Two notices that have caught my eye are summarised below. Here's what this fund manager has been buying:

Mach7 Technologies Ltd (ASX: M7T)

A change of interests of substantial holder notice reveals that Clime Investment Management Limited (ASX: CIW) has taken advantage of weakness in the Mach7 share price to top up its position.

The notice reveals that Clime has picked up ~2.7 million shares in the enterprise image management systems provider since 6 May. This has increased its stake to a total of ~21.79 million shares, which represents a 9.22% stake in the company.

Clime was paying between $1.00 and $1.15 for the shares. So, with the Mach7 share price currently fetching $1.03, investors are able to buy in at around the same levels.

One broker that would approve of these purchases is Morgans. It currently has an add rating and $1.68 price target on its shares.

Straker Translations Ltd (ASX: STG)

Another change of interests of substantial holder notice reveals that Clime has been increasing its position in this translation technology company.

According to the notice, the fund manager has bought over 2 million shares on-market since the end of last month. This has lifted its holding in Straker to ~5.4 million shares, which represents an 8.4% stake in the company.

The release explains that Clime paid between $1.90 and $2.35 for the shares, with the most recent purchases taking place on Tuesday. The latter price is just a touch under the Straker record high of $2.45. This appears to be an indication that the fund manager believes the company is going places.

So, with the Straker share price pulling back to $2.00 today, this could be an opportunity for investors to buy in at an attractive price. Ord Minnett certainly sees it that way. Last week the broker put a buy rating and $2.46 price target on its shares.

The post Fund managers are buying these ASX shares appeared first on The Motley Fool Australia.

Clime is an integrated wealth management business. Founded in 1996, its operations encompass private wealth advice, investment management, self-managed super fund administration, and share research and valuation. The company also offers a number of unlisted funds, along with the Clime Capital Ltd (ASX: CAM) listed investment company.

Before we dig into the announcement, it's important to note that Clime Investment Management sits at the smaller end of the ASX. At the time of writing, Clime has a market capitalisation of $31 million, with shares changing hands at 55.5 cents per share – up 30.59% for the day.

What did Clime Investment Management announce?

This morning, Clime released an announcement and associated investor presentation regarding recent trading conditions, a completed institutional placement and an acquisition.

With this, the company announced it has successfully completed a $4.5 million placement at an issue price of 46 cents per share. This issue price represents an 8.2% premium to Clime's last closing price of 42.5 cents.

The placement was undertaken to fund the acquisition of a series of businesses from SC Australian Holdings. Clime has agreed to acquire all of the issued share capital of each of Madison Financial Group, AdviceNet, WealthPortal and Proactive Portfolios – together, the MFG Entities – for $4.4 million.

The MFG Entities provide licensing, compliance, technology and support to around 100 financial advisory firms. The entities have around $3 billion in funds under advice and total gross annual revenue of approximately $34 million.

Clime expects to complete the acquisition in mid to late June.

Trading update

Along with the acquisition and associated placement, Clime also shed some light on its recent business performance.

The company stated that all segments were performing well prior to COVID-19. While the evaluation of the impact of the pandemic is in progress, the effects have been cushioned through the lowering of variable expenses and government support.

Quantifying these effects, Clime revealed gross funds under management (FUM) declined from $1,097 million on 14 February 2020 to a low of $874 million. Gross FUM as at 29 May 2020 was $969 million.

The company noted that its ordinary operating result (revenue less expenses) and net group result are positive. However, both results are below budget due to COVID-19. Net group result takes into account the ordinary operating result plus the impact of balance sheet investments and performance fees generated.

Clime expects these results to improve with the inclusion of JobKeeper and ATO benefits. Additionally, it has seen improving return on mark-to-market balance sheet investments to 29 May. 

As at 29 May 2020, the company had $4 million cash and $6 million in liquid investments on its balance sheet.

The post Clime Investment Management share price jumps 40% on acquisition news appeared first on The Motley Fool Australia.

Many are unlikely to sustain those yields – as I mentioned yesterday when looking at the retail sector.

Here are 7 companies that could well continue to pay out huge dividends to investors.

Source: Company reports, Commsec

One key factor to also consider is franking credits. Of the companies above, Industrea, 360 Capital, Cromwell all pay unfranked dividends. Franking credits can boost the after-tax returns investors receive considerably – particularly for those investors in low tax brackets or investors in retirement – as the last column in the table above shows.

Offsetting that is the fact that the real estate investment trusts (A-REITs) 360 Capital Industrial Fund and Cromwell Group both pay their dividends out on a quarterly basis.

For those looking for regular income, those two companies might be the perfect pick.

Looking into each of the seven companies above suggests that they are all able to sustain their dividends going forward, as long as they can maintain or grow their earnings.

