Question: I have an SMSF of about $630,000, all of which is invested in mainly dividend blue chip stocks i.e. TLS, CBA etc. I have just been made redundant and will receive a termination payment of about $150,000. Also I will be transferring my company super fund benefit ($1,500,000) into my SMSF.
Can you recommend about three hybrid securities that you consider worthwhile investments?
Answer (By Paul Rickard): Hybrids are very expensive at the moment as spreads have narrowed, and getting set on the ASX (where you may need to hit the offer) could be pretty expensive. That said, you could consider some of the older issues – perhaps ANZPA, CBAPC, ORGHA.
Depending on how much you wish to invest, I would be spreading my risk further and investing in more than three issues.
Question 2: Would you invest in Hansen Technologies (ASX Code HSN) at the present time?
Answer 2 (By Paul Rickard): With a market cap of circa $200 million, Hansen Technologies is very much in the ‘micro-cap’ category. Unless I know something about the industry or the people involved with the company, I leave these sort of companies to the small cap fund managers.
Hansen is actually a bit of a rarity in this part of the market in that it actually has quite a decent track record. Notwithstanding that, I don’t have any insights about the “billing market”, or the recent acquisition of Banner CIS. History suggests that most Australian companies don’t make a good fist of offshore acquisitions – so this is also a ‘red flag’ for me.
If the question is “would I invest” – the answer is no.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
Follow the Switzer Super Report [1] on Twitter
Also in the Switzer Super Report:
- Tony Featherstone: How to get rich like the super rich [2]
- Ron Bewley: Setting up a yield portfolio [3]
- Staff Reporter: Buy, Sell, Hold – what the brokers say [4]
- Penny Pryor: Short ‘n Sweet – A-REITs and Dominos [5]
- Barrie Dunstan: Government should back off [6]
- Staff Reporter: Changes to superannuation in 2014/2015 – are you up to date? [7]