Blue Sky Alternatives Access Fund Ltd specializes in investments in venture capital, private equity, private real estate including infrastructure, commodities, farmland, agricultural water entitlements, and real assets such as water rights.

Australia

Wam Alternative Assets Limited

Financial Services

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. At the same time, the average five-year yield has been significantly higher and exceeded most of its peers. On average, the company pays dividends twice a year. 

WMA.AX reported revenue of AUD 19mn in the last 12 months, up 159% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 97% from FY23 to AUD 0.06.

Over the past six months, the stock has consistently fallen, resulting in a 10% total decrease. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 3ppts and its growth accelerated by 0ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 43.7% in the last 12 months, a decline from 70.4% in FY24. 

Historically, WMA.AX has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 59.6%, a growth from 56.3% in FY24. 

In the last 12 months, the return on capital employed (RoCE) grew to 4.8%, below the peers. 

Wam Alternative Assets Limited reported a return on equity (RoE) of 4.8% in the last 12 months, up from 2.8% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to 3.9% in the last 12 months, an increase from 2.3% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.1 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

WMA.AX has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is usually quite stable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, and excessive margin volatility.

In highly turbulent market conditions, WMA.AX is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, WMA.AX is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Considering past and projected metrics, the stock is 'expensive' compared to its peers. Specifically, the stock is fairly valued on P/E, overvalued on EV/EBITDA, overpriced on P/FCF. 

Wam Alternative Assets Limited

A$ 0.94

3

Wam Alternative Assets Limited

A$ 0.94

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 0.94

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