Why WAM Capital Limited just bought more shares of Templeton Growth Fund Ltd

WAM Capital Limited (ASX: WAM) is one of the most successful investment companies in Australia, with its portfolio having delivered an average return per annum of 17.5% since inception in 1999.

It looks to invest in undervalued growth companies where a catalyst could increase the share price. WAM Capital also looks to provide exposure to value arbitrage and market mispricing opportunities, such as when a share is trading for less than its underlying value.

One such example is Templeton Growth Fund Ltd (ASX: TGG). WAM Capital (and the other WAM LICs) just increased the collective holding of Templeton Growth Fund from 7.8% to 9.18% at the end of April 2018.

At 27 April 2018 Templeton announced the estimated pre-tax net tangible assets per share was $1.577, yet the share price is only trading at $1.40 today, which suggests a discount of around 12%.

Templeton has done well for its shareholders with its share price growing from $0.90 five years ago to today’s $1.40. It has also delivered a pleasing dividend in that time, it currently has a grossed-up dividend yield of 4.59%.

Its top ten holdings include Microsoft, Samsung, Oracle and Alphabet (Google). Its holdings suggest it’s going for growth and it could continue to perform well.

Its dividend policy is to pay at least 3% of the company’s NTA at June of the prior year.

Foolish takeaway

Templeton appears to offer investors a decent dividend, international exposure and a discount to the NTA. I’d be happy to buy shares for the long-term at the current level and I can see why WAM wanted to buy more of it at these levels.

However, an even better buy could be this exciting share which is looking to expand into Asia this month.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!