Opportunities Await

8 March 2016

Opportunity Awaits

For the first 2 months of the year investors have incurred a torrid time. However those of you that have
listened are now reaping the rewards of savvy investing. has been a strong advocate that the
market reaction was over extended and promoted taking the selloff as a buying opportunity to add
quality stocks to your portfolio. Share prices are now bouncing and bouncing fast. The ASX 200 is up
over 7% from its lows in under a month. For those long term investors that chose to listen you will be
sitting on a tidy profit. However opportunities still exists.

Focus on quality stocks at cheap prices:

has identified a number for stocks that we believe have been wrongly punished in the market selloff. These are companies that we believe have no inherit problems but short sellers (investors that profit from a fall in share prices) have taken advantage of the negative and frail investor sentiment of late. We believe short sellers may be forced to cover their position causing the share price to rally further. Accordingly we see extraordinary value in some of these stocks. Below is a list of the 35 worst performing stocks on the ASX. We have highlighted the stocks that we like most over the medium term. We do NOT advocate buying stocks that are ‘cheap’ because they share price has declined. We believe in buying good business for cheap prices. Investors should not simply buy because prices have fallen rather that fundamentals have become misaligned with the share price.

Santos

Santos Limited is an oil and gas producer. The Company’s principal activity is the exploration for, and
development, production, transportation and marketing of, hydrocarbons. It has an Asian portfolio, with
a focus on three core countries: Indonesia, Vietnam and Papua New Guinea. It is a producer of natural
gas, gas liquids and crude oil in eastern Australia. It sells gas to domestic retailers and industry while gas
liquids and crude oil are sold in the domestic and export markets.

Why has the share price declined?

The oil price has declined significantly over 40% for the past year on demand supply imbalances. The
price of oil is a key revenue driver for Santos.

Why we like it:

U.S. oil prices have climbed 45% off a 13-year low reached in February as investors have focused on talks
among producing nations about freezing output and expectations that U.S. production will keep falling.
Oil prices have risen steadily in recent weeks after Russia, Saudi Arabia, Venezuela and Qatar agreed last
month to freeze their output at J
anuary levels in an effort to support prices.

Select Harvest

Select Harvest is Australia’s second largest almond producer and the largest listed almond company in
the world. SHV performs basic processing for the majority of its export volume and the remainder is sent
for further processing by the company’s Food division.
Why has the share price declined?

Almond prices have come off their record high prices achieved last year. Prices are down 21% from their
all-time high.

Why we like it:

Despite a moderate drop in the almond price, the Select harvest share price has plummeted. We believe
that this is a major over reaction. Long term fundamental for the industry remain strong. A growing
Asian middle class is placing major demand pressure on agricultural resources. We believe this will result
in higher prices for producers and consequently greater profitability. believe the ‘Dining Boom’
Thematic is set to be a multi-year investment theme and Australasia is set to directly benefit from this
dynamic given their favourable trading arrangements and close proximity with China and the rest of
Asia.

Global almond consumption has grown by approximately 8% per annum over the past decade, with
China and US demand growing significantly. is a strong believer in the future of the agricultural
sector as global growth transitions away from manufacturing and towards a more consumer centric
environment.

BHP Billiton

BHP Billiton Limited is a global resources company. The Company is engaged in exploration,
development, production, processing and marketing of minerals, such as iron ore, metallurgical and
energy coal, copper, aluminum, manganese, uranium, nickel, silver and potash.

Why has the share price declined?

Commodity prices, which are the main driver of BHP’s revenues, have fallen sharply over the past 2
years. Further, the natural disaster at Samarco has hurt the company’s share price performance.

Why we like it:

The market has over reacted to number of negative factors for the resource industry. We believe they
have become overly bearish and this has caused a dislocation with fundamentals. BHP’s market leading
position, size, lower cost base, and diversification across regions and commodities means it will continue
to outperform resource sector peers.

Ansell

Ansell Limited provides a range of protection solutions. The Company is engaged in the development,
manufacturing and sourcing, distribution and sale of gloves and protective personal equipment in the
industrial and medical gloves market, as well as the sexual wellness category across the world.

Why has the share price declined?

The poor share price performance is a result of a perceived slowing growth in China. This has led many
to believe that Ansell’s industrials division will suffer as a result.

Why we like it:

We are not as bearish on China growth as the rest of the market. We believe that China is in a stage of
transition and over time growth will moderate but still be strong relative to the rest of the world. Further
Ansell sexual wellbeing division is showing strong signs of growth and we believe has a large amount of
upside given the size of the addressable market.

ANZ

Australia and New Zealand Banking Group Limited (ANZ) provides a range of banking and financial
products and services to retail, small business, corporate and institutional clients. The Company
conducts its operations in Australia, New Zealand and the Asia Pacific region.

Why has the share price declined?

A number of factors including regulation changes, credit concerns, a slowing hosing market and
disappointing Asian growth have plagued the share price.

Why we like it:

Of the big four banks, ANZ has been the hardest hit. We think that majority of the bad news is now
priced in and therefore the stock offers the best risk reward of the major 4 banks. ANZ offers an
attractive dividend yield at the current price.

Myer

The Company is engaged in the operation of the Myer department store business. It operates in
Australia in the department store retail segment. Its store network includes a footprint of approximately
60 stores in retail locations across Australia.

Why has the share price declined?

Difficult trading conditions for retailers of the past 5 years as seen profits decline and the industry as a
whole struggle. This has translated into poor earnings for Myers. In the past the high AUD has made
online sales attractive for consumers.

Why we like it:
Consumer conditions are currently very accommodative. Interest rates are set to remain low for the
medium term in addition to low fuel and cost inflation. This should translate to an increase in discretionary

income for consumers over the near term. Naturally, major retailers such as MYR should benefit from the
increased consumer spending which should provide further uplift to the company’s sales growth.

For the first 2 months of the year investors have incurred a torrid time. However those of you that have listened are now reaping the rewards of savvy investing. has been a strong advocate that the market reaction was over extended and promoted taking

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