The business news channels are stuffed full of people willing to give their opinions on where the economy is going, or how this company or that company's shares will do.
Of course, I think most of this is entertainment and hot air, but at the end of 2011 I was asked to submit a list of 12 stocks for 2012 and see how they did compared to a few other market commentators; a bit of friendly competition as it were.
So I picked the top 12 stocks from my screen and you can see the results so far in an article I posted earlier this week. I think they've done pretty well:
http://www.ukvalueinvestor.com/2012/06/share-tips-for-2012-half-time-review.html/
And this morning I have produced probably the best (i.e. the first) summary of my investment strategy and how it designed from the top down and bottom up to beat the market. You can read about it here:
http://www.ukvalueinvestor.com/2012/06/three-ways-to-profit-from-bear-markets.html/
And this week’s 5-star stock is…
Xstrata
As is typical with mining shares, these are not exactly ‘defensive’ investments. They need a thick skin and a strong nerve, not to mention wide diversification. That’s because the share price can move all over the place; in this case between 2,500p and almost 250p in less than a year, followed by a rebound to 800p today.
On the financial side, Xstrata is also less stable than I would typically prefer, but it has always been profitable and dividend paying, which is sometimes achievement enough. Growth has been fantastic, but this is a cyclical industry, so beware.
The stats at a price of 920p (it's now about 810p, so these will have improved) are:
In terms of consistency, I have a quantitative system which measures it at 7.8 out of 10, which is good despite somewhat volatile results.
Would I invest at current levels? That would depend on further analysis, but currently I only have one mining/commodity business in the portfolio, also in the FTSE 100, so it’s possible. I think this is certainly an interesting proposition to look over.
Have a nice weekend,
John Kingham
P.S. You can just reply to this email if you have a comment/question, I'll always respond.
Of course, I think most of this is entertainment and hot air, but at the end of 2011 I was asked to submit a list of 12 stocks for 2012 and see how they did compared to a few other market commentators; a bit of friendly competition as it were.
So I picked the top 12 stocks from my screen and you can see the results so far in an article I posted earlier this week. I think they've done pretty well:
http://www.ukvalueinvestor.com/2012/06/share-tips-for-2012-half-time-review.html/
And this morning I have produced probably the best (i.e. the first) summary of my investment strategy and how it designed from the top down and bottom up to beat the market. You can read about it here:
http://www.ukvalueinvestor.com/2012/06/three-ways-to-profit-from-bear-markets.html/
And this week’s 5-star stock is…
Xstrata
As is typical with mining shares, these are not exactly ‘defensive’ investments. They need a thick skin and a strong nerve, not to mention wide diversification. That’s because the share price can move all over the place; in this case between 2,500p and almost 250p in less than a year, followed by a rebound to 800p today.
On the financial side, Xstrata is also less stable than I would typically prefer, but it has always been profitable and dividend paying, which is sometimes achievement enough. Growth has been fantastic, but this is a cyclical industry, so beware.
The stats at a price of 920p (it's now about 810p, so these will have improved) are:
- PE10 = 10 (ratio of price to 10 year earnings average)
- 10 year EPS compound growth rate = 20%
- Yield = 3%
In terms of consistency, I have a quantitative system which measures it at 7.8 out of 10, which is good despite somewhat volatile results.
Would I invest at current levels? That would depend on further analysis, but currently I only have one mining/commodity business in the portfolio, also in the FTSE 100, so it’s possible. I think this is certainly an interesting proposition to look over.
Have a nice weekend,
John Kingham
P.S. You can just reply to this email if you have a comment/question, I'll always respond.
