Long Term Stock Ideas

[craft]

Thanks people for the suggestions - Most of them are certainly making me look into areas that I otherwise wouldn't.

As always; no story - just running numbers.

Interested in what criteria you used to run the numbers - if you care to elaborate.

I like your top group apart from NVT which I consider has seen the best of its days. Other comments on that thread.

Interesting - If I was to pick an example of the sort of business I am looking for over the long term it probably would be NVT. - That's why its good to get a diversity of input on this thread - but not sure I'll be able to see what others see - hopefully some more in-depth thread discussion may follow at some stage on some of these stocks.

Thanks everybody.

 

[Value Collector]

I'm on the hunt for some more candidates to research for a looong term portfolio.

Anybody want to share some prospects they like? Price doesn't have to be right at the moment - I can wait for that to occur, but the quality of the management and business economics needs to be already obvious to warrant doing more research.

Capilano Honey (CZZ)

It's already had a big run up in price, But it certainly is going to be a good long term hold in my opinion.

If you invest internationally, I think The Walt Disney Company (NYSE DIS) is a wonderful company with a lot going for it over the long to medium term, they have another theme park destination opening in shanghi, a high quality movie pipeline over the next 5 years eg starwars, marvel, Pixar and Disney, and the growth in on demand TV such as net flix is allowing them to get great cashflow from their back catalogue of older films.

My US portfolio is about 95% Disney with the balance in Berkshire, I invest all Disney dividends into Berkshire hatchway B shares, its been a great set and forget US stock stratergy for me.

 

[Value Hunter]

Credit Corp (CCP)

The management are world class in their industry, the track record is good and the balance sheet is strong. Earnings are relatively consistent with the company only having one year since listing in 2000 where earnings went down.

Ultimately it is a commodity business with no sustainable competitive advantage that consistently generates superior returns than its competitors by having better management. The downside is that the company is very dependent on having good management to do well. Things will go downhill quickly should the successor management be less than outstanding. Fortunately the current management team have been in place for some time and in my opinion look likely to remain in place for many years to come. The other risk is that its competitors get better management and catch up. However I would say in terms of IT and HR systems, expansion into related business areas, etc the company is at least 18 months ahead of its competitors which does give it some breathing space.

disclosure: Its my largest shareholding and constitutes over 90% of my share portfolio.

The company has a long growth runway ahead of it and in my opinion will have ample opportunity to reinvest a meaningful (at least half) chunk of earnings at returns north of 20% well into the future.

 

[shouldaindex]

Anyone have suggestions for companies with a -

Competitive Advantage (ROE 15%+)
At Value (PE <15)
Proven Earnings (Dividend Yield > 0)

About 65 companies pop up.

 

[Ves]

Anyone have suggestions for companies with a -

Competitive Advantage (ROE 15%+)
At Value (PE <15)
Proven Earnings (Dividend Yield > 0)

About 65 companies pop up.

Be careful when using ROE, it can be distorted by the financial structure of the company (ie. more debt).

 

[systematic]

Interested in what criteria you used to run the numbers - if you care to elaborate.

Sure, no problem. This was just a composite profitability score/ranking (not quite as extensive as what I'd normally do - this was a bit of a "whip up" - but still good)...combined with a decent Piotroski score.

 

[systematic]

Interesting - If I was to pick an example of the sort of business I am looking for over the long term it probably would be NVT.

...Anybody into an intrinsic value type / not purely 'quant' approach who is interested in how craft has done so well as a 'stock picker' (and would no doubt like to do the same)...should now be taking NVT apart. Perhaps posting your insights in this thread will be an educational experience for you, as craft responds etc.

That's why its good to get a diversity of input on this thread - but not sure I'll be able to see what others see - hopefully some more in-depth thread discussion may follow at some stage on some of these stocks.

...Fun thread! Hope it continues...

 

[shouldaindex]

...Anybody into an intrinsic value type / not purely 'quant' approach who is interested in how craft has done so well as a 'stock picker' (and would no doubt like to do the same)...should now be taking NVT apart. Perhaps posting your insights in this thread will be an educational experience for you, as craft responds etc.





...Fun thread! Hope it continues...

Contract Risk, Limited Negotiating Power, No Unique Offering, Low Capital Need Competitors, Alternative Pathways.

I see it as a macro play in an expanding industry, but with limited defence if threatened as a business.

I think we've seen both those sides playout in the past year.

 

[systematic]

I missed this comment:

Credit Corp (CCP)
disclosure: Its my largest shareholding and constitutes over 90% of my share portfolio.

