Transcription of Finance News Network with Hunter Hall Global International (ASX:HHV) CEO, David Deverall Carolyn Herbert: Hunter Hall Global Value Limited
(ASX:HHV) is a listed investment company that has traded on the ASX since the 19
th March 2004. I’m Carolyn Herbert and joining me at the CEO Sessions in Sydney is the Hunter Hall International CEO, David Deverall. David, welcome back.
David Deverall: Hi Carolyn.
Carolyn Herbert: Can you start by giving us an introduction to Hunter Hall Global Value?
David Deverall: Hunter Hall Global Value as you said, listed on the Stock Exchange in 2004. It’s got a very good long-term track record of delivering. And what the company is trying to do is to buy a portfolio, or hold a portfolio of international and Australian stocks, with a bias towards those stocks that are called small to midcaps. So market capitalisation is less than $10 billion and also with an ethical screen. So we don’t buy companies that we believe are harmful to the environment, to people and to animals.
Carolyn Herbert: What’s the split between international and local stocks, and how’s this changed over the year?
David Deverall: The split’s roughly 70 per cent international and 30 per cent domestic. But a number of the domestic stocks that we hold are essentially international companies anyway. They just happen to be listed here in Australia. So the true split would probably be something like 85 per cent global, 15 per cent local.
Carolyn Herbert: Now to some of your larger positions. What is the Fund holding and what are your expectations for the next six to 12 months?
David Deverall: One of the favourite holdings for many years has been Sirtex Medical Limited
(ASX:SRX), which is still above 10 per cent of the Fund. It’s an Australian company that has a process for curing liver cancer, or treating liver cancer. And it’s been enormously successful with its trials, and growth is just taking off. So that’s been a wonderful stock for us today, and we expect it to be wonderful into the future.
Another very successful stock, particularly over the last 12 months, has been St Barbara Limited
(ASX:SBM), which is a gold mining company with mines in Western Australia and Papua New Guinea. We bought that about 12 months ago when it was trading at about 15 cents per share. Over the course of the last 12 months management has done a superb job, executing on its strategy and the share price has increased almost tenfold, as we speak today.
Carolyn Herbert: Hunter Hall has a long history of being an ethical investor. What stocks do you avoid and how has this changed over the years?
David Deverall: As I said the screen that we use is we don’t like to buy stocks that are harmful to people, to animals and the environment. And the way in which that works in the portfolios that we construct is that we don’t buy companies in the tobacco sector, the gambling sector, the armaments sector and more recently, in the fossil fuels sector. Now that decision, which we took roughly two years ago, has been a really good one for our investors, because exposure to fossil fuels has been a very poor investment decision over the last two years.
Carolyn Herbert: How has avoiding these sectors affected performance?
David Deverall: Well it’s been very good for our performance. So not holding many of the fossil fuel stocks, we believe, has probably added at least five per cent to the performance of the Fund.
Carolyn Herbert: Now to the FY2015 results for Hunter Hall Global Value. What were some of the highlights there?
David Deverall: It was a very good year. Investors received a total shareholder return of roughly 27 per cent. Profits after tax were up 29 per cent and also there was very attractive dividends paid through the course of the year. An interim dividend of four cents, a final dividend of four cents and a special dividend of four cents. That made 12 cents worth of dividends throughout the year, excluding the special dividend. That represents about a seven-cent dividend yield, so it’s a very attractive stock.
Carolyn Herbert: Finally David. What do you make of the current market volatility and does this pose any concern for you?
David Deverall: Current market volatility is almost the standard course of action in investing in stock markets. And our fund managers do struggle through sleepless nights on many occasions dealing with that volatility, however, are very focused on understanding companies from the bottom up. And focusing on companies that look cheap that are in that small to midcap space, and also pass our ethical screens. And we think if they can do that they can ride through the volatility, whatever is the source of that volatility.
Carolyn Herbert: David Deverall, thanks for the update on Hunter Hall Global Value.
David Deverall: Thanks Carolyn.
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