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Speculative Stock Portfolio

Discussion in 'Medium/Long Term Investing' started by aus_trader, Jul 8, 2017.

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  1. aus_trader

    aus_trader

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    Since hitting 14c levels YOW has retraced significantly, tempting me to sell. But on this occasion I decided to give it a bit more room to fall further as the Trading Update released today suggest things are going OK. The turn-around is taking place slowly and they are reporting a small profit compared to a loss in the prior corresponding period(pcp):

    upload_2018-11-1_19-35-32.png
    Another interesting figure from the above slide is they have 19.5m cash and they have no debt. Market is valuing this company at around 21m (MCap), which suggests value assigned to the actual business is less than a mere 2m or so. Good gosh !
     
  2. aus_trader

    aus_trader

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    Simonds Group Ltd (SIO) was sold due to liquidity drying up. A huge gap of 32c - 40c roughly was present in the last few days which prompted me to get out so I put an order towards the top of the gap at 37.5c and eventually got filled.

    Closed Positions:
    upload_2018-11-9_0-52-11.png
     
  3. peter2

    peter2

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    Lack of liquidity has been a real problem for those of us trading medium term with tighter stops. While it's easy to buy, selling when I want can get tough at times when the bids dry up.

    The reduced daily traded values has reduced my ASX trading universe considerably. This and the fact that the index is dominated by two sectors has me looking towards the US markets.
     
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  4. aus_trader

    aus_trader

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    Precisely Peter, just can't get out at the price you want due to lack of liquidity. I have also reduced my trading frequency to conserve capital for the time being. In fact most of my activity has been selling down existing portfolio positions.
    I might also consider looking into the US market as well, more towards the more liquid well traded stocks
    to diversify from having just Aussie stocks.
     
  5. peter2

    peter2

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    There's a third reason for considering the US markets. Aust is currently politically unstable and has been for a decade. The US mid-term election results have hog-tied Trump and their economy is growing smoothly.
     
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  6. aus_trader

    aus_trader

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    Just in case the market continues higher from here without me, I thought to have a little more exposure since I've sold nearly the whole spec portfolio during the 10% drop in the overall market during September-October.

    So bought back Food Revolution Group Ltd (FOD) into the portfolio. Also there was a distribution deal announcement that could possibly push price higher:

    upload_2018-11-12_16-5-50.png

    Open Portfolio:
    upload_2018-11-12_16-6-18.png
     
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  7. aus_trader

    aus_trader

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    I thought the SLR/DRM merger announced yesterday might push the share prices higher for both stocks as a mid-tier larger gold producer when combined. But both companies have share prices going lower since the announcement.

    Silver Lake Resources Limited (SLR) sold from this portfolio, while this merger complication takes place.

    Closed Positions:
    upload_2018-11-15_15-20-29.png
     
  8. ezz

    ezz

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    Hey All,

    I've been out of the market for years. Have been keeping an eye on the asx with a bit of a correction occurring.

    Is anyone watching bank stocks. I know they are getting hammered with all the negative news from the Royal Commission, and the lending environment changing with lending conditions and current house climate.

    All the bank stocks have corrected dramatically. As a medium to long term investment does anyone see value in the Big 4.

    - They all have dividends paying above 6% to 8%
    - Relatively low PE ratios
    - All retracted approximately 20%-25% from this years highs

    I'm thinking of buying in seeing really good value here. Just wondering how far further they can drop? Looking at WBC a bit above 25.00 atm, div over 7% or will I be going in too early without any signs of a recovery. Any thoughts?

    Cheers
    Easy
     
  9. aus_trader

    aus_trader

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    Hi ezz,
    Just remember the major banks derive most of their revenue (used for dividend payments) from mortgage payments. So it's very dependent on the state of the economy. Since markets tend to be forward looking I wander if banks have fallen due to an expectation of a slowing economy. All is good now but I think the banks revenues will get hit if there are mortgage struggles with defaults etc.

    Since I have exposure to 1 financial stock (BFG) paying above 7% in dividends in this portfolio I am not looking to add the big banks etc as yet...
     
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  10. jjbinks

    jjbinks

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    Dividends may be high and PE maybe low now but earnings are likely to drop and probably not grow for several years due to royal commission and slowing of property market.
     
  11. sptrawler

    sptrawler

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    Are you trying to tell us, people will stop borrowing and start saving? That would be a novel experience for most.
     
  12. ezz

    ezz

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    I can see support at 25.00 where it's bounced off twice, up past 26.00 now. Anyone think it'll drop below 25?
     
  13. aus_trader

    aus_trader

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    That all depends on if the overall market downtrend continues. By the way WBC is in a downtrend on the daily chart. So unless the markets rally from here it's possible to re-test or break below the $25 level if this downtrend continues, just my opinion.
     
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  14. aus_trader

    aus_trader

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    Overall the stocks in the open portfolio are not doing well, being dragged down by the overall market. One exception is Food Revolution Group Ltd (FOD) which continues to have great news flow. Today executed a juice supply contract in China which came only a few days after the supply contract win with ALDI.
     
  15. ezz

    ezz

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    Fair call, I was thinking of buying in to one of the banks as a long term investment. Just watching to see if it would drop below to 25.00 and see if it continues its downtrend a little further.
     
  16. aus_trader

    aus_trader

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    I wish I could predict when the downtrend would stop and uptrend starts. Anyway WBC may be a better option than CBA since CBA is Australia's biggest holder of mortgage debt. Yes CBA earns the biggest slice of mortgage interest but could also be most susceptible if housing tumbles.
     
  17. ezz

    ezz

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    Had a buy order go through, 7.4% div at current price. Long term investment. Bit of a bloodbath today for the market and the banks. Hoping to see some reasonable steady improvement over the next 5 years.
    Just bought in today as a long term investment, pulled up an 18 year chart hoping to see a slow recovery over the next few years. Hard to go past 7.4% dividend, even if divs drop off a bit. I know market conditions, tighter lending standards, correction in housing prices are in play, hoping market price has factored these risks in and as that it has been slightly overplayed. Bloodbath today across the market.
     
  18. aus_trader

    aus_trader

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    Dividend yield is good, let's see how it goes...
     
  19. aus_trader

    aus_trader

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    Clean Seas Seafood Ltd (CSS) is going through a share consolidation at the moment. Code is changed to CSSDA temporarily.
     
  20. aus_trader

    aus_trader

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    Gold seems to be holding up well amongst the market decline we are seeing. The falls are coming from the financial sector mainly and I had to let go of my only holding exposed to this sector Bell Financial Group Ltd (BFG) this morning. It's a great stock with a fantastic yield but not comfortable holding in this market environment.

    Closed positions:
    upload_2018-12-10_21-33-54.png
     
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