Your top 3 holdings and why you hold them

Julia · 30 March 2010

ers_6 said:
good thread people keep them coming.

my three holdings:
ANZ
MTS
QBE

all solid companies... have made a packet on ANZ since picking them up.

Can you define "A packet"?
When did you pick them up?

Frequently posters say things like "this has been a brilliant investment for me", "I've made a huge profit from this" etc etc.

I don't suppose it's ever likely to happen, but I'd really like to see some quantified definition of these superlatives.

e.g. is "a packet" say 100% capital gain in one year, in three months?
Probably not, given ANZ in the last year went from $16 - $25:
MTS in the last year went from $3.90 to $4.10
QBE in the last year went from $19 to $21
(all above approx.)

This isn't a criticism. We all hold different stocks for different reasons.
I've just become more and more interested recently in some definition of a 'successful' investment/trade.
It seems for some it's as simple as a return better than retail deposit cash rate, and for others it means at least a 100% gain in six months.

So_Cynical · 30 March 2010

Julia said:
Can you define "A packet"?
When did you pick them up?

Frequently posters say things like "this has been a brilliant investment for me", "I've made a huge profit from this" etc etc.

I don't suppose it's ever likely to happen, but I'd really like to see some quantified definition of these superlatives.

I was thinking a thread called "Your top 3 performing stocks and how much you paid for them" would be interesting.

There's almost no chance it would ever get to 4 pages.

Joe Blow · 30 March 2010

ers_6 said:
good thread people keep them coming.

my three holdings:
ANZ
MTS
QBE

all solid companies... have made a packet on ANZ since picking them up.

Ers, would you mind going into the "why" part a little for the benefit of those reading the thread?

Thanks!

jaydebono · 31 March 2010

CBA - 35% - Stable stock IMO, i've held it for a long time, no reason to sell now.

IIN - 20%(Iinet, i think thats the code ) - I think they are a great company and some upcoming announcements I think are going to produce good results, im not referring the just announced purchase of netspace either.
I actually just increased my holding with this company.

SYP - 7% I believe there's a good future for this company, my investments risen 50% on them since purchase. Going to do a short sell soon as i anticipate a bit of a drop before another lift. I just hope the US market reponds well to their product offerings.

Muschu · 31 March 2010

So_Cynical said:
I've only just discovered GOW to..i think that all that cash there sitting on could be seen as a negative, like cos its not out there making money, also the fact that there buying a bit of property could be seen as a negative.

I really like GOW at the current SP.

Not sure whether GOW is a discovery of any interest. SP today is roughly what it was 5 years ago.

Idiode · 31 March 2010

Top three in my SMSF are Aussie Banks. All are growing profits and pay fully franked dividends - boring but consitent.

Definitely a huge concern during the GFC with visions of queues of irate customers demanding their deposits back.

All three have grown (recovered better) to place themselves in the top 3 positions.

WBC 12% - started out as SGB and turned into WBC after SGB/WBC merger.
NAB 10% - bought in 2004 after their deplorable trading desk failure. Have had a rough ride but basically John Stewart's stewardship sorted them out during his reign as CEO.
ANZ 10% - originally purchased in 1999 for $10.40 and have added more as opportunities present themselves.

ABP at 9.9% almost comes a tie with ANZ but one third were sold before the GFC and repurchased since.

cutz · 31 March 2010

I'd be a bit worried having too much in the big banks at the moment, good article on the matter in page 32, today's fin review.

Julia · 31 March 2010

Idiode said:
Top three in my SMSF are Aussie Banks. All are growing profits and pay fully franked dividends - boring but consitent.

The SP isn't necessarily following their growing profits, however.
I bought CBA back in October 09 and am only up a miserable 4.2%.

Definitely a huge concern during the GFC with visions of queues of irate customers demanding their deposits back.

There was no likelihood of this because the government quickly guaranteed deposits.

All three have grown (recovered better) to place themselves in the top 3 positions.

Not sure what you mean by "top 3 positions". Top 3 in your p/f?

Idiode · 31 March 2010

Julia said:
I bought CBA back in October 09 and am only up a miserable 4.2%.

I guess it all depends on when you bought. I sold my holdings in CBA for $4.00 in 1994 - now I wish ......

There was no likelihood of this because the government quickly guaranteed deposits.

