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Robusta fundamental, leveraged investments

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Most of the quality companies with history to back it up are still looking over-priced to me for what it's worth. I've been nibbling at a few smaller caps however. Wouldn't bet the house on it yet. Probably best to just average into position if you want to be cautious and not just snap at market falls.
 
Investment Increased

MTU - M2 Telecommunications

278 x MTU @ $2.66 = $739.48 (Converted renounceable rights offer)

Actually parted with the cash a bit over a week ago, shares were allocated today.

This makes MTU my largest holding at the moment with 1393 shares bought at a average price ~ $2.628.
 

Hmm, this one might be ok, after it makes a new recent low at 2.8 ish.

Well done.

CanOz
 

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robusta said:
Investment Sold

790 x MCE @ $2.00

Wow :nuts:
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Well done Robusta, cut that loss short.

A breakaway gap to the downside is never a bullish sight.

CanOz
 
CanOz said:
Well done Robusta, cut that loss short.

A breakaway gap to the downside is never a bullish sight.

CanOz
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Thanks, would have been a whole lot better if I didn't buy it in the first place however.

Lesson learned. I mean it this time.
 
Robusta - rather than clog up the GNG thread with talk about BKL I'll post here.

Just remember that BKL has fairly high debt-to-equity. I had a quick look at the half-yearly report. They also have other fixed costs such as leases. Care should probably be taken to see how much of a cash flow buffer they have if the proverbial hits the fan due to the European crisis. I am not sure what preferences you have for debt ratios, but I usually try to compare this to operating cash flow and will not proceed unless there is a big margin for error. A general observation from the past decade seems to be that BKL matches their debt/equity ratios to their earnings cycle. Since the GFC they seem to be reducing this percentage. Happy researching!
 
I'm new to the forum and just spent the last 3 hours going through Robusta's thread - what an enjoyable ride! I was laughing by the end when he entered MCE for the third time, almost like one of those old John Cleese management videos.

Hats off to you Robusta for putting your learnings out there for all of us to read, I must admit some cringing as I read with the benefit of hindsight.


A couple of suggestions for Robusta to consider:

(1) Be careful of following what Roger is spruiking, he is a Salesman first and foremost and not someone you should try to follow as an Investing guru.

(2) Decide if you really want to be a long-term value investor or trader - your personality does not seem the type to research and then buy with conviction for the long term (and I mean years). Nothing wrong with that, just know who you are so you maximise your own personality type

Finally, a Stock suggestion for you in return for the enjoyment you have given me.

Your thinking was sound on the overseas diversification and a LIC is a good way to do this. I suggest taking a long look at MFF as an alternative to PET - Long term value managers and a great portfolio of worldwide names. Look to pick it up when the discount to NTA is greater than 15% (20% is when I buy but I already have accumulated 150,000 shares). It is up about 30% this year which keeps me happy
 

I have it as never paying a dividend? and listed in 2006..im assuming a reinvestment of capital policy?

I've never had a good look at it because there was no dividend so it didn't met my LIC/Fund criteria.
 
Nice chart over a year I'll give it that!
 

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It hasn't paid a dividend yet, the managers report that they do intend to but have been waiting for some sort of clarification from the ATO before commencing. Not sure what the issue is.

To be honest, the lack of dividend hasn't worried me while the SP continues to move north. Note that they only invest in a small number (less than 20) of companies with long term growth characteristics (Yum!, Coca Cola, AMEX, ebay, Wells Fargo, China Mobile, etc) and are unhedged - a beautiful thing when buying at $1.10 and banking on the AUD to fall back to $0.80 eventuallly.

I jumped in back in December because I wanted significant O/S exposure, liked the LIC management style, it was unhedged and it was trading below its normal discount to NTA. And importantly compared to PET, it is reasonably liquid with 500,000 shares trading daily.
 

Believe it or not I have enjoyed the ride as well and I must admit I sometimes react a bit like Basil when backed into a corner


RottenValue said:
A couple of suggestions for Robusta to consider:

(1) Be careful of following what Roger is spruiking, he is a Salesman first and foremost and not someone you should try to follow as an Investing guru.
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Have learned that one the hard way, I still like the valuation method from the book but prefer to go my own way now


Maybe I don't convey it on this thread as you are not the first to suggest this but long-term value resonates with me.
This portfolio has been going for less than a year and has had a high turnover as I have been finding my way. I view COH, NVT, MTU, DTL, TGA and PET as long term core holdings. I would be very surprised if I am not holding at least four of them over the next five to ten years.


Thank you, I am not sure how I missed MFF, I still like PET but MFF is now on my watch list waiting for a opportunity to buy. I would be happy to hold both and have a larger exposure overseas.

Templeton came up on my radar when I was researching PET but MFF is preferable in my opinion.

RottenValue said:
It hasn't paid a dividend yet, the managers report that they do intend to but have been waiting for some sort of clarification from the ATO before commencing. Not sure what the issue is.
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Maybe because the performance bonus is linked to the NTA / share? This does not bother me as long as they are employing retained profits at a decent rate of return.
 
NEW INVESTMENT

SWL - Seymour Whyte Limited

Bought 1685 @ $1.18 = $1988.30
 
Klogg said:
May I ask why?
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Why he paid 18c to much? or why SWL?

----

SWL announced a 30% (Approx) profit downgrade and the share price falls 40+% ~ all things being equal SWL looks cheap at today's close of $1.015 but $1.18 looks a little impetuous.
 
So_Cynical said:
Why he paid 18c to much? or why SWL?

----

SWL announced a 30% (Approx) profit downgrade and the share price falls 40+% ~ all things being equal SWL looks cheap at today's close of $1.015 but $1.18 looks a little impetuous.
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Why do you say it looks cheap?
 
Ves said:
Why do you say it looks cheap?
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Profit fell 30% share price fell 40% = cheap.

I have a totally non "value" way of deciding what's cheap...like BPT the other week at 95c = cheap, i sold 4 days later for 1.10 proving that it was indeed "cheap" CKF cheap at 1.06 the subsequent price action (1.15) has proven that indeed it was cheap.

I could go on...but its not "value" so your not interested.
 
So_Cynical said:
Why he paid 18c to much? or why SWL?

----

SWL announced a 30% (Approx) profit downgrade and the share price falls 40+% ~ all things being equal SWL looks cheap at today's close of $1.015 but $1.18 looks a little impetuous.
Click to expand...

Sorry, should have said 'why did you chose to buy SWL'... I suppose why pay $1.18 is also a good question.

I don't know a great deal about the company, but given the profit downgrade and the order book, it doesn't look like the downgrade is a one off thing...

Just wanted to see what parts of Robusta's analysis led him to buy
 

I'm always interested in a different view - otherwise I'd be assuming my way is the only way... (value is the only thing that rings true to me though)

How did you come to the conclusion that on the basis of a 40%SP fall (vs 30% profit fall) it was cheap?
 
Klogg said:
How did you come to the conclusion that on the basis of a 40%SP fall (vs 30% profit fall) it was cheap?
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I must admit it was a quick conclusion...i find it hard to value service company's because they don't own anything and so much of their value is contract based.

I just feel that a soft (some of it accounting) 30% fall in profit doesn't warrant a 40% SP correction...in a bear market its almost always the negatives that get over done, often catching the bottom of the spike down will turn out to be a tremendous opportunity.

  • MC 79 mill
  • Cash 35 mill (approx)
  • Debt 9 mill (approx)

Looks cheap
 
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