Melbourne Cup selectionsWell I know I haven't posted in a while but that is becasue I have been concentrating on my other hobby which is horse racing. There are good parrallels between the two topics of sharemarkets and horse racing.
Anyway I thought I would post my selections here :
Zipping and Master Oreilly are going to be hard to beat. Princess Coup is my other selection. I suspect it will be one of these horses who takes it out.
Throw in Gallic and Purple Moon and Tugsten Strike for the exotics.
Good Luck Do you believe it can happen ? According to NLP (Neuro Linguistic Programming), your behaviours in an activity are affected by the beliefs and values you have associated to it. As an example, say you want to become better at public speaking (behaviour) and you take some classes, but despite all the training, deep down you don't believe you are any good at public speaking, then when it comes around to standing up to speak, your body will respond to your beliefs and your voice will waver, etc. Then, when you get some feedback, you'll filter it through those beliefs, e.g. if there are two people both of whom are equally talented but one has the belief that they are a great public speaker and the other that they are not, then if they both get told that they are really good, one will believe it and use that comment to reinforce their belief further, whereas the other won't believe it and will probably find a way to use it to back up their belief that they are not.
This is all well and good but what has this got to do with Stock market trading? Well, part of your success or failure is related to the beliefs you have. If you don't believe that you'll ever make a profit or successfully trade at a new level of outlay then you will find a way to make that happen. This is where self sabotage appears. Where you do something stupid, knowing it's stupid, but do it all the same. NLP offers lots of processes for changing beliefs but sometimes, just realising that a false belief is present, can help bring it to the surface so you can start breaking it down and challenging it.
Ideally, this is why you find those who succeed are full of confidence. they had the confidence before they began and that is why they succeeded. If you are not confident then you need to work out a way that makes you more confident in your trading. That may be trading at a smaller outlay. For example instead of $20K per trade try to use only $2K.
Good luck Investing. Short Listed Companies for Considerationhere is a List of a few companys I think people should take a look at : ASX: KRS - Kresta Holdings Limited running at a PE of 9.11. Current Prince 30c. ASX:MCP - McPherson's Limited running at a PE of 9.57. Current Price $3.23 ASX:RHD - Ross Human Directions Limited running at a PE of 9.52. Current Price 60c ASX:AHD - Amalgamated Holdings Limited running at a PE of 12.67. Current Price $6.59 ASX:CMV - CMA Corporation Limited running at a PE of 9.99. Current Price 50c ASX:MXI - Maxitrans Industries Limited running at a PE of 12.09. Current Price 61c ASX:LAU - Lindsay Australia Limited running at a PE of 10.76. Current Price 26c ASX:TBG - Tutt Bryant Group Limited running at a PE of 11.32. Current Price $1.75 These companies passed my initial filters. From here each needs to be examined to see where it is going in the future, the debt/equity level, etc. But it is a good starting list. Good Luck The US sub-prime mortgage crisis has prompted the Australian Government to consider tightening regulation of the nation's lenders. A parliamentary committee has identified a need for stronger regulation of the lending sector, to ensure that predatory lenders do not cause a liquidity crisis in Australia. The committee has recommended giving the Australian Securities & Investments Commission the power to prosecute predatory lenders who prey on vulnerable consumers. The mortgage industry has welcomed the proposed changes, however the Financial Services Union has some concerns
Someone has to stop people lending money to those who can't afford to pay it. But it is the consumers fault in the end and I don't think we can lay blame on the lenders. Consumers should know whether or not they will be able to afford the mortgage they are getting into, I don't like the current "victim" mentality around the place that a lot of borrowers are taking.
It is their OWN fault if they did not anticipate interest rates rising.
This has caused so much instability in the market there may be a few good buys out there but they are still few and far between.
