13 Oct 2014
The Cyan C3G Fund performed relatively well in September 2014, falling just 0.2% after all fees. This compares favourably with the All Ordinaries and Small Ordinaries Accumulation Indices which both fell 5.3% and 5.5% respectively; their worst monthly performance in more than 2 years.
To summarise the C3G Fund’s current major investments:
Our investment in software licensing business Rhype (RHP) has performed extremely well since our initial purchase, delivering price appreciation of 28% over the month. RHP is a high-growth, capital-light play in the rapidly growing cloud software industry.
We increased our position in telecommunications retailer Vita Group (VTG) to benefit from the improving performance of its suite of Telstra branded stores. Even though the stock has been a strong performer (rising 20% since our initial purchase) we continue to see further upside.
We built some smaller positions within the financial services industry including iSelect (ISU), Rubik Financial (RBK) and Praemium (PPS). We see medium-term growth in all three companies and leverage to earnings growth, again within capital-light business models.
We initiated a long-term position in the automotive aftermarket consolidator AMA Group (AMA). The business is well positioned to capitalise on the significant changes emerging in the automotive repair, aftercare and accessories market particularly post a major mid-year auto-repair acquisition.
We continue to like organic baby-food producer Bellamy’s Organic (BAL) due to the exciting outlook for growth, both domestically and in China. At the end of the month the stock was trading at a 40% premium to its August issue price.
Some pockets of value are rapidly emerging due to the recent share price weakness, but most valuations, in our opinion, remain stretched. The current market weakness combined with some pending corporate activity has presented some attractive opportunities to deploy further cash. As always, this will be done in a disciplined and considered manner.
For more information, please download our September newsletter Cyan C3G Monthly September2014 or contact us at our office.