Question: Technology One (TNE) has gone down a fair bit lately. It had been doing very well until this year. What is your opinion of this stock? Is it still fundamentally a solid company just having a few hiccups?
Answer (By Paul Rickard): I don’t follow Technology One (TNE) that closely and can’t offer too many insights. It is a pretty solid company that has a good track record of delivery. The brokers were a little underwhelmed with the half year result and messiness over guidance. According to FN Arena, there are three neutral recommendations. The consensus target price is $4.797 – range $4.77 to $4.82 – about 10.5% above the current price.
Question: I noted Charlie’s article on inclusion of China A-shares in the MSCI. We have a holding in the IEM ETF, which had previously excluded China. Should we see the title of the fund purely as a “product name” for the existing ETF or is it likely they will re-balance the ETF to reflect the changed MSCI composition?
Answer (By Paul Rickard): From 31 May, the index (MSCI Emerging Markets) will include approx. 226 Large-Cap China A Shares. The overall weighting will initially be less than 1% – about 0.8%. As IEM tracks this index, I would expect it to re-balance to take account of the index change. You might like to check with the issuer (iShares) to confirm this.
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