# Value stocks



## blaze87 (26 September 2007)

hi guys, 
I identified some value stocks but would likes some insight..
JHX
BOL
TIM
SHV

All of the above stocks are considered cheap and good long-term buy(in my opinion), however they seem to be on a general downward trend. Any ideas on their turnabouts?

In addition,
PPT
SUN
SRV
AIO
are looking good any ideas on these???

Thanks


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## Joe Blow (26 September 2007)

At the moment, without any detail to support your view, this looks like a bit of a ramp.

Perhaps you could run us through each one and explain in some more detail why you believe them to be "value" stocks.


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## ta2693 (26 September 2007)

Hi Mate. 
Frankly speaking I do not like any of the shares you mentioned. 
None of the them are the leader of their industry.
They are all very weak recently.
No sign of any insiders are buying.

But ppl can have different idea on investing.
you must have your own reasons to believe it is undervalued which i am very curious about.


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## blaze87 (26 September 2007)

yea i will go into some detail...
SHV- largest almond grower ,exports 40% of its production to India, Japan, China, Thailand, Germany, Spain, United Kingdom, United Arab Emirates, and Italy.
possible cause of downtrend-- drought? tax laws?
however roe and roc of ShV are above 20% for the past 5 yrs. 2 different directors of SHV in the month of sep 2007 have been buying shares of SHV. 10 yrs earnings at 18%(growth), 5 yrs earnings at 22.8%. 1 yr earnigns at -9.5% with negative 1 yr cash flow of -13.7%. analysts from AUSTOCK LIMITED, E.L. & C. BAILLIEU STOCKBROKING LTD., GOLDMAN SACHS JB WERE, FORESIGHT SECURITIES are recommending a SELLon avg.

JHX- dominaint player in building materials. 

possible cause of downtrend- subprime, recession fears
ROE and ROC > 20% for past 5 yrs. 1 director paying $4000(which is much, but still...) for at 24th of aug for shares of jhx.
10yr earnings of 20%. 10 yrs negative cashflow of 180%
Debt/Equity Ratio of 0.85.
12 analysts from CREDIT SUISSE - AUSTRALIA, GOLDMAN SACHS JB WERE, JPMORGAN, MACQUARIE RESEARCH EQUITIES, ABN AMRO, CITIGROUP, SHAW STOCKBROKING LTD, SOUTHERN CROSS EQUITIES LTD., DEUTSCHE BANK SECURITIES, E.L. & C. BAILLIEU STOCKBROKING LTD., MERRILL LYNCH (INTERNATIONAL RESEARCH), UBS recommending BUY. 
currently trading on 5yr lowest P/E ratio...
there is too much.. to type..
but i think the main similarities for the companies are that their stocks were hit badly by subprime debacle. but most of them have a 'moat' with strong past earnings and relatively low debt. However their stocks are still going south... which is GOOD(for me, a vaule investor), but it would be nice to gain new insight...


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## FUTUREFUND (26 September 2007)

Blaze87,

JHX Aligned very much to US consider the building and housing figures, the sub prime saga not over still more to come.

BOL Revised profit downgrade due to bad weather, in the right sector and it does seem to have been oversold.



YOU CAN LISTEN TO EVERYONE BUT DYOR


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## Ken (26 September 2007)

BOL have the integration of their aquisitions.

The weather played a major part in their downside.

The 2nd was the profit downgrade.

The yield is not spectacular.

I am Back in on the next down day.  

I am prepared to take the 3 year view on BOL that they ride this mining boom, for the pure and simple fact that MND UGL, and other stocks like LEI have done so.

BOL is well positioned.

JHX imagine US housing recovers......

TIM - bit like GTP aren't they?

AIO - isnt that the old Patricks?

MY stock picking lately has been good since August. But who's hasn't????

The key is to get the stocks that will continue....

MMS, MCU,  are two i hold. and were mentioned in smart investor magazine.

But theres so many stocks. Its very easy to pump stocks up when the market is kicking goals. Different story when theres lots of red.


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## brilliantmichael (27 September 2007)

The only ones I'm familiar with are BOL and SHV. Disclosure: I own some SHV.

