IN BRIEF
Blackwall Limite
(ASX: BWF)63.45%;
Brookfield Prime
Property Fund (BPA)
48.36%; Agricultural
Land Trust (AGJ)
32.52%; Dexus
Property Group (DXS)
25.46%; Asia Pacific
Data Centre Group
(AJD) 24.22%.
Source: ASX as at
31-May-17.ARES
T
here are a num-
ber of stocks I
believe you can col-
lect to benefit from the ageing popu-
lation. Careful accumulation or
dollar-cost averaging should be ben-
eficial over the next decade or so.
Challenger(ASX: CGF): It domi-
nates the retail annuity market with
an established strong brand and is
expanding its distribution channels
both domestically and international-
ly. A little expensive. Be patient.
CSL(CSL): Global demand for blood
and influenza-related products will
continue to increase at rates well
above GDP growth. CSL is one ofthree major players in the global
blood-plasma-derived biotherapies
space with a market share over
30%. Diversification into influenza-
related vaccines provides another
earnings stream in a growth
category. A financially robust
company with strong management.
Greencross(GXL): Perhaps an out-
lier, Greencross is the leading inte-
grated pet care company in
Australia and New Zealand and the
largest provider of pet services.
Pets are great companions as we
get older and are spoilt by empty
nesters. Accumulate.
InvoCare(IVC):InvoCareisthemar-ket leader in funeral services. A
strong market position and solid rep-
utation support a narrow “moat”, or
competitive advantage. The number
of deaths is highly predictable, creat-
ing a reliable revenue stream. A pre-
mium valuation is justified given
growing revenue and earnings.
Accumulate nearer fair value.
Ramsay Health Care(RHC):
Australia’s premier private hospit
operator with an envious track
record. The “Ramsay Way” of l
ing after patients, staff and sh
holders works. The ageing
population will drive demand
company’s services. AccumHOLD DuluxGroup
The Intelligent Investor.James GreenhalghSource: Intelligent Investor; price as at 22-May-17 close of businessBUY
below
$5.00HOLD
up to
$9.00above
$9.00SELL
HOLDat $7.04COMPILED BY SUSAN HELY
Age has its
benefits
Peter Warnes,
Head of equities research, MorningstarD
uluxGroup lives up to the decades-old
slogan of its Berger paint brand: the
company “keeps on keeping on”.
For the half-year results to March 31
this year, it produced sales growth of
almost 5% in Australia, compared with
market growth of only 0.5%. This division
contributes half the group’s sales but more
than two-thirds of profit. It’s a fantastic
business with operating margins above
17% and a market share of around 46%.
The remainder of DuluxGroup’s busi-
nesses aren’t as strong but the best of
them is Selleys Parchem, which manufac-
tures the ubiquitous No More Gaps flexible
filler as well as construction chemicals.Here earnings rose 11% on f
to cost reductions.
In total, the company’s first-half
sales rose 4%, while underlying net
profit rose 9%.
DuluxGroup is not as cyclical as other
building materials companies. Paint is a
low-value, high-impact way to renovate
a home. Nevertheless, we can imagine
earnings falling 10%-20% in a “regular”
recession or housing downturn, with the
non-paint divisions most at risk.
The stock is priced on a forward
price-earnings ratio of 20, which isn’t
cheap. Yet this is a higher-quality busi-
ness than it appears at first glance. Hold.DEMOGRAPHICS
Future
prospectsF
und managers who
donate their
investment time to the phil-
anthropic company Future
Generation presented these
top Australian share picks
at a recent FG forum.
Geoff Wilson, Wilson
Asset Management:
Afterpay (ASX: AFY).
Ben Griffiths, Eley
Griffiths Group:
Noni B (NBL), PWR
Holdings (PWH).
Sean Fenton, Tribeca
Investment Partners:
Te ls tr a ( T L S).
Gabriel Radzyminski,
Sandon Capital:
Iluka Resources (ILU),
Mineral Deposits (MDL).
David Prescott, Lanyon
Asset Management:
PMP (PMP).P A-REITS
RTOTAL
RN- e-
or the
late.X
SHARES
STORIES
2 -ue