Portfolio changes

Key changes

  • Exit SYD
  • Add MND


We’ve had a good run of corporate activity driven stockpicking of late.

A consortium led by IFM has tabled a 42% premium to VWAP for Sydney Airports, and as such, our thesis is largely played out. So we are taking profits on the stock and reinvesting in Monadelphous Group (MND).

Pleasingly, SYD joins Altium, Crown, and IRESS as four stocks that we’ve bid farewell from our portfolios as a result of corporate activity.


Our full investment thesis and stock story pack will be sent separately to our clients, alongside all downstream documentation (SoA/RoA text, commentary, portfolio positions etc). However we table a few high level graphs here.


  • Good quality mining services company, capital light, with strong cashflows
  • Provides a material exposure to infrastructure related revenues, and to relatively stable maintenance volumes
  • Very attractive valuation, with low expectations, on bottom of the cycle margins
  • Strong balance sheet (net cash)
  • Provides good exposure to Quality and Value factor premia


MND is a very capital light business, and doesn’t require much in the way of incremental capex to grow the business. That tends to mean that Monadelphous generates good free cashflows, which is an attractive quality.

Revenue forecasts

MND’s recent project wins, and the modest unwind of COVID-related project deferrals, saw revenues start to trend higher, enough that our econometric software can detect a positive direction, which suggests that the operational outlook appears reasonable.

Factor premia

MND trades like Quality, and Value, which is attractive to our investment approach. Note, however, that the stock appears to have little statistical factor loading to Min Vol, which is a little misleading. We’d suggest MND is a beta + story, that does well when the economy, markets and the AUD (as a function of global risk appetites) does well.

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