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HY19 report: Is the WAM Global share price a buy?

Is it time to buy the WAM Global Limited (ASX: WGB) share price after reporting its half-year result for the six months to 31 December 2018? It could be.

WAM Global is the listed investment company (LIC) operated by Wilson Asset Management which invests in overseas shares that are deemed as small caps and mid caps, although by ASX standards they would be described as large caps.

For example, some of its largest holdings include(d) Bandai Namco, Walgreens Boots Alliance, HCA Healthcare, FedEx, Logitech, Diageo, Danone, Reckitt Benckiser, American Express and Alphabet.

Despite holding a large cash position, the WAM Global portfolio declined by 9% in the half-year to December 2018. This compares to the 5.7% decline of the MSCI World Index (AUD) and 12.3% decline of the S&P Global Mid Small Cap Index in AUD terms. It underperformed its official benchmark, but outperformed an index that is probably a better comparison.

There were several contributing factors to the declining global share market such as slowing global economic growth, the US-China trade war, rising interest rates and Brexit.

However, WAM Global Chairman and CIO Geoff Wilson said that China has increased China’s stimulus significantly and that a U-turn by the US Fed on interest rate hikes has provided equity markets with support, which is why WAM Global’s portfolio cash is down to 18.5% from 29.9% at the end of December 2018.

Mr Wilson said “We are confident that the portfolio comprises quality companies that will perform over the medium term, purchased at attractive prices.”

Indeed, the WAM Global investment portfolio has increased by 4.8% in February month to date.

Foolish takeaway

The accounting loss meant there was no dividend declared, but WAM Global is trading at a 5.5% discount to January’s pre-tax NTA. The current discount could be more than 10% at a share price of $1.91, which looks attractive to me.

However, if you want dividends right now then these top ASX income shares could be good picks for your portfolio.

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Motley Fool contributor Tristan Harrison owns shares of WAMGLOBAL FPO. 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.

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