CTN-Contango Microcap Fund. A review.

Consistent Contango

Consistent Contango

Contango Micro-Cap Fund was reviewed about eighteen months ago (08/12/2013)  as a professionally managed fund with exceptional returns. Retail investors gain exposure to a difficult but potentially lucrative sector of the ASX.

Technical features

Over the past six months Contango has been in a gentle uptrend coming off firm support at about $1.

The past trading week started with two Dojis, the last being a Gravestone Doji (the same open and close prices for the day and an upwards tail indicating a failed attempt for buyers to push the share-price higher).

The 3rd day formed a bullish engulfing pattern, and as expected the following day (4th) a large green candle seems to have initiated an impulsive move higher.

Thus far today the candle appearance is that of  Dragon-fly Doji, indicating a pause in trending for the present.

There is a resistance level at $1.10 which if now penetrated would create a new target at $1.20

This should prove a favourable entry level for anyone wishing to invest in Contango.

Other information

http://www.contango.com.au/ctn_contango_microcap_investor_centre.php

http://www.contango.com.au/data/docs/reports/nta/2015%20Apr%20NTA%20Statement.pdf#page=1&zoom=auto,-202,842

The present share price is at a discount to the Net Tangible Assets before any tax effect, at $1.21.

The 20 listed stock holdings form the nucleus of a quality portfolio, which should continue to outperform.

The Dividend Policy continues to be to pay 6% of the NTA as dividends annually plus special dividends when possible.

Conclusion

This blog has a policy of not making investment recommendations. Readers interested in investing for exposure to the Micro-Cap Sector should first discuss its suitability for their needs with their financial adviser(s).

From a technical viewpoint this appears to be a suitable opportunity to invest.



Categories: Chart Review, Company review

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