These visions were long before the government stepped in - what if they didn't?

Not sure what you mean by "top 3 positions". Top 3 in your p/f?

Yep! top three by value in p/f

This is after reducing my holdings in all three banks in September '09.

robusta · 31 March 2010

So_Cynical said:
I've only just discovered GOW to..i think that all that cash there sitting on could be seen as a negative, like cos its not out there making money, also the fact that there buying a bit of property could be seen as a negative.

I really like GOW at the current SP.

This is in a recent letter to shareholders.
"In seeking to reposition the company, retail shopping centres
were identified as counter-cyclical opportunities characterised
by having high rental yields, low valuations and often
distressed selling. They are expected to provide a high and
stable source of income to our investment portfolio. In
addition, we believe that they have the potential to deliver
strong capital growth over time as rental incomes increase
and valuations again move back towards long term averages.
Retail shopping centres are likely to benefit from Australia’s
ongoing economic strength, low unemployment and low
interest rates. We will also endeavour to add value to these
shopping centres over time using our in-house experience and
expertise."
As to the cash they are sitting on

"The company is currently reviewing a number of
property, private equity and listed equity investment
opportunities in which it expects to deploy its surplus
cash funds."

IMO they are a long term proposotion. They will probably wait until AREIT'S all all the rage again and sell out for a massive gain to some highly leveraged player then move on to the next out of favour undervalued asset, meanwhile paying great dividends from their portfolio of ;43% listed blue chip equities, 29% property, 10% private equities plus wherever they park the 18% they are holding in cash at the moment.
All this at a 20% plus discount to NTA. I think I may have almost talked myself into buying some more.

Garpal Gumnut · 31 March 2010

Re: Your top 3 holdings (How much worth) and why you hold them

Garpal Gumnut said:
CSL People always getting Flu.
SUN Takeover soon
ORG Been good to me

I am however over 70% in cash.

RIO was a buy in GFC and saved my bacon. Sold it.

gg

CSL People always getting Flu.
SUN Takeover soon
AEE Overheard information inside dunny at Ross Island Hotel. My solicitor Sue Grabbit says this is not inside information.

I am however still over 70% in cash.

drsmith · 31 March 2010

robusta said:
This is in a recent letter to shareholders.
"In seeking to reposition the company, retail shopping centres
were identified as counter-cyclical opportunities characterised
by having high rental yields, low valuations and often
distressed selling. They are expected to provide a high and
stable source of income to our investment portfolio. In
addition, we believe that they have the potential to deliver
strong capital growth over time as rental incomes increase
and valuations again move back towards long term averages.
Retail shopping centres are likely to benefit from Australia’s
ongoing economic strength, low unemployment and low
interest rates. We will also endeavour to add value to these
shopping centres over time using our in-house experience and
expertise."
As to the cash they are sitting on

"The company is currently reviewing a number of
property, private equity and listed equity investment
opportunities in which it expects to deploy its surplus
cash funds."

IMO they are a long term proposotion. They will probably wait until AREIT'S all all the rage again and sell out for a massive gain to some highly leveraged player then move on to the next out of favour undervalued asset, meanwhile paying great dividends from their portfolio of ;43% listed blue chip equities, 29% property, 10% private equities plus wherever they park the 18% they are holding in cash at the moment.
All this at a 20% plus discount to NTA. I think I may have almost talked myself into buying some more.

Interesting stock.

I note though that the shopping centres they are purchasing are in smaller regional areas. Kempsey for example has a population of under 10000 so a knowledge of what drives the local economy is critical. A regional area's economy may be less diverse than that of a larger metropolitan area and thus more volatile. Their venture into retail property looks to be relatively recent so management obviously does not have a proven track record in that area.

These are factors which may be contributing to the share price discount to NTA.

robusta · 31 March 2010

drsmith said:
Interesting stock.

I note though that the shopping centres they are purchasing are in smaller regional areas. Kempsey for example has a population of under 10000 so a knowledge of what drives the local economy is critical. A regional area's economy may be less diverse than that of a larger metropolitan area and thus more volatile. Their venture into retail property looks to be relatively recent so management obviously does not have a proven track record in that area.

These are factors which may be contributing to the share price discount to NTA.

