Category — Miscellaneous Stocks
In the last five years, the uranium sector has had more false starts than a frog race.
And uranium stocks have left a long list of burnt shareholders in their wake.
But now it looks like investors are gearing up to roll the dice one more time.
Beaten up uranium stocks have soared in the last few days.
For example, Australia’s leading uranium stock, Paladin (ASX: PDN), once trading at $10, was down as low as just 76 cents last month. But in the space of a week, Paladin has jumped 37.1%
It’s a similar tale from Energy Resources of Australia (ASX: ERA). After spending the last three years falling 96% from $26 to just $1.10, it has just jumped 20.3% in the space of a week. [Read more →]
December 21, 2012 Comments Off
China is a currency manipulator – and everybody knows it.
But the news this week was that the US Treasury said China wasn’t a currency manipulator. That’s nice. But who are they kidding?
It’s no secret that China loosely pegs its currency, the renminbi (RMB), to the US dollar and manages its value at the direction of the Politburo and the People’s Bank of China (PBoC). China’s hardly alone in the world in being guilty of distorting the market. But things are changing fast…
And so a cheap renminbi has been one of the key drivers of China’s economic growth. But one of the effects of the peg is that the US runs an enormous trade deficit. The flip side of this is that China runs an enormous trade surplus. [Read more →]
December 3, 2012 Comments Off
The last three years have been a rotten time for Aussie retailers.
Sales are down.
Shoppers are buying stuff online.
Some retailers are even going bust – the Darrell Lea chocolate stores are a recent example.
And according to a report on Finance News Network:
‘Gerry Harvey has warned the first half of next year is going to be extremely difficult for retailers. [He] says while hot weather could provide a boost to Christmas sales he has never seen as many retailers under pressure over his 50 years in the industry. Mr Harvey has also cautioned many retailers are at risk of going bust in the New Year but vowed Harvey Norman Holdings will hold up to be the last man standing.’
Things don’t look good for the Aussie economy. Must be time to pack your bags and sell out, right? Maybe not…
We’ll admit we’ve given Gerry Harvey a hard time in the past. And we still believe the Harvey Norman [ASX: HVN] franchise business is a business model from the 1970s-1990s…a business model that’s looking out-dated.
Now, that’s not to say the Harvey Norman business can’t make a comeback, because it could.
In fact, we included Harvey Norman in our ‘Five Stocks to Buy’ report a few months ago. And we still think those five stocks are a good starting point for anyone who wants to set up a new stock portfolio.
The full list of the ‘Five Stocks to Buy’ is:
- Harvey Norman Holdings Ltd [ASX: HVN]
- JB Hi-Fi Ltd [ASX: JBH]
- Myer Holdings Ltd [ASX: MYR]
- Qantas Airways Ltd [ASX: QAN]
- Toll Holdings Ltd [ASX: TOL]
So, how are those stocks doing since we ‘tipped’ them on 20 June? They’re doing OK. They’re big beaten-down blue-chip stocks, so we didn’t expect fireworks.
But since 20 June (taking into account dividends) Harvey Norman is down 2.1%, JB Hi-Fi is up 19.7%, Myer is up 27.8%, Qantas is up 15.1%, and Toll is up 8.5%.
That’s an average gain of 13.8%…almost twice the gain of the ASX/S&P 200?s gain of 7.4% since 20 June.
The point is these were some of the Aussie market’s most beaten down stocks. Quite frankly these stocks are still beaten down, and would still make a good starting point for people building a new share portfolio.
And that brings me to the single most important key to investing…
Not ‘Any’ Stocks
Notice we say ‘good’ stocks. We don’t say any stocks. That’s an important point because there are plenty of bad stocks lingering at the bottom of the ASX.
And sometimes it’s hard to know which stocks are good and which are bad. But if you put in enough research, analysis and due diligence, it can improve your odds.
You won’t get every stock pick right every the time – that’s impossible – but doing some research helps.
Then there’s the issue of the returns you’re after. Some bottom-dwelling stocks may only give you a 10-20% return. Other bottom-dwellers may give you a triple-digit gain.
The difference in returns comes down to the risk you’re prepared to take.
If you want big triple-digit gains then you’ll look for the small-cap stocks with the biggest potential gain. Those are the stocks we mostly look for.
But as we mentioned above, the ’5 Stocks to Buy’ are all beaten down blue-chip stocks. They’re established businesses with good cash flows, and some of them remained profitable despite the falling stock price.
That was the theme of the stocks we looked at in the latest issue ofAustralian Small-Cap Investigator…
But there were two particular stocks that we figured have the best risk/reward profile. That is they’re stocks that really could go bust if they can’t turnaround the business…on the flipside we’re looking at gains of 230% and 294% if management can bring these firms back from the brink.
You may think we’re crazy for backing these two stocks if you knew what they are. And we’ll admit they don’t fit the usual mould of our small-cap stock tips. As we wrote in the November issue:
‘…it would be hard to call either company innovative or entrepreneurial.
‘In fat, I’ll admit that both of these firms are the exact opposite of what I usually look for in a speculative small-cap stock.’
In short, take notice of Gerry Harvey. He’s been in the retail business for 50 years, so he’s got a pretty good idea about how the industry works.
So when Mr Harvey says the retail sector is on the brink, we’re prepared to believe it. But we know something else too. While some retail businesses will fail, most won’t. The High Street and shopping malls will still exist.
What you need to figure out as an investor in retail stocks is which companies will survive. Those are the ones to invest in.