BOL, as above:
Poor weather for year (or in Mr.B's words: "_The cheque got lost in the mail _ ") Shouldn't have any long term impact, and if I had cash to spare I'd be considering BOL. But I don't know much about the dynamics of the construction business so... But from what I can see its P/E's are much lower than the rest of the industry such as Coates Hire or the massive Leightons (which is overpriced atm I think). If you're looking to get into construction BOL might be a good place to start. Good contrarian play too in my opinion. But that's just my opinion of course, since I've only ever seen one BoomLogistics uniform the whole year :

Now, SHV. I do not claim to know much about the agricultural industry, or how the drought is affecting the separate microeconomies in the Murray-Darling. What I _can_ say about SHV (and which anybody can just tell by reading their website) is that they are one of the strongest (financially at least) players in the agricultural sector. But here's the catch: SHV isn't really a farm or produce owner - it's a produce _harvester and processor_. Timbercorp outsources some of their operations and plantations management to Select Harvests, which is responsible for _managing_ things like logistics and water supply. Plus it has diversified into other 'non-farming' activities like food processing (dried fruit, nuts etc) and food marketing (which is a little out of their depth imo). Of course they're still ultimately based on the survival of the agricultural industry. But they're certainly one of the strongest in my opinion.

More recent factors regarding SHV:
- Director purchases/options exercises recently have been encouraging.
- Share buyback program has been going on for about a year now and has taken more than 1 million shares off the market, leaving the outstanding shares at less than 38 million from last count.
- Share price plummetting > helps buybacks even more.
- Strong dividend record.
- Flat forecasts (short-medium term, due to drought. Longer term more positive)
- Drought won't last forever. And when it breaks, will you be there to catch the wave?

There's my speculative  (Or sales pitch depending on your perspective  )

-----

"_Many shall be restored that now are fallen and many
Shall fall that now are in honour_"
                                                     Horace


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## Buffettology (27 September 2007)

Buffetologist right there, though Im not sure about the branding of some of these companies!  

I like BOL also, though I am a bit concerned about global warming, and its future impact on these sort of companies, with worse storms expected!  This is another reason I steer well clear of the insurance industry!

SHV, my valuation, $5.80

I currently have no good undervalued companies, just have to wait for one to come up!  

Dont mind the price of JST still and I think EQN is very good for the long-term.  Apart from this, I am struggling at the moment to come up with well priced, stable, long-term growth companies as I beleive most of the good companies in the market are overvalued.  Though, watch BKL, any fall in price near $20 is not a bad price.  This happened just a little while back.  

ZRL if you want risk and a short position.


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## Buffettology (27 September 2007)

Oh another company you might want to keep your eye on, which I just saw went up nearly 10% today, but I still have it undervalued, is DEX.  My valuation $2.71.  Good, stable, long-run company with great results since listing.  Dex is one I have had my eye on for a while and just took it off lately, which I probably shouldnt, because I would have bought had I seen just how low the price had fell!  When I last valued it, DEX was around $2.90 I beleive.  Overvalued.  

BTW, just FYI, I currently hold SDG, JST and EQN.


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## brilliantmichael (27 September 2007)

buffettology said:
			
		

> Though, watch BKL, any fall in price near $20 is not a bad price.  This happened just a little while back.




Oh I agree about BKL. That baby is a beauty. You won't get many more solid little gems than BKL. No explanation required. $20 still too expensive though imo. I doubt its price would go down anytime soon, unless it faced some sort of major crisis, since (from the chart trajectory) it appears it's got a pretty loyal shareholder following. It'd take something really crazy to knock this baby off its pedestal.


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## Buffettology (28 September 2007)

brilliantmichael said:


> Oh I agree about BKL. That baby is a beauty. You won't get many more solid little gems than BKL. No explanation required. $20 still too expensive though imo. I doubt its price would go down anytime soon, unless it faced some sort of major crisis, since (from the chart trajectory) it appears it's got a pretty loyal shareholder following. It'd take something really crazy to knock this baby off its pedestal.




I value BKL around $16.  Any stock in a bullmarket usually trades anywhere form fair valuation to double that.  As I think BKL is a very solid company, unless we have a MAJOR CRASH, I dont see this falling to fair valuation.  $20 is a phsycological barrier and hence, I think is a very good price, considering this stock could push anywhere up towards the mid $20s without much trouble as it has done before.  

International expansion, especially Taiwan at this point, give this stock some great growth opportunities, something that is limiting stocks such as TRS, JBH and WOW into the future (for value investors who expect to hold these stocks for many years).