Thankyou for your views drsmith
IMO they are looking at Kempsey and Port Macquarie as a growth area with more people looking for a seachange plus a influx of retirees.
As for their experience in running retail property here is a brief company profile from the Investsmart Website

"Company History
Gowings was established in 1868 by John Ellis Gowing. The company's origins were in retailing. The first store was opened at 318 George St, Sydney. The company purchased many property investments in the 1920s. In 1953, Gowings started an investment portfolio. The company listed on the ASX in July 1962. In 2001, the company split into a listed investment company and a retailer. In November 2005, administrators were appointed to Gowings Retail.
Differentiating Factor
GOW concentrates its investment in companies with high-income generating potential and long-term capital growth."

So_Cynical · 31 March 2010

Muschu said:
Not sure whether GOW is a discovery of any interest. SP today is roughly what it was 5 years ago.

Rick you say that like its a bad thing. :dunno: im only interested because its trading at a significant low, if GOW was 2.85 now, like it was 12 months ago my interest would be zero, GOW has delivered a Gross dividend yield over the last 5 years of 8.5% PA (approx at current price) so not to bad if you paid about the current price, keeping in mind its a very low risk conservative stock...just look at all the people putting money in the bank for less.

Now a look at the 5 year chart tells us that there's only been 8 or so months over the last 60 months when you could of brought GOW at around the current SP....so seriously why would anyone want to pay more? and yet thousands have...the chart tells me that GOW is very capable of substantial capital growth if you enter at the right time.

Why tens of thousands of investors, punters, mums and dads and professionals ignore this simple fact is totally beyond me.

Nero64 · 31 March 2010

CWK: Thermal and Coking coal explorer with interests in convential coal producing and clean coal technologies. It has tenements Oaklands, Vickery South and Ferndale. All these are surrounded by Rio Tinto and other major producers. Its Oaklands resource is 822MT alone and increasing and is situated near rail and port facilties. It listed at $1.20 at the height of the coal boom in June 2008. Then fell to 9c. It now stands at 34c. I bought and hold because coal is still the most dominant and cheapest energy fuel in town.

LNC: Involved in clean coal technology and gas to liquid coal conversion. Has a major project in the Walloway Basin in South Australia for commercial underground coal gasification. It has 3 mines Galilee, Emerald and Pentland with the potential for thermal/coking coal production. It hopes to sell these in the next few months for 2 Billion plus which will bring $2-3 per share based on cash value alone. I bought and hold because of its coal tenements, the UCG story and because it acts as a coal/clean energy hedge.

NPX: Is the leading manufacturer and marketer in resins and linked to the growing economy of China. I invested in based on growing earnings and sales. I have bought in 5 times and will continue to hold until I am happy with the profit or until I get stopped out.

Julia · 31 March 2010

So_Cynical said:
Rick you say that like its a bad thing. :dunno: im only interested because its trading at a significant low, if GOW was 2.85 now, like it was 12 months ago my interest would be zero, GOW has delivered a Gross dividend yield over the last 5 years of 8.5% PA (approx at current price) so not to bad if you paid about the current price, keeping in mind its a very low risk conservative stock...just look at all the people putting money in the bank for less.

Now a look at the 5 year chart tells us that there's only been 8 or so months over the last 60 months when you could of brought GOW at around the current SP....so seriously why would anyone want to pay more? and yet thousands have...the chart tells me that GOW is very capable of substantial capital growth if you enter at the right time.

Why tens of thousands of investors, punters, mums and dads and professionals ignore this simple fact is totally beyond me.

I'd say tens of thousands ignore this stock because they can do way better with their money elsewhere.
Even if you were clever enough to buy at the start of your chart at the low of about $2.70, it took two years!! to get to its high of about $4. There are other stocks that will show that much capital appreciation in a fraction of that time.

Yes, it's a very decent yield.

Essentially we come back to our fundamental difference in approach - you look for income, even if you're not making much capital gain, but others of us look for capital appreciation first.

Idiode · 1 April 2010

Julia said:
I'd say tens of thousands ignore this stock because they can do way better with their money elsewhere.

Hi Julia,

I am genuinely interested to know your top three selections where you "can do way better with your money elsewhwere", keeping in mind that fully franked dividends are better value than interest bearing deposits.

Julia · 1 April 2010

Idiode said:
Hi Julia,

I am genuinely interested to know your top three selections where you "can do way better with your money elsewhwere", keeping in mind that fully franked dividends are better value than interest bearing deposits.

