Ann: Becoming a substantial holder from MUFG, page-32

Playing Ducks and Drakes with SP

Games may well be played with NWH's SP, but I am not convinced it is deliberate action by the Significant Shareholders. Let us consider Mitsubishi UFJ Financial Group (MFUG).

MFUG is unlikely to have a cabal of gnomes scheming to outwit NWH's retail share holders. MFUG simply reports shareholding changes pursuant to ASX requirements. MFUG is one of the largest banks & financial services companies in the world, and if it owns 20% or more of any other financial services company it is obliged to report their holdings of ASX listed stocks if the combined holding is 5% or more of that stock.

MFUG owns at least 20% of Morgan Stanley (21% initially, but it may now be 24%). MFUG would not control what NWH shares Morgan Stanley buys and sells, and Morgan Stanley itself would to a degree simply buy and sell what some of its investors request. Morgan Stanley has grown by acquisitions, so it may still use trading names that reflect its history, and NWH shares held under these trading names would also be reported by MFUG.

MFUG also owns 100% Colonial First State Global Asset Management (bought from CBA), and now called First Sentier Investors, which fully owns Stewart Investors and FSSA Investment Managers. First Sentier Investors would have clients select the stocks they want to buy or sell, and in those cases it is not the fund manager who makes the decision – it is the investor.

Charting

I am not into charting, but I suspect that in June it may tend to be unhelpful. There are too many other forces that induce individuals and funds to buy and sell by 30 June that my not reflect what they think about the stock. I did ask about this a few weeks ago, but I do not recall that anybody responded.

Mantras -- Cash is king – Cash is trash

While some are intoning cash is king, others are saying Cash is trash, implying that Modern Monetary Policy is going to down-value cash. Where is all the global cash going to be parked, if folk are concerned about the value of cash – some will go into gold, some to pay down debt, and some will be invested in performing stocks, so its up to NWH to show it fits into the last mentioned.

Silence and doubt

Investors hate silence and doubt, and these soon conduce to worst-case thoughts. That is why after a period of doubt, even bad news gives an SP a fillip, because “bad” is better than “worst case”. NWH's Management tends not to talk up the SP, but they cannot be silent for ever. Announcement-worthy contracts will be landed, and mandatory EOY reporting will have its day, so we may have to wait for these things to happen. The Preliminary Report is slated for 20 August.

Last year, there was an FY20 outlook given on 4 June. I do not recall that an outlook has been given for FY21, but the Euroz Presentation stated, “Strengthening Pipeline circa $10.0B”, and “Circa $1.8B(2) of revenue cover for FY21”. In my book, that is a strong position in which to be, particularly considering NWH is on three short-listed consortia for Mainroads WA.

PS for Sabine. Calida is an adjective that means hot in Latin applied to a noun that is grammatically female. But callida means crafty. So Sabina callida could apply to a woman named Sabina, or a woman of the Sabine tribe.