Australian Equities

We provide this monthly report to you following conclusion of the month of September.

The TAMIM Small Cap Fund was up +6.93% (net of fees) during the month, versus the Small Ords down -5.09%.

Over the last 12 months the fund is up +24.88% net of fees versus the Small Ords up +18.84%.

September is historically known as the most challenging month for equity market returns, but this year, it proved to be a positive outlier. The primary driver behind this robust market performance was the U.S. Federal Reserve’s decision to cut interest rates by 50 basis points, with indications of further reductions in the next six months.

 

 

We have consistently emphasised that rate cuts tend to be a strong catalyst for stock market performance, particularly for small and mid-cap stocks. This was evident in September as smaller companies outperformed, while large caps lagged. We anticipate this trend to persist in the months ahead.

 

 

Additionally, positive sentiment was bolstered by the Chinese authorities’ announcement of significant stimulus measures aimed at revitalising their economy and boosting consumer spending. As China is a key economic partner for Australia, this has promising implications for our economy.

As we have noted throughout this year, we believe we are in the early stages of a new bull market—driven by AI innovation and investment—that, based on historical patterns, could extend for the next 5 to 10 years. Our portfolio is strategically positioned to capture growth opportunities and undervalued stocks within the small and mid-cap segment.

As we enter the final quarter of the year, we anticipate some volatility in October due to geopolitical tensions in the Middle East and uncertainty surrounding the upcoming U.S. elections. However, once this uncertainty subsides and the election results are clear in early November, we expect the market to rally into the year-end and beyond.

Further details on portfolio updates for the month can be found in the portfolio section of this report. We look forward to sharing more insights in our next monthly update in November.

 

Sincerely yours,
Ron Shamgar and the TAMIM Team.

Praemium Limited (ASX: PPS) a provider of investment platforms and portfolio administration services, has been making waves in the financial technology sector. The company delivered solid financial results for the year, with EBITDA reaching $21.5 million. This represents a notable improvement on market expectations, driven by a particularly strong second-half performance. EBITDA increased by 42%, rising from $9 million in the first half to $12.5 million in the second half. This uptick in profitability reflects Praemium’s ability to control expenses while capitalising on strong revenue growth.

In fact, Praemium’s revenue for the second half grew by 15%, reaching $84.9 million, an indication of the company’s robust market position and price increases. This growth was underpinned by Praemium’s investment in capability, resilience, and IT security during the first half, which laid the groundwork for its subsequent financial success. Praemium’s scalable business model has positioned it well within the industry, with $57.4 billion in assets under administration, reflecting the company’s broad reach and strong standing in the financial services space.

One of the key strategic moves that has contributed to Praemium’s growth was the acquisition of the OneView business from Iress (IRE), a decision that has proven to be both strategic and revenue boosting. The acquisition enhanced Praemium’s revenue and EBITDA, further solidifying its position as a key player in the sector. The company’s ability to integrate the new business seamlessly while maintaining strong financial discipline is a testament to its management team’s expertise.

Looking ahead, Praemium’s growth prospects appear strong. The company has identified a gap in the market for next-generation IDPs (Investment Data Platforms), which it is poised to address with its new offerings. This product innovation is expected to drive further revenue growth and expand Praemium’s customer base to address the non custodial market for high net worth investors. Additionally, the company has remained committed to disciplined capital management, evidenced by its 1-cent dividend declaration and its ongoing on-market share buyback program. Praemium’s net cash position of $44 million provides the company with ample financial flexibility to pursue further growth opportunities.

Praemium’s management team is optimistic about the company’s future, with our estimate projecting EBITDA of $28 million for FY25. With the company trading at an EBITDA multiple of 8.5x, it remains an attractive option for investors seeking exposure to the financial technology sector and dividend income. Praemium’s combination of strong revenue growth, operational efficiency, and product innovation makes it a compelling investment opportunity in a consolidating sector.