Idiode, I've outlined my approach in posts 17 and 23 on this thread.

When you say that 'fully franked dividends are better value than interest bearing deposits', yes, if tax is a consideration, and also depending on the interest rates offered. Consider also that retirees in the pension phase of their Super are paying no tax.

I don't ever look at buying shares because the yield is 'better than interest on cash'.
We've had this discussion a hundred times and I'm not doing it again here, other than to say I will never see the sense in getting 10% in dividend yield and franking credits, if your capital is diminishing at the rate of 15% p.a. because of a falling SP.

What matters is your bottom line at the end of the year.

My top three stocks vary. At present they are:

BKN 52 week range 1.62 - 7.97

CPB " " 12 - 32

MND " " 8 - 15.77

Reason for buying: all performed well for me prior to being sold fairly early in the GFC, and had returned to recognisable uptrend when I re-entered.

I couldn't tell you what dividend yield and/or franking credits attach to any of these.

Like Rick and GG, I'm still substantially in cash, around 60% at present.

SmellyTerror · 1 April 2010

Edit: didn't see Julia's post above before I posted, obviously...

Idiode: well given that we're looking at hindsight, if you'd bought LGL yesterday you would have made 30% in a day (I'm cut becuase I had an order for LGL all written out for $3.03 yesterday morning, with a take-profit at $4, but cancelled it because I figured I'd give it another day to settle down. In my defence, a toddler was climbing up my leg).

Bascially, I want more than 8.5%pa to justify the risk of owning a share. Any share. Damn right they're higher than interest bearing accounts - they have more risk. But is 8.5% enough for you? Not me. If I can't get 12% then I might as well just pay off my home loan. And no matter how safe a stock is supposed to be, it's simply nothing like a bank deposit. Look at the "safe" REITs. How do those people feel right now about their nice safe dividends?

Selling a stock is just as much an income as getting a dividend. Those dollars in the bank don't care who their parents are. This is a thread about holding, so I can see how a dividend-focus can come along, but ignoring capital appreciation is as bad as ignoring dividends. Worse, IMO, since there tends to be a lot more money in capital appreciation (and more money lost in capital depreciation, too).

To answer the thread:
1. RED (10%): I know! A nutty spec, no dividend. But as you can see I'm not really a buy-and-hold sort of guy, so there's not a lot of competition. This one can be such a large part of my account because I've got a pretty tight stop. Very confident in the future of this lil' feller, low cost, big reserve, producation to come online when they'll be getting contracts well over the old $800 mark, obvious takeover target. My average buy-in is 0.13. I've been dumping a few at 14 and rebuy at 12, but most I'm hanging onto for the ride. I'm a gold bull, so this is my leverage on leverage on leverage play on gold.

...but an example of getting money from appreciation. Could have sold this at 0.145 today, for an 11% profit. My little 12 -> 14 trades (which I can do because I'm confident of it not dropping below 10c, and confident it'll get over 20c in a year) are making 16% a time, and I've done it twice in the last month (should have been 3, but I held on the last time. We'll see how that goes).

2. NAB (6%): The only big bank worth owning, IMO. Here I'm fishing for the issue they'll need for AXA - so definitetly NOT a CFD trade (none of these longer-terms are, of course).

3. WOW (5%): they're devious bastards, hardware (vs Bunnings) coming in, solid and defensive.

Should have: WDC. When I can spare some money for nanna shares, it's top of the list. Great income resilience, good management, and big managenemt ownership (see previous posts about WDC). Takes a cut of all the clever stuff JBH and WOW and WES and etc. do to get more money out of their customers. Will take a cut from the next big retailer to come along, and the next... Good business to be in all 'round.

awg · 1 April 2010

BHP ~11% been a core of my portfolio since day 1, over 20yrs.

I continue to hold a favourable view, my timeframe is long-term.

IRN ~8.5%

Purchased as an M&A candidate, added some more after the ann as an arb, hence the size of my position.

PRU ~8%

Got into this goldie reasonably early, have added to my position several times. This is very much a takeover target as well.

dont know if we are counting hybrid securities as well, but I chucked a lump of spare cash in them as 8%+ is better than bank interest atm, and I can sell them tommorrow if I want.

Your top 3 holdings and why you hold them

Julia

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