Ann: June 2014 AUMA - Quarterly Update, page-4

HFA, overlooked and poorly covered. The Small Cap Index (ex100) is currently trading at around 15x prospective FY15 earnings. Andrew Smith from Perennial says while the index looks relatively expensive they have been able to put together a portfolio with good prospects and an EPS 30% below the index. One example is HFA Holdings (HFA) that describes itself as a holding company for an assembly of global fund managers. HFA recently announced a transaction to buyout of $50 million worth of convertible notes. Smith says the earnings accretive deal has been somewhat overlooked and is an example of one of the value opportunities they have found in an otherwise expensive market. Smith estimates the buyout could deliver in excess of a 30% to HFA’s EPS. “It’s another stock we think is overlooked by the market and very poorly covered by brokers.” He discusses other sectors + stocks here: http://www.perennial.net.au/video-player