Essays on ZRT Systems Investments Management Case Study

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The paper "ZRT Systems Investments Management" is a great example of a finance and accounting case study.   The fund management would strive to ensure that all, if not all, of the investor’ s money, should all be utilised in purchasing an assets portfolio that would bring in an overall investment return of 5% per annum. A proposed investment return of the whole amount would yield the following amount in profits; 5/100*200,000,000= $10,000,000/12= $833.333 per month Asset Allocation Background Research of Stock Options According to the Australian Financial Review (2016), tech Initial Public Offers (IPOs) performed the best in the financial year ending 2016.

Technology stocks that were listed in the Australian Stock Exchange in 2016 performed better than their counterparts from other industries within the country, as they posted enormous shareholders within the very first year of the public listing. The 25 tech firms that were listed in the year all delivered an average return of 69.5% to the existing investors. The AFR continues to indicate that the immediate strongest sector of the period was consumer staples where the 7 newly listed companies enjoyed an average investment return of 37% for their underlying investors.

On the contrary, it is indicated that the worst-performing sector of the period related to financial services that experienced an enormous level of floats with a total number of 15 companies losing at least 8.1% of their total value. The study found out that there was a 12.9% increase in the number of IPOS in 2016 with more than 96 floats as well as an average investment return improving from 3.7% to 25.4%. It further concludes that there is currently a high-risk appetite for potential Australian investors to engage in making tech-related investments within their portfolios. According to the Australian Financial Review (2015), the top – most 10 stock options to watch in the market provides very significant information for potential fund management.

Given that the Australian economy is still experiencing a low growth environment, it is important for fund managers to engage in the selection of stock options that have the potential of providing a higher return level. The research review points a list of these stocks and their potential for growth. For this fund, the most viable 3 stock options from the list include; Thorn Group; which has continued to show signs of growth in terms of extensive business combinations and acquisitions as well.

The firm has made enough strategies to focus on consumer leasing business operations with Radio Rentals being able to experience growth from long-term contracts. In addition to mobile voice, data plans are also set to enhance the company’ s overall profit margins. RCG Corporation: is also expected to experience growth into the near future. The firm has been able to experience stronger like-for-like sales growth as well as earnings due to improved additional store roll-outs.

It is expected that the firm will sustain its dividend payout of 90% of its overall earnings, which is a sum of more 5.7% yield for income investors as a whole. Wesfarmers; has continued to post significant profits over the period especially in relation to its fundamental business of Coles, Bunnings Warehouse and Kmart. The company currently enjoys a 7.4% dividend yield. Primary Health Care; is also experiencing enormous growth. This growth is specially related to its diversified portfolio of healthcare assets that range from medical centre management; pathology services as well as a subsidiary business that offers software solutions to overall medical general practices.

There are expectations of 15% earnings growth for the next couple of years. Origin Energy; is also set to experience significant growth as a result of its business expansion strategy where it is set to export LNG from Queensland-an activity that will double its overall earnings in few years to come. Especially, an earnings increase of 25% is set to be posted in the next few years of its operations.  

References

Australian Financial Review (2016). ‘Tech IPOs best Performers on the ASX in 2016’. Retrieved from http://www.afr.com/technology/tech-ipos-best-performers-on-the-asx-in-2016-20170201-gu370d

Australian Financial Review. (2015). ‘Top 10 stocks with growth appeal’. Retrieved from http://www.afr.com/personal-finance/shares/top-10-stocks-with-growth-appeal-20150716-gidt71

Australian Government. (2014). Exchange-traded treasury bonds. Retrieved from http://www.asx.com.au/documents/products/AGB_Investor_Information_Statement_Exchange-traded_Treasury_Bonds.pdf

ASX Index Options. Retrieved from http://www.asx.com.au/documents/resources/index_options.pdf

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