Magic Markets #125: AnBro Stock Focus - IFF and RWAY

Craig Antonie is certainly no stranger to Magic Markets listeners. The team at AnBro Capital Investments regularly join us to talk through stocks that are either in the portfolio or on the watchlist.

As AnBro manages more than one type of fund, the watchlist can range from exciting growth stocks through to dividend paying compounders.

This week, Craig decided to focus on strong dividend payers that are on the watchlist.

The first is International Flavors and Fragrances (NYSE: IFF), a group that manufactures a wide range of products that are used in the food and cosmetics industry. One of three yoghurts sold in the world includes a product made by this company!

Although it is a long way up in the value chain and is a “picks and shovels” business rather than a miner, there’s been a significant unwind in the multiple during a destocking phase in consumer businesses. The dividend yield is significantly higher than the long-term average, so it earns a place on the watchlist.

The second is Runway Growth Finance (NASDAQ: RWAY), a small financial services firm in the US that provides growth capital to small business. There are specific regulatory requirements in the US that create the opportunity in this space, ranging from the need to lend to smaller firms through to a requirement to pay out a high percentage of profits as a dividend. With a strong founder behind the business, the future of this group looks interesting.

With some of the significant recent challenges faced by smaller US lending groups as interest rates have spiked, any financial services firm needs significant due diligence. That is why this company is still only on the watchlist.

With great underlying insights into concepts ranging from watchlist strategies through to being patient through cycles, this is another excellent learning opportunity with the team at AnBro.

Episode 125 of Magic Markets is brought to you by AnBro Capital Investments, an authorised Financial Services Provider FSP number 48371.