Which Aussie stocks are good for long term investing?

[luutzu]

The stock has had an enviable record over 18 years. Stacks up 100%. Like you say, you are guessing.
Well here's my guess. As long as you and I are alive, it will be a solid company, increasing dividends as it has done year on year for a decade as it's earnings are expected to increase 55% over the next few years. I don't even know why you are mentioning a 5% interest rate and comparing it to a $1 million dollar mortgage rate.
Do you know the rates that some of these no hope spec stocks borrow at just to stay listed? I do and
I would suggest 5% is a good rate on the size of APA's borrowings.

You heard of bulk buying, yes?

If average Joe can borrow a measly $1M at some 4%, a great, awesome, all powerful corporation like APA should have all the bankers falling over themselves giving it money for less than they would Average Joe. And lend it for a lot less.

If I run a multi-billion dollar empire that's as good as gold... and need to borrow for that great "growth" opportunity... I would negotiate hard and have the bankers come to me asking to lend me money.

Does a 5%+ interest rate on $9.7B sound like the lenders are falling over themselves to you?



APA Maq Conference. Released May 3rd. 2018


Sooo.....

Its current WACD is 5.6%, but... wait for it... it could now go and borrow for 5%.

But there's more... Its interests on bonds due FY18 to FY21 ranges from 6.8% to 11.9%. BUT... wait for it...
its "projected" WACD to FY36 - that's 18 years into the future... is, they reckon, 5.3%.


Do they not read the world's central banks' statement and recent moves? QE is about to end. Rates are moving up.

So unless APA raises a heck of a lot more equity and use a few billions of it to repay their debt, no way in the world any lender would lend it at a lower rate in a rising interest rate environment.

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Not all debt are bad. And not all debt are equal either. I'm sure you know that.

But the good kind of debt are ones that charges practically zero interest. That can be found in insurance floats managed by very capable fund managers... and can be found in absurdly good companies so established they managed to get pay right away but tell their suppliers the cheque's in the mail a month or three later.

A company with massive borrowing and massive scale of operation but whose current assets [the liquid ones] cannot pay current liabilities; getting a higher than average interest rate on their loans... That's not a quality business.

Well, why and how does it manage to pay increasing dividends and its share price just go up and up, you're asking.

A good story well told.

 

[rb250660]

None of them. Tyey’re all POS that are designed for short term gains only IMO.

 

[luutzu]

None of them. Tyey’re all POS that are designed for short term gains only IMO.

There are some great OZ companies you could hold and die with. Not that many (that I know of), but they are there.

Problem with the good mid-cap ones is they tend to be taken over pretty quickly. Just when it look like their best days are ahead, they got a price the board can't refused and that's it, you're stuck with cash you might do something stupid with.

MND is, I think, one of the best in its field... and is getting bigger and better the right way. But that right way mean little to do debt with over $200M in cash they've been stashing away the past few years.

That's just painting and big red takeover target man. With cheap money about to end, resources looking like making a comeback, you've got to make yourself less attractive Mono.

btw, I own a fair few shares in MND.

 

[Wysiwyg]

Cromwell has a comparatively stable share price and 2c div. every quarter. I liked them for awhile but went chasing growth. Thought they were great for parking.

 

[Faramir]

I wish Veda was still around. It was my 4th stock back in July 2014. VED was taken over. Soon Sirtex Medical SRX will be taken over.

If I was to suggest a stock (warning: uninformed and uneducated suggestion), maybe a stock that is nearly going to break its speccy status. Starpharma SPL. It doesn't turn a profit yet but the science behind this company is fantastic. Today SPL went up by 11%. The management are great Scientists and spruikers but hopefully they can turn into business managers: that is, hire someone good on the business side. The CEO is busy forming new partnerships. It is something for you to look up.