Good luck SIMS to explore offshoreAustralian scrap metal recycler, Sims Group, is discussing opportunities for overseas expansion. The company provided no details on discussions with prospects in Europe and North America. On 17 September 2007, it said that profit for the first quarter of 2007-08 was not likely to be above $60 million, a decline of 12 per cent. It expected strong metal prices to lift profit in the second quarter. Its share price fell by $A1.13 to $A32.01
SIMS has a good dividend yeild but is still overpriced at a PE of 16. I would not count of the earnings being lifted on supposed Metal price increases as they should have done much better this quarter with the curent prices. They are worth watching with a possible buy around $25.00
Good luck Optus Is flat but is the outlook better ?Singtel Optus has forecast flat earnings in spite of growing sales. On 17 September 2007, Optus predicted that sales growth would be between 2.5 per cent and three per cent in the year to 31 March 2008, above the industry average of about two per cent. EBITDA fell by 2.4 per cent to $A1.99 billion in 2006-07 and Optus does not expect to exceed this figure in 2007-08. Margins are declining because of the preference of mobile telephone customers for capped plans.
Is this going to be a longterm problem for optus ? My guess is no. they are building their customer base and although EBITDA fell this is an industry wide problem. the phone industry can be a hard place to make a few dollars but in order to reduce overhead costs you need a large customer base on which to spread it. Longer term optus has a good outlook in my opinion. Rio mine to go ahead
Rio Tinto (ASX:RIO) has gained environmental support for an iron ore mine in the Pilbara in Western Australia. In March 2007, the WA Environmental Protection Authority rejected the resources company's plans for a $12 billion mine because of the risk to troglofauna. However, the WA Government directed it to reassess its decision. On 17 September, it gave clearance for the project. Rio Tinto will enlarge the mining exclusion zone so that more troglofauna habitat is protected. The decision has disappointed the WA Conservation Council.
It shows what a bit of money can do. The WA government will get a lot more revenue from this going ahead and therefore asked for it to be re reviewed. It must be said this is both a ethical and environmental issue and there may be a slight backlash to the go ahead.
But when you look at RIO you can't be disappointed with their return to shareholders. RIO is a stable resource company and while at a PE of 14 is a bit expensive, it is always worth watching this share Channel Nine slow on uptake of Digital TVNine Network Australia has refused to disclose when it will launch a new high-definition digital channel. With Seven Network and Ten Network rolling out such new services in December 2007, Nine suggested it is making progress with a new high-definition offering, but said it has no announcement to make in regards to the issue. Goldman Sachs JBWere analysts said with ageing broadcast infrastructure, a limited number of quality programs and strained relationships with its broadcast partners, Nine is unlikely to immediately follow Seven and Ten in launching its digital channel
Nine is falling behind in the stakes to get the digital audience in the future. When you look at it, this may affect major contracts such as the Rugby league as these institutions will look for those companies that can offer the most to the viewers. This can only be seen as a negative for a company that is in a cut throat industry. babcock and Brown ReorganisationAustralian investment bank Babcock & Brown (B&B) has announced a reorganisation of its assets. Babcock & Brown Wind Partners (ASX:BBW) will acquire control of more than 750 turbines in the US and Portugal from B&B for around $600 million. CEO, Miles George, said the transaction will reduce the impact of regional wind variability on its performance. The deal resulted in BBW upgrading forecast payouts to security holders by 16% to $0.145 per security in 2008 and $0.155 per security in 2009.
Anything that can stabilise the returns from a company has to commended. but was it worth 600 Million. In my opinion I can't justify the cost. But investors appear to have taken to it.
This company is heavy in debt and would be much better using the money to get the Debt to Equity ratio down to a managable level.
The only good thing I can see about this company is the dividend yeild is at 7.9% but this won't hold if they keep spending money.
Good luck. Ross Human Directions Limited - BUYHi everyone,
My next purchase since JUM has been Ross Human Directions Limited (ASX:RHD).
The reasons I bought this stock include :
Technical bowl poattern forming in chart.
PE ratio is at 8.6
PB ration is under 1.5
PEG ratio is 0.5
Dividend Yeild is 7% fully franked
PS ratio is 0.16 ( Price to Sales )
EPS are forcast to grow by more than 10% for the next few years
The price is under $1.00
Debt levels are at maageable levels (29%)
Also they have had record profits recently.
I got into this share at 62c but I would suggest it is still a good buy up to 65c.
Of course this is just what I did and is not a recommendation that you buy the share as I do not know your financial position :) ...
Good Luck. JUM - Taking Part profitsI sold out of some of my JUM stock today (ASX:JUM).
The reason was that it has risen quickly from 2.3c to 3.2c. That is a huge gain for just a few weeks investment.
