Bargains Bargains Bargains

[mcgrath111]

Hi All,

Wanting to create a thread where you see value approaching or where a stock has been heavily discounted.
As of late the two stocks I saw value we're in VOC and MYX, however aside from that I've found it extremely hard to find real good value / heavily discounted prices.

Due to the lack of buying options, I've become extremely cash heavy.

Would love to see stocks that you believe are trading discounted at the moment; perhaps due to short term changes or market sentiment.

Many thanks,

 

[luutzu]

Hi All,

Wanting to create a thread where you see value approaching or where a stock has been heavily discounted.
As of late the two stocks I saw value we're in VOC and MYX, however aside from that I've found it extremely hard to find real good value / heavily discounted prices.

Due to the lack of buying options, I've become extremely cash heavy.

Would love to see stocks that you believe are trading discounted at the moment; perhaps due to short term changes or market sentiment.

Many thanks,

Look into Mermaid Marines [MRM]

 

[UMike]

Really can't see too many.
Just Started a business so a lot of my sold stock is going into that....

Otherwise I'd be Cash heavy also.

 

[Knobby22]

I've got one but haven't bought in yet.

I own a lot of MOC and I reckon they are very cheap at present.

 

[tech/a]

Great idea

Be fantastic to see Fundamental analysis in action.

Lots of technical stuff would be great to see the other
Form of analysis showcased

 

[Knobby22]

I will explain why I believe MOC is cheap.
Mortgage Choice is a broker for home loans. As such, unlike the banks, there is no risk of bad loans and the ability to rewrite loans and get more fees (e.g. changing to fixed interest) and also getting fees as the loans continue. Mortgage Choice is independant unlike RAMS and Aussie Home Loans and has very effective management that has helped build trust in the market leading to a rising share of the market.

I bought in at around $1.90 expecting only very marginal growth but that has been proven wrong as the business has been able to expand through increasing the number of brokers and also selling insurance.
They also got rid of their HelpME Choose website which i was always against as in my view it acted against the business plus it made a loss. That has helped to the much improved returns recently but is a once off. (though the effect is a permanent improvement to the bottom line).

The reason it is a buy is:
Price as I am typing is $2.46.
yield about 7% fully franked! so you get tax back if structured correctly, 10% yield!!, Dividend 8.5c for interim, pretty safe bet it will be 9c for final. This is one of the best returns in the market.
So even if the price goes nowhere you will be getting a very safe return. That alone means to me the price is too low.

But as mentioned there is growth also. It's not amazing growth, it appears to me to be about 3 to 5%, depending on how profitable the insurance is and how many home loans are generated. If the governments, which are under pressure to help Gen Ys buy actually do something to help and shake out the investors a little, this could increase by more.

Risks - the only risk I can see is regulatory. There is a push to stop commissions, even though the mortgage broking industry has been shown to act better than the banks.

Mortgage Choice is well run with a great system that allows it to make decent profits while some of the smaller brokers are struggling to compete.

 

[mcgrath111]

Look into Mermaid Marines [MRM]

An interesting one indeed, trading at book value I see from a quick glance. Definitely something Ill take a look intoeven if quite speccy.
Thanks!

I've got one but haven't bought in yet.

I own a lot of MOC and I reckon they are very cheap at present.

Ive always thought of MOC as a good business, but can't see it being cheap unless you're talking about cheap in relation to growth prospects?

Great idea

Be fantastic to see Fundamental analysis in action.

Lots of technical stuff would be great to see the other
Form of analysis showcased

Very true, the key to a winning formula if done correctly on either front

For me, Ill play devils advoce and say that BBUS is cheap given the events coming up in the US like the Fed etc.
Might have a small small play on it, to test of im correct.

Anywhoo, back to stock searching and cash hoarding (funny considering how small my balance is lol) for the moment.

 

[luutzu]

An interesting one indeed, trading at book value I see from a quick glance. Definitely something Ill take a look intoeven if quite speccy.
Thanks!

Ive always thought of MOC as a good business, but can't see it being cheap unless you're talking about cheap in relation to growth prospects?

Very true, the key to a winning formula if done correctly on either front

For me, Ill play devils advoce and say that BBUS is cheap given the events coming up in the US like the Fed etc.
Might have a small small play on it, to test of im correct.

Anywhoo, back to stock searching and cash hoarding (funny considering how small my balance is lol) for the moment.

About 5 times under book value

 

[mcgrath111]

About 5 times under book value

Dare I ask, what % of your portfolio is in MRM.

 

[Muschu]

..... For me, Ill play devils advoce and say that BBUS is cheap given the events coming up in the US like the Fed etc.
Might have a small small play on it, to test of im correct..

BBUS [which I had never heard of] seems very illiquid.

 

[Quant]

I,m loathe to commentate on any of this , but i am not seeing any bargains mentioned here and some quite the opposite , buyer beware DYOR ... seriously ..... a bargain ????

 

[Joe Blow]

Just a reminder that the usual rules apply to a thread such as this one. Please don't nominate a stock without also explaining on what basis you believe it to a bargain. It doesn't have to be a long or detailed explanation, but it needs to be there so others can understand what your reasoning is.

