One of our regular features in the Switzer Super Report is our Fundie’s Favourite, where we ask a fund manager for the inside scoop on a company that they hold. Professional investors often have opportunities that retail investors can only dream about – how often would you get to meet the CEO of a company you want to invest in, for example?
But professional investors, just like retail investors, can get it wrong some times. Last year Platypus Asset Management portfolio analyst, Jelana Stevanovic, wrote about medical company Acrux. Acrux works on new delivery mechanisms for medicines that enable them to be administrated transdermally through fast drying invisible sprays and liquids. Unfortunately, that investment didn't pan out as planned and they divested it a few months later.
The reasons they outline below provide a useful lesson in knowing when it’s time to sell. And Platypus Asset Management isn’t an underperforming asset manager by any means, it’s prudent strategies like this i.e. knowing when to sell, have contributed to an annual return of 14.3% after fees (to end April), compared to a 10.1% return by the S&P/ASX300 Accumulation Index.