BWX Ltd.
CML Group Limited
Shine Corporate Ltd.
Dropsuite Ltd.
Alliance Aviation Services Limited
Afterpay Touch Group Ltd.
a2 Milk Company Ltd.
Apollo Tourism & Leisure Ltd
Emeco Holdings Limited
Swift Networks Group Ltd.
Pioneer Credit Ltd
Axsesstoday Ltd.
Fiducian Group Ltd
Uscom Limited
Afterpay Touch Group Ltd.
Experience Co Ltd
a2 Milk Company Ltd.For
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CONTRIBUTION TO
RETURN - YEAR
-2 -1 1 2 3 4 5 6 7 8
Emeco Holdings Limited
a2 Milk Company Ltd.
Alliance Aviation Services Limited
CML Group Limited
Titomic Ltd
Axsesstoday Ltd.
Shine Corporate Ltd.
National Veterinary Care Ltd.
Afterpay Touch Group Ltd.
Money3 Corporation Limited
GO2 People Ltd.
Swick Mining Services Ltd
Swift Networks Group Ltd.
MSL Solutions Ltd.
Pureprofile Ltd.
Webjet Limited
BWX Ltd.
PMP Limited
Vita Group Limited
Mitula Group Ltd.
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BEST STOCK ABSOLUTE
RETURNS YEAR
-50 -- 50 100 150 200
Emeco Holdings Limited
a2 Milk Company Ltd.
Alliance Aviation Services Limited
CML Group Limited
Byron Energy Limited
Otto Energy Limited
Axsesstoday Ltd.
Shine Corporate Ltd.
Dropsuite Ltd.
Swick Mining Services Ltd
Consolidated Operations Group Ltd Registered
Knosys Ltd.
Vita Group Limited
Swift Networks Group Ltd.
MSL Solutions Ltd.
GO2 People Ltd.
Webjet Limited
PMP Limited
Pureprofile Ltd.For
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SHAREHOLDER
COMMUNICATIONS
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AGM
Open to shareholders and non-shareholders
Opportunity to meet the team face-to-face
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NEWSLETTER
Weekly newsletter with updates on the portfolio.
Updates on events
News on small cap companies
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WEBINAR
Regular Quarterly Webinars
Can register on our website
Quarter 1
March
Quarter 2
June
Quarter 3
September
Quarter 4
December
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NATIONAL
ROADSHOW
Perth Melbourne Adelaide
Brisbane Sydney Canberra
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SOCIAL MEDIA
YouTube
Blog
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G L E N N O N . C O M . A U
QUESTIONS
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