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## rhen (28 September 2007)

I guess it's all in the way one values shares. Haven't observed any value shares listed herein today. Suggest you pass the slide rule over MFS for value. Check out the directors and their interest in MFS. Its chart is not bad either.
I own some shares (naturally based on reasons including the above).
rhen


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## Julia (28 September 2007)

rhen said:


> I guess it's all in the way one values shares. Haven't observed any value shares listed herein today. Suggest you pass the slide rule over MFS for value. Check out the directors and their interest in MFS. Its chart is not bad either.
> I own some shares (naturally based on reasons including the above).
> rhen




You think the chart is not bad?  It's only worth marginally more now than it was a year ago!  I hold this and it's the worst performer in my p/f.
It has a pretty good yield and now that it's gone ex-dividend I'll be selling it.
I don't know how you value shares and am absolutely not being critical, but imo you can have the best company in the world but if market sentiment is against it you're simply not going to make money.


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## CanOz (28 September 2007)

Julia said:


> You think the chart is not bad?  It's only worth marginally more now than it was a year ago!  I hold this and it's the worst performer in my p/f.
> It has a pretty good yield and now that it's gone ex-dividend I'll be selling it.
> I don't know how you value shares and am absolutely not being critical, but imo you can have the best company in the world but if market sentiment is against it you're simply not going to make money.




Hmmmm, depends on who's buying from those selling and in what volumes really. What if those selling are weaker holders, and those buying are accumulating, creating a range in price action, smaller waves of buying overwhelming selling and visa versa.....look into the volume.

And speaking of sentiment, how many others are saying the same as you...."its the worst performer in my portfolio".....time to be contrarian?

Food for thought anyway.

Cheers,


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## rhen (28 September 2007)

Julia said:


> You think the chart is not bad?  It's only worth marginally more now than it was a year ago!  I hold this and it's the worst performer in my p/f.
> It has a pretty good yield and now that it's gone ex-dividend I'll be selling it.
> I don't know how you value shares and am absolutely not being critical, but imo you can have the best company in the world but if market sentiment is against it you're simply not going to make money.




G'day Julia
Sorry to hear you were not happy with this investment.
Like to suggest:
1. that I am talking about MFS at this point in time, and that the chart is worth watching now for a buy opportunity.
2. that a valuation of $4.92 (C $4.69) is made by people who are more astute at this sort of thing than I.
3. that a year ago MFS was around $4 (give or take). My chart also tells me that there were definite selling points after (according to my simple analysis). One was at ca $5 (ie $1 in 6 months which is 50%pa rivkin) and the other around $5.90 ($1.90 in 9 months, 63% rivkin). (I can forward you the chart)
4. that you sell MFS for better reasons.
5. that i'm impressed with your selection criteria if MFS is your worst performer.
6. that, yes, market sentiment is very important...but remember why we buy value shares?
best regards,
rhen


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## Julia (1 October 2007)

CanOz said:


> Hmmmm, depends on who's buying from those selling and in what volumes really. What if those selling are weaker holders, and those buying are accumulating, creating a range in price action, smaller waves of buying overwhelming selling and visa versa.....look into the volume.
> 
> And speaking of sentiment, how many others are saying the same as you...."its the worst performer in my portfolio".....time to be contrarian?
> 
> ...



Fair enough.  I suppose I'm not what you'd term a "value investor" then.


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## Julia (1 October 2007)

rhen said:


> G'day Julia
> Sorry to hear you were not happy with this investment.
> Like to suggest:
> 1. that I am talking about MFS at this point in time, and that the chart is worth watching now for a buy opportunity.
> ...



Hello rhen,
As I have said above, I guess I'm not a value investor.
Re your point 3. I'm not sure that it's valid to take a result over 6 months and annualise it and suggest that that is a measure of performance.

All I was originally suggesting is that presumably we're all in the market to make money and there are other companies out there which are showing much better growth.  

Good luck.  If you buy MFS I hope it performs really well for you.


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## michael_selway (1 October 2007)

Buffettology said:


> Buffetologist right there, though Im not sure about the branding of some of these companies!
> 
> I like BOL also, though I am a bit concerned about global warming, and its future impact on these sort of companies, with worse storms expected!  This is another reason I steer well clear of the insurance industry!
> 
> ...




Hi Buffet, whats your valuation on EQN? It does have good forward numbers it appears

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 104.1 117.6 122.8 135.2 
DPS 81.0 92.8 97.0 106.7 *

thx

MS


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## michael_selway (1 October 2007)

Julia said:


> Hello rhen,
> As I have said above, I guess I'm not a value investor.
> Re your point 3. I'm not sure that it's valid to take a result over 6 months and annualise it and suggest that that is a measure of performance.
> 
> ...




Hi Julie, all financials took a hit recently i.e. MBL, BNB, AFG, MFS etc

You didnt buy at the MFS peak right?