It’s a pretty big risk, but because of the potential reward, it’s worth it.
Four of the five stocks in the ’5 Stocks to Buy’ list have made good gains after most investors mistakenly thought the companies were in bad shape. We believe most investors have made the same mistake with the two stocks we’ve just tipped.
This article is contributed by Money Morning. Click Here to Subscribe to their free newsletter.
November 29, 2012 Comments Off
Here is the latest Mayne Report contributed by Stephen Mayne of www.maynereport.com. Stephen regularly writes the Mayne Report. We highly recommend that you subscribe for his very informative newsletter. Click Here to subscribe or to view the full report..
News Corp AGM, Billabong, Cochlear, Woolies EGM, corporate voting, Doyle, cheese platters, Manningham and Boomers.
Dear 16,000+ Mayne Report readers,
The AGM season and Victorian council elections are both peaking right now so there’s plenty going on to warrant another missive 6 days after last Sunday’s bumper edition. If you’re not interested, click here to unsubscribe.
News Corp AGM
It wasn’t exactly in accord with ASA policy of being ready 14 days before the AGM, but this comprehensive News Corp Voting Intentions report was finally loaded up onto the ASA website at about 3am on Tuesday morning, 25 hours before Rupert fronted shareholders in Los Angeles.
It took about three hours to put together so do take a look. The data tracking the $360 million in salary paid to the Murdoch men over the past 13 years has never been put together before.
Paul Barry attended the AGM and filed for Crikey, but declined my invitation to be ASA’s proxy on the basis that he was an independent journalist.
Yes, and ASA is proudly independent too. Paul’s Crikey piece lamented the lack of tough questions at the AGM. Indeed Paul, you flew all the way from France to LA and then declined an opportunity to put the world’s most powerful bloke through his paces. His AGM report could have been just as easily written off the webcast.
The News Corp voting results were very interesting with clear majority support from the neutral shareholders for an independent chair and an end to the outrageous voting gerrymander. [Read more →]
October 22, 2012 Comments Off
Which way should you turn?
US stocks are near a four-year high.
Australian stocks have jumped nearly 10% in just three months.
And gold is climbing back towards the magic USD$1,700 level again.
So, what should you do? Isn’t it a good thing when stock prices go up?
Isn’t that a sign that things are on the mend? [Read more →]
August 25, 2012 Comments Off
Owning gold stocks over the last 12 months hasn’t exactly been a barrel of laughs.
Nearly every gold stock on the ASX has taken a big hit.
So-called ‘blue chips’ have been smashed. Newcrest (ASX:NCM) has fallen 36.7% in a year. Another Aussie heavyweight, Alacer Gold (ASX:AQG), has lost 43%. And midcap producers have fared even worse, like Ramelius (ASX:RMS) losing 66%.
Gold explorers have copped it even harder. The one-time market darling Ampella (ASX:AMX) has crashed a gut-wrenching 79.1% in the space of a year.
August 16, 2012 Comments Off
It has been a tough start to the year for most investors.
Since 1 January, the Aussie market has gained 5.4%.
That’s not bad. But it’s not great either. And with all the volatility we’ve seen so far this year, there’s a better than even chance of the market taking back those gains before the year is out.
But there is some consolation. If you’re feeling bad about your lack of stock market gains, you can take some comfort that you’re not alone.
In fact, one billionaire’s hedge fund has lost 18%…despite the US S&P 500 gaining a whopping 10.9% since the start of the year.
The message for investors is this – it doesn’t matter whether you’re a big investor or a small investor, the market is as risky as heck. That’s why it pays to develop and stick to a simple portfolio asset distribution system… [Read more →]
August 8, 2012 Comments Off
This week will go down as another where the market is driven by central bankers rather than company fundamentals.
So as a stock picker, we’re stuck between feelings of frustration and opportunism.
Frustration that policy makers and central bankers can’t just get out of the way and let the free market run its course. Opportunism because we see stocks trading at bargain-basement prices.
In fact, for this month’s Australian Small-Cap Investigator, we’ve foundfour stocks we’d like to tip. But with only limited time to research them before our deadline, we’ll probably have to hold two of those stocks over for next month.
June 20, 2012 Comments Off
‘We estimate that an area of just one square kilometer [0.39 square mile], surrounding one of the sampling sites, could provide one-fifth of the current annual world consumption of these elements.’ – Yasuhiro Kato, Tokyo University, The Wall Street Journal
We’ll come back to this quote in a moment.
Today, We’ll talk to you about risk and return.
If you want to be successful in this game and make a lot of money, it’s important you understand it. But it’s also important you understand what effects risk and return.
The payoff for taking a bigger risk is the chance for a greater reward. For adrenaline junkies, chess is a low-risk activity. It won’t get their blood pumping, but they’re also not likely to get injured.
On the other hand, sky diving is high risk. Jumping from a plane at 15,000 feet is sure to set anyone’s pulse going. But the flipside of the thrill is, when compared to chess, there’s a higher risk of an accident.
But some people take the risk because they enjoy the reward – the thrill…the rush. [Read more →]
June 18, 2012 Comments Off
We’ll be honest. This falling stock market has us licking our lips.
The S&P/ASX 200 has dropped 6.2% in two weeks.
And yesterday the index had its first 100-point fall since 3 October last year.
The ASX Emerging Companies index has done even worse. It has dropped 17.1% in seven weeks.
May 17, 2012 Comments Off