Value stocks

[blaze87]

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

 

[Joe Blow]

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.

 

[ta2693]

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.

 

[blaze87]

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...

 

[FUTUREFUND]

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

 

[Ken]

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.

 

[brilliantmichael]

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

 

[Buffettology]

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.

 

[Buffettology]

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.

 

[brilliantmichael]

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.

 

[Buffettology]

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).

 

[rhen]

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

 

[Julia]

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.

 

[CanOz]

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,

 

[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.

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

 

[Julia]

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,

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

 

[Julia]

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

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.

 

[michael_selway]

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.

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

 

[michael_selway]

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.

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

 

[Buffettology]

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

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.