*MFS - Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 53.1 45.3 55.4 63.3 
DPS 28.0 30.0 33.0 38.0 *

*AFG - Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 63.9 78.6 92.7 106.2 
DPS 44.0 44.0 46.5 52.0 *

*MBL - Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 569.8 662.9 651.9 717.6 
DPS 315.0 364.0 374.5 402.5 *

*BNB - Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 115.4 164.9 189.3 206.2 
DPS 36.0 51.0 59.3 65.2 *

thx

MS


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## Buffettology (1 October 2007)

michael_selway said:


> Hi Buffet, whats your valuation on EQN? It does have good forward numbers it appears
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




Hi Michael,

I currently cannot value EQN.  It is just too complex at the moment and the risk factor makes it unstable.  IF they do start to produce what they are supposed too and with their uranium stocks, I could see them adding another 70-80% to their stock value over the next 2-3 years.  That to me, is a GREAT return!  Until they do get mining underway and everything goes to plan, I cant place a valuation on it.  A bit of risk, but some great medium term gains.


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## Julia (1 October 2007)

michael_selway said:


> Hi Julie, all financials took a hit recently i.e. MBL, BNB, AFG, MFS etc
> 
> You didnt buy at the MFS peak right?
> 
> ...



Hello Michael

All the above mean little to me if my capital isn't growing.  Yes, I did OK with MFS for a while but not any more.  So I simply prefer to swap it for something which is showing much better growth.  Not exactly rocket science!


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## michael_selway (1 October 2007)

Buffettology said:


> Hi Michael,
> 
> I currently cannot value EQN.  It is just too complex at the moment and the risk factor makes it unstable.  IF they do start to produce what they are supposed too and with their uranium stocks, I could see them adding another 70-80% to their stock value over the next 2-3 years.  That to me, is a GREAT return!  Until they do get mining underway and everything goes to plan, I cant place a valuation on it.  A bit of risk, but some great medium term gains.




Oh ok, actually i posted wrong data above, below is the correct one

*EQN - Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -6.8 -6.3 45.1 128.5 
DPS 0.0 0.0 0.0 30.9 *

What kind of risks do you see them having mainly?

thx

MS


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## michael_selway (1 October 2007)

Julia said:


> Hello Michael
> 
> All the above mean little to me if my capital isn't growing.  Yes, I did OK with MFS for a while but not any more.  So I simply prefer to swap it for something which is showing much better growth.  Not exactly rocket science!




Hi Julia, do you still have AFG then ?

thx

MS


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## Julia (1 October 2007)

michael_selway said:


> Hi Julia, do you still have AFG then ?
> 
> thx
> 
> MS




No.


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## Buffettology (2 October 2007)

michael_selway said:


> Oh ok, actually i posted wrong data above, below is the correct one
> 
> *EQN - Earnings and Dividends Forecast (cents per share)
> 2006 2007 2008 2009
> ...




Construction delays, capital cost blowouts, operating cost pressures and sovereign issues are the ones that come to mind, along with changes in spot prices from now, to the time mining actually gets underway.  Risks in the Chinese economy for example, with their reporting of economic indicators potentially bogus, would have dramatic ramifications on spot prices of copper!  I have read many reports argueing why NOT to take long-term positions on copper.  

That being said, I read that Lumwana is being produced on a fixed cost, fixed time contract.  So that does mitigate some risk.

Yeh, I noticed you posted the wrong data, though EPS growth is constantly being revalued.


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## wbooo (8 October 2007)

jAMES HARDIE IS RELIANT ON THE BUILDING INDUSTRY WHICH IS HEADED DOWN, bol HAS 80% DEBT/EQUITY, 70M DEBT PAYABLE THIS FINANCIAL YEAR WITH ONLY 66M RECEIVABLES AND 9M IN BANK.  aLSO HASN'T BEEN AROUND LONG ENOUGH TO KNOW WHETHER IT CAN SURVIVE A RECESSION.


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## Gar (8 October 2007)

wbooo said:


> jAMES HARDIE IS RELIANT ON THE BUILDING INDUSTRY WHICH IS HEADED DOWN, bol HAS 80% DEBT/EQUITY, 70M DEBT PAYABLE THIS FINANCIAL YEAR WITH ONLY 66M RECEIVABLES AND 9M IN BANK.  aLSO HASN'T BEEN AROUND LONG ENOUGH TO KNOW WHETHER IT CAN SURVIVE A RECESSION.