A big thank you to those who have already taken the time to do this.

 

[mcgrath111]

I will explain why I believe MOC is cheap.
The reason it is a buy is:
Price as I am typing is $2.46.
yield about 7% fully franked! so you get tax back if structured correctly, 10% yield!!, Dividend 8.5c for interim, pretty safe bet it will be 9c for final. This is one of the best returns in the market.
So even if the price goes nowhere you will be getting a very safe return. That alone means to me the price is too low.

Interesting, Thanks Knobby!

BBUS [which I had never heard of] seems very illiquid.

It is, and is just the inverse of the US market. High risk but how high can the market reasonably go?
Then again, the market isn't rational so it could keep chugging along against the fed and earnings.

W

View attachment 70098 I,m loathe to commentate on any of this , but i am not seeing any bargains mentioned here and some quite the opposite , buyer beware DYOR ... seriously ..... a bargain ???? View attachment 70097

DYOR is a given.
Unaware of why you hate to commentate on any of this? ...Does it grind your gears?

 

[tech/a]

Thought Id place these in a Watch list for my own curiosity.
From a technical view (As an aside) MOC and MRM are the
only charts of remote interest. Watching with interest.

 

[luutzu]

Dare I ask, what % of your portfolio is in MRM.

personal account: 18%; super account: 15%.

I got unlucky getting into it too early, as it turned out, on the personal account and there's a capital lost at the moment.

On the super account, a whole lot luckier and winning by about 1/3.

I'd be happy to discuss it if you like, but yea, I do have an interests in it so do your own research etc.

 

[waverider100]

STO LOOKS CHEAP

 

[Joe Blow]

I'll just quote this again:

Just a reminder that the usual rules apply to a thread such as this one. Please don't nominate a stock without also explaining on what basis you believe it to a bargain. It doesn't have to be a long or detailed explanation, but it needs to be there so others can understand what your reasoning is.

STO LOOKS CHEAP

Hi waverider100, welcome to ASF and thanks for your contribution. Do you mind taking a minute or two to explain why you believe STO is a bargain? Thanks!

 

[luutzu]

View attachment 70098 I,m loathe to commentate on any of this , but i am not seeing any bargains mentioned here and some quite the opposite , buyer beware DYOR ... seriously ..... a bargain ???? View attachment 70097

Ben Graham wrote somewhere that sometime a company with low or negative earnings are considered dead when in fact it is very much alive and what's more, its book value and real assets are pretty much real.

I butchered his words, but yea, sometime the market focus too much on the company's earnings and completely ignore its assets.


It's obvious that MRM have a revenue and debt problem. But the problem aren't as dire as the market think it is.

Of the $390M+ in total debt, about $200M of that are MRM's normal capital structure - i.e. it has always had that debt on its book, and their bankers roll it over when they come due. Nature of business.

The remainder are being paid from some operating income, savings, sales of vessels.

And by my previous estimates, MRM can pay for the current debt coming due during the FY17. It's tight, but they'll make it.

If conditions does not improve after FY17, it's going to be in a bit of trouble. But that trouble can easily be resolved with around $170M in new equity. No more than that.

Taking that into consideration, the dilution still make MRM a bargain at, from memory, at least buying $1 for 50cents.


But given the improving oil prices, the already greenlighted projects MRM had bid for and due to start using its 2nd contracted vessel on INPEX around July [?]... I'm pretty sure there's no need for an equity raising.

But yea, will MRM go bankrupt? No.

Will the worst case scenario make the investment worthwhile? 100% upside isn't too bad. If we get luckier, it'll be a lot more than that.

 

[mcgrath111]

After having a super quick look, (Clearly can’t add the depth of Luutzu) but a 2 minutes snapshot:

· Trading significantly under book value.
· If company went belly up, what would they actually get in a depressed oil market?
· Riding on the wave of one commodity, no pun intended …as such very high risk.
· Management seem open about challenges and prepared to make the tough decisions. Cost cutting, debt reduction… ‘Salaries frozen since July 2015 and no short or long term bonuses paid or vested for the past 2 years’.
· Vessel sharing with woodside and ConocoPhillips, desperate times / desperate measures I guess.
· Safety of operations has increased.
· Cash has been continually dropping, quite worrying.
· As mentioned debt seems like a 50/50 as to whether capital raising will be required.

Risk appears to be quite high. Is MRM at bargain price? It appears so based on the asset front; yet that being said I’d be intrigued to see what comes from the Armortisation payment of 37.5m due 31st March 2017 (Previously deferred from 31st Dec 2016.) If it falls through, maybe they can sell it all on ebay? – Anyone in the market for a tugboat?

http://oilprice.com/Latest-Energy-N...anker-You-Can-Buy-It-On-The-Chinese-Ebay.html

 

[Fsnav9]

SAU - southern gold.

IMO very cheap. 12 mil market cap, gold producer. No debt. 1 mil cash in bank and receiving another 10-12 mil in profit distributions in the coming months. Aggressive drilling campaign planned in several projects in Australia and Korea. Will be paying a dividend soon as well.