July was another positive month for global stock markets. Volatility was high, but strong corporate earnings and the fall back in the oil price towards the end of the month were both helpful for investor sentiment. Evenlode Income rose +5.5% compared to a rise of +3.7% for the FTSE All-Share and +3.9% for the IA UK All Companies sector.
The strongest contributors were Rotork, Sage and RELX. Rotork announced a recommended cash offer from Swiss-based engineering firm ABB at an offer price of 503p, representing a premium of approximately +73% to the undisturbed share price. Sage reported strong organic revenue growth of +11% in the second quarter, benefiting from growing demand for its AI-enabled services. RELX reported healthy interim results with underlying revenue and earnings growth of +7% and +11%, respectively. All four divisions grew well, with an AI-driven acceleration of revenue growth in both its STM (Science, Technical and Medical) and Legal divisions.
The main negative contributors to return were Games Workshop and AstraZeneca. Games Workshop fell back after a strong run for the shares – though released solid full year results with revenue and earnings growing +12% and 5% respectively. AstraZeneca’s share price sold off at the beginning of the month following an unsuccessful trial on one of its pipeline assets, Wainua. The company released good interim results towards the end of the month with constant currency revenue and core earnings per share growth of +6% and +11%, respectively, and reiterated its 2030 ambition for $80bn of revenue.
More than 85% of the portfolio has updated the market over the last month, so interim results season is almost finished. Good fundamental growth is coming through, and several companies upgraded guidance for the year.
In terms of portfolio changes, we reduced the position sizes in Intertek and Rotork, whose share prices have rallied strongly following takeover offers. We recycled this capital into a variety of existing positions, and also initiated three new positions – one in July, and two in the first week of August – which we will disclose in due course.
We see a very broad range of opportunity across our universe of competitively advantaged, high return-on-capital, UK-listed companies - from UK-based global market leaders to domestic market leaders, from consumer-facing to business-to-business franchises, and across the market capitalisation spectrum. The portfolio’s free cash flow valuation is as good as it was in the early days of the fund during the 2009-11 period.
July was another positive month for global stock markets. Volatility was high, but strong corporate earnings and the fall back in the oil price towards the end of the month were both helpful for investor sentiment. Evenlode Income rose +5.5% compared to a rise of +3.7% for the FTSE All-Share and +3.9% for the IA UK All Companies sector.
The strongest contributors were Rotork, Sage and RELX. Rotork announced a recommended cash offer from Swiss-based engineering firm ABB at an offer price of 503p, representing a premium of approximately +73% to the undisturbed share price. Sage reported strong organic revenue growth of +11% in the second quarter, benefiting from growing demand for its AI-enabled services. RELX reported healthy interim results with underlying revenue and earnings growth of +7% and +11%, respectively. All four divisions grew well, with an AI-driven acceleration of revenue growth in both its STM (Science, Technical and Medical) and Legal divisions.
The main negative contributors to return were Games Workshop and AstraZeneca. Games Workshop fell back after a strong run for the shares – though released solid full year results with revenue and earnings growing +12% and 5% respectively. AstraZeneca’s share price sold off at the beginning of the month following an unsuccessful trial on one of its pipeline assets, Wainua. The company released good interim results towards the end of the month with constant currency revenue and core earnings per share growth of +6% and +11%, respectively, and reiterated its 2030 ambition for $80bn of revenue.
More than 85% of the portfolio has updated the market over the last month, so interim results season is almost finished. Good fundamental growth is coming through, and several companies upgraded guidance for the year.
In terms of portfolio changes, we reduced the position sizes in Intertek and Rotork, whose share prices have rallied strongly following takeover offers. We recycled this capital into a variety of existing positions, and also initiated three new positions – one in July, and two in the first week of August – which we will disclose in due course.
We see a very broad range of opportunity across our universe of competitively advantaged, high return-on-capital, UK-listed companies - from UK-based global market leaders to domestic market leaders, from consumer-facing to business-to-business franchises, and across the market capitalisation spectrum. The portfolio’s free cash flow valuation is as good as it was in the early days of the fund during the 2009-11 period.