I dont know how you managed to type that entire post without realizing the caps was on


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## Buffettology (8 October 2007)

wbooo said:


> jAMES HARDIE IS RELIANT ON THE BUILDING INDUSTRY WHICH IS HEADED DOWN, bol HAS 80% DEBT/EQUITY, 70M DEBT PAYABLE THIS FINANCIAL YEAR WITH ONLY 66M RECEIVABLES AND 9M IN BANK.  aLSO HASN'T BEEN AROUND LONG ENOUGH TO KNOW WHETHER IT CAN SURVIVE A RECESSION.




Also, remember not to look too much into debt/equity.

Look more about net profit for the year, in relation to growth and debt.

If debt to equity is 100%, but debt is 50mil and profit 20mil (with some great growth expected), then you really have no worry.


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## Rainmaker2000 (8 October 2007)

Buffettology, would you mind enlightening us as to how you do your stock valuation cause I'm just trying to find the Buffet aspect of it.......first of all, you seem very fond of someting like a price target which does not seem very Buffet after all..but more like a young financial planner I used to play tennis with who lost his clients money, for example, Select Harvests is worth $5.80 according to you but Just Group, another of my favourites, is still good value ironically at about $5.30.....don't I feel like a fu**en As**ole since recently I sold JST and bought SHV..hehehe...ofcourse I justified the call on JST being valued on a PE of about 20 at what may well be a cyclical high, while the valuation of SHV was valued at a PE of round 10 at what appears to be a cyclical low........how the hell does one value SHV at $5.80 which equates to a PE of bout 8 and a dividend yeild, wait for it, of round 11%........furthermore, on an asset level, SHV has more tangible assets than JST which likes a bit of debt and is very exposed to interest rates and consumer spending


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## brilliantmichael (8 October 2007)

Hi Rainmaker. From the looks of your post you sound a little bothered that you sold out of an issue that rose, and bought into one that fell. Speaking with the buffettologist's hat on, I'd just like to put out a few reminders for us about that:


Buffett never cares about where the share price goes in the near term.
While MrB may take advantage of price movements, he doesn't make his strategy depend on it (i.e. he always has a "Plan B" to stick out any short term fluctuations)
SHV (I would assume) is a 'general' play, in that it's a semi-long term holding. Whether it goes down or not in the next few months shouldn't really matter.
If you're really (and I mean seriously really!) convinced you bought into value, you shouldn't be letting MrMarket dictate whether you've made a good decision or not. A decision is good or bad depending on whether the business is good or not for the amount you paid for it (whether SHV fits the bill is another debate)

I don't believe even the so called "Buffett method" is infallible (or entirely encapsulated in the more well-known books, and there are some aspects of Buffett's so called advice that I would have some questions about related to small investors), and don't wish to be seen as a "Buffett-cultist" (in Charlie Munger's words), but _it is still the best method around i.m.o. for investors not wanting to grow itchy trigger fingers_.

JST is a great issue too (great financials), and a good medium term pick i.m.o. (only medium since I don't think the business has much "moat" against other stores). For the right price it would be attractive. Why did you sell out of it though? It's going pretty well atm and would certainly be worth keeping as long as the business is maintaining its momentum.

SHV however has a guaranteed annuity stream from its established MIS's, and a large crop in the midst of production (drought effects notwithstanding). Which is better among either is a bit hard to say, but a.t.m. JST is overpriced in my opinion, and SHV just possesses a more compelling case a.t.m. due to its price/cash flows.


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## Rainmaker2000 (9 October 2007)

Thanks for your post BrilliantMichael........I'm afraid my sense of humour didn't translate......I'm very happy to exit JST at this time no matter how high the price goes.....I've held JST since the day after it floated when everybody thought it would tank and was happy to realise such a gain with it being slightly overvalued and sentiment well and truly turned and me needed gains to offset my losses in starting a retail business..........I'm as thrilled to own SHV as Just in 2004 and after doing many hours of research may yet load up heavily.......Just on Buffet, I'm very much a fan of his record, but when it comes to theory, I prefer the guys Buffet learnt from, Benjamin Graham and Phillip Fisher.....with Fisher's growth method being my principle influence....I just love the market and especially the theory


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## Buffettology (9 October 2007)

My method of stock valuation is based loosly on Buffettology.  I also adapted my own touch on it as MrB valuation is first based on 10 year historical figures.  In Australia, many companies (JST) for example have not been around that long and many stocks have not performed well over that entire timeframe, so based on current prices, and historical 10 year average ROE, you cannot depict a good indicator of future growth IMHO.  This is why I look at past ROE, as well as future expected growth.  

