Bargains appearing on the ASX?

Discussion in 'Stocks & Derivatives' started by finicky, May 18, 2012.

  1. finicky

    finicky Well-Known Member Silver Stacker

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    Always good businesses that will weather the likely storm and recover quickly. Find those ones at a significant discount to value, and don't put too much into one stock. If stocks get hit again, don't sell anything you have bought with confidence. Collect franked dividends, better than bank interest, while you wait for the recovery.

    An example:

    ARB Corp (ticker: ARP)

    If you had bought ARB Corp during the year leading up to the GFC, you would have almost certainly bought somewhere between $4.50 and $3.50. In the pits of the GFC, ARB Corp touched $2.50. During the years that contained the GFC (FY08, FY09), ARB Corp increased its earnings per share and dividends. Yield at the low of $2.50 was 6.6% ff

    In 8 months from the bottom of March 2009 the stock broke through its old pre GFC range, and went on to double its price in another 2.5 years. Each year it increased its dividend, including a massive special dividend in FY10.
     
  2. sprite

    sprite New Member

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    Hi finicky

    Thanks, always good to hear anothers advice, I do appreciate it, I have a trading strategy which has, rather like a dog, been very faithful for 15 years and I see no reason to change it now.

    My comments were directed to less experienced traders or investors.

    All the best with your trading :)
     
  3. finicky

    finicky Well-Known Member Silver Stacker

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    Since the above comment was posted, a couple of months ago, WOR has congested between 26 and 24. It's now looking like 24 is the support level and I'm favoring it to break rather than provide a bounce. With a downturn of the general market we could see WOR at around $20, I hope, where it will be more attractive to buy a first few.

    The dividend and the P/E are not all that attractive at the current price - yield 3.6% partially franked, P/E =17.
    Skaffold sees the actual intrinsic value at $18 but rising significantly in FY13 and FY14

    DECADE MONTHLY CHART
    [​IMG]
     
  4. finicky

    finicky Well-Known Member Silver Stacker

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    Just a few scrappy notes I took while watching an interesting session of Your Money Your call on Business Channel last night. Panelists were Chris Kimber, Ben Clark, and Rog Montgomery (Skaffold).

    None of them liked Kingsgate (KCN) of which I still hold a few. Ben reckons expect production problems at Chatree?

    Roger's 30 Sec pick was again Flight Centre (FLT) which has been posted on in this thread. After a good rise he still thinks it is cheap and doesn't think the market understands its model and prospects. Its international ambitions should see it much bigger.

    Both Roger and Ben made enticing comments regarding CSL Ltd (CSL) whichRoger reckons could be worth 3 or 4x its current value in 5 - 10 years. He again referred to it as a global 'blood miner' and said it is his fund's biggest current holding. Said it seldom gets to a discount but they never sell any and add on corrections.
    Ben likes the upside of their research projects and expects the equivalent of another Gardasil (for Human Papilloma Virus) down the track. One possibility is an Alzheimers therapy they're supposed to be working on that requires massive amounts of a globulin product

    Ben reckons the defensives are over cooked and he's already shifting some profits from those into counter-cyclical stocks. One idea he mentioned was Dulux (DLX) to take advantage of a recovery sometime in the building sector. Another contrarian idea mentioned was the Mining Services, with he and Roger seeming to agree on Monodelphus (MND) and Campbells Bros (CPB) as being the Roll Royces of the sector. Both agreed to wait for a bit lower prices on those and then practise patience. Ben pointed out that Campbells (CPB) is diversifying out of pure mining services in their labs.

    Wotif (WTF) - in answer to a viewer question Roger questioned the sustainability of Wotif's competitive advantage.

    Breville Group (BRG) - Roger thinks it will mean revert to a more normal ROE for the company with share price implication (i.e over cooked)
     
  5. finicky

    finicky Well-Known Member Silver Stacker

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    Getting unsettling for someone who wants to get into this stock. Everything's up today but FLT is looking ready to break above resistance in the $22.50 area. Really quite a perky looking chart. Main hope is that it's looking a bit too overbought to break through. A lot of high quality stocks are behaving as if there's no worries about the future at all. Not much to buy.

    [​IMG]
     

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