That might be an issue for National Australia Bank, with credit growth slowing and already low, higher capital requirements and higher funding costs.

Foolish takeaway

It's quite possible to hold a portfolio of companies all delivering yields of more than 7%. Including franking credits, the seven stocks above average around 10%. With a return like that matching the long-term returns on the stock market from both income and capital growth, it doesn't take much to beat the index.

The post Can these 7 companies sustain their huge 7% or higher dividend yields? appeared first on The Motley Fool Australia.

For one, they are overlooked by other investors and their prices may be much cheaper. And secondly, some of these companies are offering whopping fully franked dividend yields of over 6%. When markets are down like the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) is today, knowing those lovely dividends will still flow into your account is a nice feeling.

Without further ado, here are 3 stocks for your watchlist…

Homeloans Limited (ASX: HOM) provides a wide range of home loans (No kidding) as well as  insurance products. In the last half year, the company reported a rise in adjusted net profit from $2.7 in the first six months of 2013 to $3.5 million in the second half. Lending volumes were up 12.4% and the company established a wholesale funding arrangement with major shareholder Macquarie Group Ltd (ASX: MQG). Homeloans is currently paying a delicious fully franked dividend of 7.6%.

MyState Limited (ASX: MYS) is another diversified financial services group, paying a fully franked dividend yield of 6.1%. Interestingly, the company provides the majority of its banking and other services to customers in Tasmania and mainly coastal regions of Queensland. With a price to book ratio of 1.4, MyState is far cheaper than any of the big four banks to boot.

Clime Investment Management Limited (ASX: CIW) is an investment manager, with around $527 million of funds under management. The company reported a strong half to December 2013 and declared a fully franked dividend of 2.5 cents per share. The company also paid an 8 cent capital return last year, annualised, that equates to 12.1%, partly franked. There's no certainty that the company will pay another capital return this year.

Our number 1 dividend stock – FREE!

All of these companies are worthy of a spot in savvy long-term investors' portfolios. My high-risk pick of the bunch is Clime, but for those more risk-averse investors Homeloans stands out.

NOTE: The original article suggested that Clime paid a 12.1% fully franked dividend. That was incorrect, and the actual 'real' annualised dividend yield is around 6.3% fully franked – which is still decent.  

I'd like to thank my data provider S&P CapitalIQ for that misleading information.

The post Calling all income investors: How does a 12.1% dividend sound? appeared first on The Motley Fool Australia.

Regarding Clime Capital, it is important to note an investment company is generally more operationally efficient and tax effective than managed funds, as investment companies are essentially closed and not subject to the application / redemption cycle. Shares can also be issued or bought back if appropriate and dividends are usually franked. Another advantage is that investment companies can sometimes be bought on the market at a discount to net asset backing; providing opportunities.

Clime Investment holds 8% of Clime Capital and has a stake of 19% in the unlisted Jasco Holdings (stationery, office supplies, fine arts and graphic supplies etc). Clime will also launch an international fund in March – this is to operate out of London and will be managed by Sanlam Private Investments (part of a large South African financial services business) using Clime's data and valuation methodology. Clime Investment Management is selling at 18 times prospective 2014 earnings, and appeals as a well managed high-growth stock.

Contango MicroCap Ltd (ASX: CTN) is a listed investment company specialising in micro to small-cap companies; both industrials and resources. Investment performance has been good over a number of years, easily outpacing the small ordinaries index. Although small stocks can be more volatile and do experience lower liquidity when compared to the ASX100, it is arguable whether this involves more risk. The level of risk is very dependent on management ability, financial health and the medium-term outlook for any business – whether large or small.

Smaller companies are under researched and experience greater market inefficiencies, creating a fertile ground for dedicated value investors such as Contango Microcap. In the five years to 31/10/2013 Contango Microcap returned a compound 17.2% pa – compared to 11.1% pa for the All Ordinaries Accumulation Index and 7.1% pa for the Small Ordinaries Accumulation Index.

Contango Microcap has a policy of a 6% dividend on the net asset value standing at the start of each financial year. If a dividend cannot be declared, a matching capital return will be made – this provides some assurance re income returns. In 2013, the 100% takeover of Contango Asset Management was completed, bringing the management company and associated activities in-house.

Foolish takeaway

Investing in a 'readymade' portfolio can make sense if you're starting out in the stock market or wish to diversify your own existing portfolio. Like any business investment, companies can be assessed on proven management ability, strategies, positioning and integrity – and of course, timing and the price available. I also like investment companies who stand away from the crowd as these can be superior performers over the longer term. Both Clime Investment and Contango Microcap are well qualified for serious consideration.

The post These 2 small investment managers offer bright prospects appeared first on The Motley Fool Australia.