According to Money Management, of the funds launched within the last three years, the Saville Capital Emerging Companies was the best performer in the year to June 30th 2018, gaining a whopping 64 per cent in those 12 months.
The fund is extremely concentrated, with 95 per cent of its capital investing in 14 stocks.
Here are 3 ASX shares highlighted in the fund’s July 2018 monthly update.
The Longtable Group Limited (ASX:LON) share price fell 20 per cent in July, with Saville saying the weakness was likely due to the recent capital raising and the short-term supply/demand imbalance this has created for the stock.
Longtable is focused on the premium end of the food and beverage industry. Its brands include Maggie Beer, Paris Creek, and the recently acquired St David Dairy. The company’s managing director is former Bellamy’s CEO Laura McBain.
Longtable raised $15 at a share price of 70 cents as part of its $15.25 million acquisition of inner-city Melbourne dairy business St David Dairy.
Today, Longtable shares languish way below the placement price, trading at just 48 cents.
Saville says that with many long term investors increasing their holdings via the placement, this naturally leaves a lack of buying demand to soak up any marginal selling volumes.
The fund expects this will correct itself over time, assuming it sees evidence of improving financial results from its recent acquisitions, which it expects.
Longtable is capitalised at around $60 million. The company itself is forecasting FY18 sales of $5.7 million (+27 per cent) and EBITDA of $1.7 million (+26 per cent). It intends to grow brands and products with broad consumer appeal that can scale not just nationally, but globally.
The Redbubble Limited (ASX:RBL) share price was flat in July despite the company delivering what Saville said was an outstanding Q4 result, with revenue up 34.5 per cent and gross profit up 36.8 per cent.
Redbubble is a fast-growing global online marketplace that connects artists and independent designers with customers and print-on-demand fulfillers around the world.
Saville said Redbubble is guiding to EBITDA profitability of $2 – $4 million in FY19, underpinned by another year of at least 30 per cent revenue growth. The fund increased its holding in the company following the result.
Millennium Services Group (ASX:MIL) is a cleaning and security service provider operating in Australia and New Zealand, primarily servicing retail shopping centres, commercial properties, government, education and sporting facilities.
Since listing on the ASX in November 2015 at $2.25, the Millennium Services share price has more than halved, now trading at just 98 cents. The company missed its prospectus forecasts and subsequent earnings guidance.
Saville says it’s not surprising the CEO and CFO have been replaced, with new CEO Craig Hanley already having a positive impact on the company’s success in winning new tenders, notably Vicinity Centres.
Saville is attracted to the company by the strength of the management team and corporate culture, saying it has the potential to drive significant value creation.
Based on Saville’s forecasts, Millennium Services shares are very attractively priced, trading on a FY19 P/E of less than 7.5 times earnings. Directors have also been buying Millennium shares in the past few months.
Microequities Asset Management recently declared it owns more than 5 per cent of Millennium Services.