Patience rewards Investors

SHAREMARKET investors who stuck with WA’s blue chips will be feeling chuffed – the top companies have proved three times as likely to beat key benchmarks as their locally-listed peers.

Analysis by corporate adviser Trudo shows the total shareholder returns (TSR) of 14 out of WA’s top 20 companies by market value beat the All Ordinaries Accumulation Index for the year ending June 30.

In comparison, only one in four of WA’s 356 listed companies managed the same.

In fact, two thirds of the State’s listed companies fell into negative territory when considering TSR – a measure that includes capital growth, dividends, dividend reinvestment and rights issue.

Wesfarmers ended 2000-01 as WA’s biggest company by market capitalisation and rated 21st out of all the State’s listed companies for an annual TSR of 108 per cent.

Only two companies in the top 20 at June 30 eclipsed that – Aquarius Platinum, which returned 116 per cent, and Hardman Resources, which was enjoying a stellar run at the time to record 298 per cent.

While the top 20 largely sat in the first TSR quartile, WA’s best companies were mining and science-based technology stocks.

Solbec Pharmaceuticals led the list with a 525 per cent return. Next was Rand Mining at 440 per cent and Amity Oil at 321 per cent.

Apart from Hardman, others scoring double centuries were Basin Minerals, Kimberley Diamond, Tribune Resources and Environ-mental Solutions International.

Trudo managing director Anthony Wooles said some of WA’s overlooked blue chips shone through in a volatile year, including Wesfarmers, Bristile and Foodland.

“The big story is, in the past financial year, you have seen a number of quality firms that have stuck with what they do,” he said.

However, not all WA’s blue chips fared well. WA Newspapers was the biggest local company to sit in negative territory over one year, producing a TSR of – 1 per cent.

Other big players with negative results were Anaconda at – 51 per cent, Orbital Engine at – 60 per cent and ERG at – 66 per cent.

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