I have taken profits out of the stock as I don't want to lose these huge gains. I am still invested in the stock but not as much as I was yesterday.
Good luck. Record breaking day Rio Tito (ASX:RIO) hit the $100 martk yesterdeay in what was a historic day for the ASX.
Its the first share to make that price and although it slipped back before the close it was still a record breaking day.
RIO has been spurred on from the resources boom.
Mind you there are a number of other shares which could have hit that mark already had it not been for share spilt. Harvey Norman (ASX:HVN) comes to mind.
Good luck KME and WAL lead portfolio in poor day on marketI bought KME today.
While this has been a selection of mine for a while (bought in at 81c) I think now is a good time to top up the account. The PE is currently sitting at 16 which is high for stocks that I purchase. But the federal budget incentive plus the long term uptrend say this is a raging buy.
I bought in today at $1.395.
Another share which I am still raving about is WAL. I initally bought in at 22c and bought more at 20c and then 17c. It has returned to 20c and I am showing a small profit. When this company decides to do something with the cash it could be a big mover.
Good luck. Another Great investment at only 2.4c (well I think it is)I found another share which I just bought into on Monday.
The share is JUM.ASX
It is an interesting company that makes its money from gambling ( so no good for those of you who don't like gambling stocks). There were 2 big draw cards for me with this stock. The first being the amazing run of record profits. The second being a wise investment by management to buy back up to 10% of the shares on offer. This will greatly improve the EPS.
Another big draw card was the low cost to get into this share. It is only 2.4c
The price earnings is sitting around 10 so it is not overvalued at all. Combine this with record profits year to year and you have a great share. This one reminds me of my (still current) investment in ASU. This stock has potential....
Good Luck WAL - Wavenet I found a company worth buying because of a number of reasons.
WAL.ASX - Wavenet is a very special buy. When you look at the company you will notice several things.
1. The company has 9.4 million in the bank. 2. The company only has a capitalisation value of 10 Million.
These two lines should signal something straight away.... They are worth only $600,000 more then the money in the Bank. This is made up money, this is actual money in the companies bank account.
Lets have a look at their reports and we see that the first half of this year they produced a profit of 1.3 Million. Lets assume they make a profit of 2 Million for a full year.
So now we know
The company is worth 10 million. The companies has 9.4 million in the bank. They are going to make approx 2 million a year.
Does this not scream takeover opportunity. Someone could buy this company for 15 million, and pull out 9 million from the companies bank account (so effectively they have bought the company for only 6 million). They then own a company producing 2 million a year which they bought for 6 million ( that's a return on Equity ROE of 33% ).
Of course I have simplified the maths above and I assumed a takeover premium of 50%. Lets say the takeover premium is only 20% and you find the Return on Equity increases to 66%. Even for a respectable return on equity of 10% the company could be bought at a premium of only 100%.
The other option for this company is to use the money for an acquisition. Regardless of what happens the share price is going to move and its only going to move one way for this under priced stock and that is UP.
Good Luck. Where have I been ?Sorry to all those who ahev been waiting for me to post but I have been really busy.
Lucky for me my portfolio has continued to shine and is up a good percentage this year again.
I will try and get posting again on a regular basis as I find shares worth metioning.
Good Luck. End Of Feb Portfolio UpdateOnce again sorry for the lack of updates. I just have not had the time to post anything but I have kept in touch with the market. There has been some significant movement in the sharemarket recently and I just realised I have not put up the End of Feb figures for the portfolio.
Positions Changed:
None
Current Position:
RHD Bought at 65c now trading at 69.5c for a PROFIT of 4.5c (7%)
SCV Bought at 80c now trading at 77c for LOSS of 3c (-4%)
FEA Bought at 63c now trading at 71c for a PROFIT of 8c (12%)
CKL Bought at 59c now trading at 51c for LOSS of 8c (-14%)
MCP Bought at $2.65 now trading at $2.93 for a PROFIT of 28c (10%)
ASU Bought at 3.3c now trading at 3.1c for LOSS of 0.2c (-6%)
Portfolio
Cash : $51,066
RHD : $10,692
SCV : $ 9,625
FEA : $11,269
CKL : $ 8,644
MCP : $11,056
ASU : $ 9,393
Total : $111,745
Monthly Performance
Month 1: Profit of $4,688. Annualised this is a gain of 56%.
