Long Term Blue Chip Stocks

[DowJones]

What do you think are some good Blue Chips that is oversold in the current environment but will emerge relatively unhurt by the credit crisis in 2-3 years time?

I know there are great valued stocks trading at low P/E and high dividends but fear and volatility is reigning in the market. However taking a 2-3 year time-frame I believe the market eventually will settle and recover.

I would love to know what people out there believe are good picks

 

[wayneL]

What do you think are some good Blue Chips that is oversold in the current environment but will emerge relatively unhurt by the credit crisis in 2-3 years time?

I know there are great valued stocks trading at low P/E and high dividends but fear and volatility is reigning in the market. However taking a 2-3 year time-frame I believe the market eventually will settle and recover.

I would love to know what people out there believe are good picks

Over here, companies like Sainsbury's (analogous to WOW) who are recognizing the trouble the economy is in and are proactive in pricing and structuring of business are still doing well at this stage. Companies who have relied on the consumerist boom and loose credit to prosper may suffer badly and long term... that sort of retail concern are going bust in droves.

 

[grace]

Good oil and gas stocks I would have to say. Particularly with oil price so very low, and exploration will be abandoned at this rate. We always need energy. There are plenty of good and bad ones amongst the energy sector so choose wisely.

 

[gfresh]

coal, gas, oil.. I agree. The world runs on the stuff, and even when it's not running that well, it still has to consume a heck of a lot of it.

Never forget the energy crisis, it's just taking a breather for a couple of years.

 

[nunthewiser]

BEN

Bendigo bank

high deposit/loan ratio , lack of overseas exposure , held well during crisis

MTS

metcash

people got to eat , held well during crisis

disc .....i hold both and adding when ppl panicking , blessem all

ps my research posted is hardly worth a peanut but figured i had to type somthing , lot more to both so instead of reading 2nd hand jargon in a forum , why not hit that lil research button instead

amen

 

[sinner]

SDS Just kidding!

 

[DowJones]

I think Financials are still too unclear to get into. The big 4 have series of bad loans disclosed and who knows what they haven't disclosed? Plus what happens to them if the residential housing bubble bursts?

I have my eye on the following:

Wesfarmers - good assets (paid too much for Coles but the price reflects that) in retail, coal, fertilizer, chemicals, insurance and surely the credit market will get better

Worley Parsons - nice balance sheet, strong order book, increasing dividend

Caltex - people always need to drive right? Management came out recently and upgraded guidance. Currently a nice little dividend

Leighton Holdings - nice balance sheet, strong order book but experienced a few write-offs. Est. 800-850M in profit despite the deteriorating economy.



What do people think about these stocks? Are they any other stocks worth considering?

 

[wonderrman]

I think Financials are still too unclear to get into. The big 4 have series of bad loans disclosed and who knows what they haven't disclosed? Plus what happens to them if the residential housing bubble bursts?

They're unclear and they always are. There is no need to invest there, there are plenty more better investments out their at the moment. There's a discussion on this on the forum all ready if you wanted to read that.

I depends I guess on what you call a blue chip. I really think that there are plenty of top line primary companies out there at the moment that you can do well in. If you have enough money I would also be looking at international opportunities. There are a lot of Aussie companies with international competitors that have been priced down more but are run better and have a better international market position. Reckitt Benckiser (priced down not so much), Heineken etc. to name a few. You might need a bit of money though to make international purchases worth while.

 

[drsmith]

Wesfarmers has high debt with goodwill on the balance sheet greater than shareholders equity (-ve NTA). May require a discounted capital raising to retire debt and recapitalise the balance sheet. Management has allready strongly hinted possible dividend cuts.

Caltex's bottom line profits are not only subject to the carrying value of it's inventory but underlying profit is subject to variations in refiner margins. Caltex suffered a period of extreme share price weakness several years ago when refiner margins turned negative. Dividends in the past have been as volatile as the stuff they sell. The level of debt on the balance sheet may be better now than it was then. It's not a stock I've looked at for a while.

 

[resourceboom]

I'm starting to look into FLT, their business travel should see some good growth, and they are cheap enough!!

 

[Trembling Hand]

I'm starting to look into FLT, their business travel should see some good growth,

Really!! When you expecting to see this growth in business spending?

 

[ROE]

Really!! When you expecting to see this growth in business spending?

You dont need people to increase spending to increase growth, you can growth by increase your market share while other die off and to expand into other country and have extra income stream.

Google growths at the time the dot com dies when they capture their rival market.

JB hifi growth in a saturated electronic market control by HVN, good guys and many other shop.

but then again each man has different methods of looking at a stock.

 

[ROE]

What do you think are some good Blue Chips that is oversold in the current environment but will emerge relatively unhurt by the credit crisis in 2-3 years time?

I know there are great valued stocks trading at low P/E and high dividends but fear and volatility is reigning in the market. However taking a 2-3 year time-frame I believe the market eventually will settle and recover.

I would love to know what people out there believe are good picks

Better to do your research rather than buy on someone recommendation.

once you do your research and like a certain stock then you can use other people view and take on it to see if you miss anything...then time to click that button when it trades below what you think it's worth....

while you wait for that moment read Warren Buffett: The snowball book ... he tell you how to spot a bargain

 

[ROE]

I think Financials are still too unclear to get into. The big 4 have series of bad loans disclosed and who knows what they haven't disclosed? Plus what happens to them if the residential housing bubble bursts?

I have my eye on the following:

Wesfarmers - good assets (paid too much for Coles but the price reflects that) in retail, coal, fertilizer, chemicals, insurance and surely the credit market will get better

Worley Parsons - nice balance sheet, strong order book, increasing dividend

Caltex - people always need to drive right? Management came out recently and upgraded guidance. Currently a nice little dividend

Leighton Holdings - nice balance sheet, strong order book but experienced a few write-offs. Est. 800-850M in profit despite the deteriorating economy.



What do people think about these stocks? Are they any other stocks worth considering?

I dont know about other stock but I research on WES
My take on WES, stay away until they finalize all their 5 Billion debt by late next year.

A perfect storm about to hit WES late this year and 2010

1. Their resource business going to get a big hit with coal price half price or even lower...resource contract negotiation looming late this year and next

2. Recession looming, Coles and the like wont be well place to fight WOW. I love WOW and I did my research on them too but price is too high for me.. WOW will kick ass Coles when it come push to shove...WOW has far superior logistic system.

3. Debt they have to refinance this year and next.

4. if a price war erupt to claim market shares, WOW has the money and the balance sheet to do it, Coles could be in a -ve cash flow position ...Ouch!

that my view and opinion but I could be wrong so do your own research

 

[DB008]

l'm sticking with BHP for the moment.
Solid growth. Diversified miner. Strong on all fronts.

RGP4 (and 5 soon) at Newman is still going at full steam and l think that when there is finally a recovery (in a few years), BHP will come out alot stronger than at the present time.

On the other hand, RIO has canned all Pilbara expansion projects and are laden with debt to the eyeballs. When RIO decided to start their expansion projects, they will have a lag of a few years. Whereas BHP will be on the wave, ready to go.

BHP also just axed over 1000 jobs yesterday. That Ravensthorpe project was just a black hole IMO. Seems like they had problems with it since day one. Some bean counter will be getting a bollocking soon l suspect. Nickel West Mt Keith also down.

Only time will tell, but l'm sticking with BHP.

 

[ROE]

look like my take on WES maybe right uncle Warren always say better be approximately right than precisely wrong

http://business.theage.com.au/business/wesfarmers-in-halt-pending-capital-raising-20090122-7mz4.html