Woh! :bowdown:

 

[leyy]

CAJ, MBE, DWS, AMA, FLN, RNT, WEB

are a few long-term ones, i'll have to find time to write some comments about each one.

 

[Value Hunter]

Systematic, I am youngish (25-30 age bracket). Also shares only constitute a part of my total investment portfolio. I also own commodities and residential property as well. Credit Corp constitutes over 90% of my share portfolio but a much smaller (but still significant) part of my total investment portfolio.

 

[systematic]

Systematic, I am youngish (25-30 age bracket). Also shares only constitute a part of my total investment portfolio. I also own commodities and residential property as well. Credit Corp constitutes over 90% of my share portfolio but a much smaller (but still significant) part of my total investment portfolio.

Way to go, at your age. Sounds like you're well and truly setting yourself up for life!

 

[systematic]

I'm on the hunt for some more candidates to research for a looong term portfolio.

Anybody want to share some prospects they like?

Going back to the OP, I realised that I don't have to look at quality (as I did in a previous comment) - the request is for prospects liked.

Okay, so if I had to pick some stocks that I had to hold for (say) 5 years...I'd stick to value / cheap stuff. I wouldn't worry too much about quality. I wouldn't look at momentum as I normally do. I'd be going for a basket of cheap stuff based purely on the mean reversion of value. This is usually the sort of list of stocks that normal people wouldn't want to own; too scary!

Top (bottom?) 25, I've got:

LCM Logicamms
MLD MACA
DOW Downer EDI
MND Monadelphous Group
EPW ERM Power
DCG Decmil Group
PRT Prime Media Group
LGD Legend Corporation
SGM Sims Metal Management
PTL Pental
KSC K & S Corporation
MCE Matrix Composites & Engineering
STS SRG
CSR CSR
CDA Codan
BYI Beyond International
UOS United Overseas Australia
CAB Cabcharge Australia
OZL OZ Minerals
RCR RCR Tomlinson
SPO Spotless Group Holdings
WPL Woodside Petroleum
GNG GR Engineering Services
DSH Dick Smith Holdings
FMG Fortescue Metals Group

A variety of sectors covered (industrials appearing most frequently), and a variety of market caps (from Woodside to ~$40m)


From the same group, but with an afterthought nod to quality and sticking to microcap territory, I'd be left with:

LCM Logicamms
LGD Legend Corporation
PTL Pental
MCE Matrix Composites & Engineering
STS SRG

 

[robusta]

I've been trying ALU - Altium out for size in my portfolio. Seems to be a decent fit.

Also DNA - Donaco should show some decent growth in the future.

 

[Wysiwyg]

TOX free solutions on face value appears to be a smartly run business and so run right they should get the recurring domestic and S.M.E. business. The share price trend since 2004 is up and the gross dividend yield is around 5% at $2.30. I don't like prices that bounce very near off old lows (learned lesson) as it did today and as such look for lower price entry.

Something to consider is their business from mining and construction that has declined and is reflected in the medium term downtrend since 2014. Trading volumes have remained subdued on a monthly basis.
Reiterating again I believe there is a lower share price to be had but for a long term hold at the right entry price, I like.

They should stick around for many years to come but any negative feedback is welcome?

 

[systematic]

I'm on the hunt for some more candidates to research for a looong term portfolio.

Anybody want to share some prospects they like?

SHM Shriro Holdings caught my eye whilst considering the longer term.

craft - your thoughts? No comments in the relevant thread

 

[Ves]

SHM Shriro Holdings caught my eye whilst considering the longer term.

craft - your thoughts? No comments in the relevant thread

Wonder why they wrote down the goodwill in the 2-3 years before the IPO? (then restated the numbers in the Accounts so they didn't show a goodwill write-down)

I also don't like companies that distribute brands that they don't own. You're basically building the business in a territory for the brand owner and giving them a free option to reap the benefits if it's successful long-term. It's great while it lasts for the distributor if it's a good brand, but look at say Oroton (ORL) for instance, which was decimated when Ralph Lauren ripped up the agreement and took it back in-house.

edit: also a few rumours floating around that the two major director / management shareholders may be willing to sell down their holdings (limited to 25% as per "trading window update" accouncement).

 

[Muschu]

Disclosing that I have small holds in both of these

GXY due to the potential of lithium and the productuin stage the company has reached;

HZR due to potentially revolutionary approach to production of clean and low cost graphite and hydrogen - 2 recent very encouraging announcements.

 

[ggkfc]

I wonder if systemic bought into DSH last year.. what a disaster!

 

[systematic]

I wonder if systemic bought into DSH last year.. what a disaster!

Are you referring to me? I assume not, but just checking.