Question: I recently had my M2 Telecommunications shares merge with Vocus Communications (VOC).
Is there any reason why Vocus shares continue to rise, even though their yield is only about 2%? Should I take profit on offer now or is there continued upside to share price to any particular level?
Answer: (Paul Rickard): The three major brokers who cover the stock have buy recommendations on the stock, and the consensus target price is $8.87.
Like you, I am a bit surprised at how well Vocus has done.
While there is an old adage in markets about “letting your profits run”, there has to be some execution risk with the realisation of the merger benefits, so I would probably be inclined to take a profit or two.
Question: I want to model the Australian equities component into my SMSF based on your income portfolio. What’s the best way to keep track of the changes you make to the portfolio? Do you have any notification services?
Answer (Paul Rickard): It is a model portfolio, which is meant to demonstrate an approach to portfolio construction. For that reason, we do minimize the changes.
Typically, these only occur at the end of the month – and no more than a couple of times each year – or when we are forced to change due to a corporate action.
There haven’t been any changes yet in 2016.
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