Some more tinkering

During today's market carnage I made a couple of further changes to the AU portfolio. Firstly, I sold Pureprofile Ltd (ASX:PPL) for 6 cents on results because it reported a large share based payments expense which I was not expecting (even though I probably should have been). I can't stand it when management teams refer to profits before these costs.

I redeployed the proceeds back into Adairs Ltd (ASX:ADH) at $2.83. I think this business is trading at the low end of its historical normalised price-to-earnings range and crucially they continue to add members to their linen lovers program (up 10% in the past 12 months to just under 1 million). The market does not appreciate the stickiness and value of these customers in my view. Also, the recent half yearly report was not as disastrous as I had feared, especially in light one-off issues such as bringing the new distribution centre online.

With my remaining 10% cash I added Platinum Asset Management Ltd (ASX:PTM) at $2.35. The stock is trading on a grossed up dividend yield of well over 10% and more importantly the value oriented long/short style of this fund manager is coming back into vogue. I am hopeful that their funds will outperform in the near-term and that net outflows will reverse in the medium term.



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