Month 2: Profit of $6,844. Annualised this is a gain of 78%.
Month 3: Profit of $ 213. Annualised this is a gain of 2.5%.
Closed Trades :
ITD Bought at 41.5c SOLD at 57.5c for a PROFIT of 16c (38%)
AVE Bought at $2.19 SOLD at $2.65 for a PROFIT of 46c (21%)
MPH Bought at $0.225 SOLD at $0.34 for a PROFIT of 11.5c (51%)
Commentary
It is very hard to find profitable stocks even thought the market is very volitile and is falling and rising every few days. I am happy that February ended in a profit although had I been watching it more closely I would have been out of a few stocks with a much higher profit ( we could have ended the month up around 4-5K). Anyway I still think these are the stocks to own and I will be holding them till a later date when I feel the are overpriced. Good Luck Investing.Market Stumble...I apologise by the lack of posts recently but I have been extremely busy.
But I still thought I should jump on and mention the impending stumble that should happen to the ASX today after the China and US markets took a dive last night.
Will the dive be as much here in Australia ? Probably not as I expect today's drop to be around 3-4% and it will continue to slide till it is off around 10% in the next few months. Its hard for the market to drop too much due to the amount of superannuation money being put into it.
Anyway good luck and I hope you have been waiting for this as I have. There will definitely be some buying opportunities coming up for those who waited for the inevitable drop.
Good Luck. Shareholder Benefit Updated Just to let you know I have added more shareholder benefits to the Shareholder Benefits Blog
The following shares have been updated or added:
- ANZ Banking Group Limited (ASX:ANZ)
Good Luck Investing Etrade buyout offerEtrade Limited (ASX:ETR) has either just suddenly acquired knowledge of a takeover talk or they were not telling the truth to the public back on the 16th Jan. See my article here on the inital gossip that takeover talk was underway at etrade.
ANZ Banking Group Limited (ASX:ANZ) plans to beef up the offerings of online broker ETrade Australia if its $268 million bid for the rest of the shares it doesn't already own is accepted by shareholders. ANZ, which owns just over 34 per cent of ETrade, says it is the natural owner after putting forward a $4.05 per share offer.
I also had an article here on how ETrade was going to boost the profit of ANZ and that ETrade might be a good acquisition.
Good Luck Investing. Funtastic trying to hide takeover talks
There was some news today on Funtastic Limited (ASX:FUN):
Toy company Funtastic says it has received an approach that could lead to a takeover bid. Day care chain ABC Learning says it has been approached by a third party regarding its stake in Funtastic. Any takeover would have to be approved by ABC Learning. It says the plans are in the early stages. ABC Learning has also reported a 57 per cent increase in after tax half-year net profit to $64 million.
Another article says : When it came to playing down a takeover approach, Australian toy company Funtastic took no chances. In a mastery of understatement, the company confessed it had received a “confidential, preliminary, incomplete and currently unfunded,” proposal. So top secret and confidential was this approach that Funtastic shares, which fell sharply in November after the company predicted that its results would not meet expectations, jumped more than 5 per cent on Friday, prompting a query from the stock exchange regulator. The shares traded up almost 10 per cent further on Monday to A$1.94. So preliminary, that the company’s biggest shareholder, ABC Learning Centres swiftly followed with a statement that it too had been approached about its 18 per cent stake in Funtastic but that no decision had been made. And so incomplete, that they’ve already got round to talking funding. In fact, this approach was obviously so trifling that, more than five hours later, Funtastic’s statement was still strangely absent from the ASX announcements section of the company’s website. A.B.C, Australia’s top childcare centre operator, said it had not made a formal approach to Funtastic itself but had been approached by another party.“A.B.C. has been approached by a third party in relation to a joint transaction which, if implemented, would result in a change in control of Funtastic,” A.B.C. said in a statement. Looks like Funtastic has finally got a move on. I have been preaching the value in this company in various posts such as here, here and here.
It has been a main part of my portfolio for a fair while now and I have made gains from $1.20 up to the current price of $1.90
I believe the price on offer if it comes will be in the $1.90 - $2.10 range although it may even be higher. The prospects for this company are being driven by the current baby boom occurring around Australia due to the baby bonus being offered by the federal government.
