The half year result for Sydney-based listed investment company Milton Corp (MLT) has produced a differing approach to the market compared with what we saw earlier in the week from linked Melbourne investors, Amcil (AMH) and Australian Foundation (AFIC).
Amcil and AFIC both trimmed their holdings of big cap stocks like Woolworths, Wesfarmers and especially the Commonwealth Bank and Westpac and went looking for value among small and medium cap stocks.
Yesterday Milton (valued at $2.7 billion, and about half the size of AFIC) revealed it is chasing dividend paying companies, and loading up on big cap stocks.
Milton says it spent $40 million on beefing up its stakes in large cap companies during the six months to December, and has another $100 million of cash to deploy this new year.
By way of contrast, Amcil says it is almost fully invested, while AFIC says it had more than $150 million to invest if it sees value.
Milton topped up its holdings of ANZ, Commonwealth Bank of Australia, Macquarie Group, toll road operator Transurban and oil refiner and retailer business Caltex.
Milton’s portfolio returned 4.9% for the six months to December last year, compared with the All Ordinaries Accumulation Index’s 0.5% gains. (AFIC saw a fall of 1.3% in its portfolio.)
Milton reported a 7.5% rise in underlying profits to $67.9 million, and a 4% rise in net profit to $68.6 million.
Investors will receive an 8.7 cents a share interim dividend, compared with 8.5 cents a share last year.
Among its top 10 investments at the end of December were Westpac Banking Corp, CBA, investment house Washington H Soul Pattinson, Wesfarmers, National Australia Bank and Telstra Corporation. Westpac, CBA and Soul Patts are the top three holdings, accounting for 26.6% of the portfolio.
The company also sold $25 million worth of shares in infrastructure group Cardno, bathroom product manufacturer GWA Group and laboratory testing services business ALS Global.