I look at the industry, the company specifically (including branding), the management, cash flow, debt levels, ROE, growth in EPS, share buy backs if they are in effect and then calculate my valuation.  Its usually done by taking equity per share, expected growth in that equity over the next several years and the number of years, convert that into a future value.  Then, using a return of 15% required, and the same time frame, I convert it back into a present value (realising most companies trade upto 2 times fair value).  Of course not fool proof, but nothing is. 

JST is not great value now, as to why I would have a hold recommendation.  Though, its still a long-run solid company IMHO and this is why I hold.  

So my methods while based on Buffettology and his general principles, are not EXACT!  

My trading has been very successful (both short-term and long-term) so think what you may, but to date, my methods have been very very successful and I have well and truly outperformed many other financial analysts at my work!  

Hope that young planner you used to play tennis with didnt burn you too!


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## Buffettology (9 October 2007)

Though Rainmaker, you are correct about the huge dividend SHV pays!  In my quick glance, I didnt even look at this.  It was a very quick valuation.  Great dividend right there!  Though, that is only a small factor in my investments.


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## blablabla (9 October 2007)

For my first posting on this website I'd like to give a mention in the "Value Stocks" thread to LRF, Linq Resources Fund, because its NTA is well above its SP.

Even after a good rise, yesterday's closing SP of $1.65 was still $0.25 below its NTA as at 28th Sept of $1.90.

Linq has recently switched to weekly reporting of NTA. The NTA as at 5th Oct should be announced on Friday 12th Oct.

Significant holdings in the LRF portfolio include such stellar performers as AGO, CUO, EQI, IGO, OEX, RIV and SDL.

An onmarket share buyback is currently in progress which is helping to push the SP upwards. A recent announcement substantially increased the number of shares planned to be bought back.

There is a small cloud on the horizon in that a hedge fund which is one of the major shareholders is trying to receive preferential treatment, but management seems to have the matter well under control. A shareholders meeting on 22nd Oct should remove the problem.

Anyone know any good reason why the SP of LRF never seems to get close to the NTA?


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## masterjunko (9 October 2007)

blablabla said:


> For my first posting on this website I'd like to give a mention in the "Value Stocks" thread to LRF, Linq Resources Fund, because its NTA is well above its SP.
> 
> Even after a good rise, yesterday's closing SP of $1.65 was still $0.25 below its NTA as at 28th Sept of $1.90.
> 
> ...




I too have shares in LRF. The share price trades at a discount to its NTA for a reason. And that reason is risk.
LRF invests in small mining companies, so it is quite understandable the risk is considered to be high.
I think the board has handled the unreasonable demand of that particular hedge fund very well.
Good to see the discount between SP and NTA is getting smaller. However don't expect them to meet.


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## Rainmaker2000 (9 October 2007)

Buffettology, its good that you look at many important valuation measures......my point, other than livening up the thread is its important that people don't get the impression that stockmarket is an exact science with price targets, and firm valuations.....as you point out, there are many ways of valuing a stock, although I have trouble figuring how SHV is worth 5.80 under any valuation except NTA...which I reckon JST may be negative on currently...hehe......my valuation of SHV would be closer to double its current market price but then I still respect that the price it ended today is indeed the price its 'worth' today......the wonderful thing about the stockmarket is that valuations are subjective but our results or performance is always objective.......great to hear you are doing better than my former tennis buddy who was always sounding me about the dodgy investments he was told to pass on to clients.....queries like: what do you think of MIG.......its not really a tough question to answer is it?


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## TheRage (21 November 2007)

Buffettology said:


> I value BKL around $16.




How did you come to such a valuation?

What IRR did you use for your calculation?


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## Ken (21 November 2007)

RRT has a NTA over $1.00 and is sitting on a yield of 14.5%.

It is trading at 75.5 cents so in theory it reaches its valuation and pays the dividend and your looking at a 40% gains.


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## prawn_86 (21 November 2007)

The problem with RRT is that its sells its assets in order to pay its dividends. (i am 90% sure).

I looked at getting into them earlier when their div was coming up, in the anticipation of a sp rise. the rise didnt eventuate and i didnt buy in thankfully


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## Awesomandy (22 November 2007)

prawn_86 said:


> The problem with RRT is that its sells its assets in order to pay its dividends. (i am 90% sure).




From what I know of, RRT refinances to pay its dividends. Well, good luck refinancing under the current climate.


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