I am interested in seeing the price that may be offered but at this stage it is still in very early dealings and the whole thing may fall through. It is interesting to see the understatement being made on the takeover. It may be looked into in the future by regulators as directors not making all information available to the public timely is rather reckless.
This is one to watch in the next few weeks.
Good Luck Investing. Market Above 6000 I know this is a late post but congratulations to traders for pushing the market over 6000. No matter where you look these days analysts are stating that the market is approaching full value, is fully valued or is overvalued. I am one of the analysts saying the market is definitely overvalued. The market is trading at a PE of 17 which is higher than the adjusted ( for booms, crashes) PE range of 14.5-15.5. This means the market is overpriced by at least 9.6% I have also been reading that people were amazed at how quickly the market shot up 1000 points. This is only 20% and the last year has been a good year for the market. It took 11 months to make the range. Anyway lets hope for some sideways movement or even a bit of a decline as the market is defying gravity at the moment. And as they say the further it goes up ... the further, and quicker it drops. Good Luck Investing Launch of Share4holder Benefits Blog How many times did you look for shares that gave you that bit extra, or as a superfund how many times have you had to be careful on the shares you are purchasing as they have additional shareholder benefits that can cause legal issues ?
Well here is an easy way to find out those shares that have an extra bit of punch for the shareholder. I have launched my shareholder benefits blog and I hope to add 1-2 shares per week to the blog analysing the benefits which are currently offered.
I have launched the blog with an analysis of two companies that offer discounts to hotels and theme parks.
Please come and visit and gain some insight into those shareholder discounts and shareholder benefits you never really hear about but always wanted to know about.
Good luck Investing. United Group results look satisfactory Engineering firm, United Group Limited ( ASX: UGL), has performed satisfactory in the first half of 2006-07. It posted a net profit of $35.3 million, which was actually slightly lower than the same period from the previous year due to an $18.1 million write-down. But fortunately EBIT improved 23% to $62.3 million and revenue increased 18% to $1.3 billion.
United Group predicts growth to be strong in the second-half of 2006-07.
United Group is sitting on a price earnings (PE) ratio of 19 and a dividend yield of 3.3%. This is fairly standard in the market and unless they can find more growth in the second half of the year I don't see any value in the company. The $18.1 million write off hurt the result significantly but it does show the underlying fundamentals of the company are sound. My only concern with the company fundamentals is the 50% debt to equity. This is fairly high and a downturn in the industry will be a major issue for the company.
At this point of time I say wait for a better price.
Good Luck Investing. Coles still a takeover target Analysts from Investment banks are convinced that a further takeover proposal for Coles Group Limited ( ASX: CGJ) will be forthcoming.
The retail group's management is adamant it will maintain an integrated company with stores rebranded to Coles, but many investors are hungry for a split of assets. Such a sale could attract up to $20 billion, with the supermarket section itself worth $A13 billion.
Coles is due to release its half-year profit figures in March and there is speculation that this may be the trigger for takeover movement. The recent takeover bid was $15.25 per share and even then the board's position was that it undervalued the company. Since the takeover rejection the Coles share price has slowly risen to $14.70.
As far as valuing the company, it is currently sitting on a PE of 23 with a PEG ratio of 2.28. These are fairly high but are lower than its major competitor Woolworths Limited (ASX:WOW) which sits on a PE of 26. Analysts expect Woolworths to make a gain of 30% on its EPS in the next two years while they are expecting Coles Group to make a gain of 31%. Based on these figures you have to think that Coles is slightly underpriced to its major competitor but is still overpriced based on conventional fundamental techniques.
I suspect analysts are expecting Coles and Woolworths to continue to make profits from the alcohol and petrol stores. They may also be gaining a slight market share from some independent grocers. They could also expect that the companies might get into the pharmacy business which could offer a large growth area. Inflation might also add 4%-5% to the EPS but truthfully I think these estimates are too high. Yes Coles and Woolworths are good companies but you need to get them at a much lower PE ratio if you expect to make a good gain ( double figures in percentage points) you need to get them at a reasonable price.
Good Luck Investing.
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