Your top 3 holdings and why you hold them

SmellyTerror said:

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).

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.

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Thanks for your comments, Smelly Terror.
Your affection for WDC, though, seems out of sync with your earlier comments about capital appreciation.
Looking at a five year chart of WDC it took two years to rise from $16 to just $24, and has since fallen to about $12 at present.
And this capital performance is not ameliorated much by the yield which, although currently at 6.6%, is unfranked, so not that great.

I know that many analysts include WDC as a core p/f stock. It's just something I've never understood when there are so many other stocks that will make you more money. We continually hear that QBE is the best managed insurance company, that it's a great business etc etc., but imo it's yet another example of how a good business doesn't necessarily translate into a consistently rising share price.

28.8% Telstra - This medium risk stock is low in price and predictable, they just payed a good dividend and are great to trade under $3.25.

23.9% Myer - They're reasonably low in price, and just paid a reasonable dividend, they have a very good broker rating, and have been around for as long as I can remember.

20.1% Caspian Oil & Gas - I made thousands on this high risk spec stock at the same time last year. At the current share price of around 1 cent it looks very appealing again. Just waiting on the one good announcement that will see it BOOM up again

FGE - 13.6%, Mining services company with good NPAT, cashflow growth and I don't know of many in a stronger uptrend post GFC, which still trade a discount compared to its peers. Its also just announced that it has received a change of control transaction, i think it is probably a partnership deal or maybe a takeover. Not sure a bit upset I sold down a bit before reaching what I thought was fair value because it was getting to be to such a large % of the portfolio and was starting to trend down.

CCV - 10.4%, Pawn broker, money lender. Makes money from the financially illiterate and has an easy way to employ the excess capital to improve profitability as it has been buying back its franchisee's stores at an EBIT of 3. In a downtrend recently though.

TBR - 9.2%, Gold miner - Thought this would be a sleeper stock in a sideways trend for more than a year but someone with deeper pockets seems to like it. Its shot up but market cap is still only a bit more than the cash and gold it has on hand + stockpiled ore awaiting processing. You get its low cash cost gold mine, 1/2 of RND (it has a complicated share structure as RND is one of TBR's largest shareholders) and any exploration upside for almost nothing.

Your affection for WDC, though, seems out of sync with your earlier comments about capital appreciation.

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Very true, sorry for not expanding earlier. As I said, I'm not a buy-and-hold kinda guy. For me, the rare holder is more of a silly psychological crutch, really. I can plonk stuff like this in my long-term portfolio, then buy my short-termers (almost all of my actual "action") with a higher proportion of margin. It's silly because it's all the same money, but it keeps it very much in my head what I'm doing with different trades. My short termers cost me interest (at least, it’s them that cost me interest in my own head, even though it’s not actually the case), so I need to constantly check if I still want them. I call any keepers I’m holding my “nanna” shares because they’re a bit silly and cowardly (like my nanna – no offense meant to intelligent brave nannas out there). Hence, rare.

Having said that, WDC is attractive to me because it's well off its highs despite some excellent prospects and very careful management. I like "careful" in my keepers. Here I can hope for capital appreciation over the next 24 months, and reasonable (if unspectacular) dividends too. I could expect to weather storms long enough to get my CGT 50% discount. Seriously, there’s no reason it can’t get back into the $15-18 range, sooner rather than later.

Most of WDC's tenants are in the order of 17-20 P/E. WDC is well behind that (14.36x at the moment). WDC pays out dividends at a similar rate to banks, but again is a good couple of points behind them on a P/E basis. Sure it’s not a fair and direct comparison, but the gap is too big IMO. High occupancy rates, good leverage to any recovery in the US, and a bit to the UK (hey, it can’t get much worse over there), in a good position to increase revenue from profitable retailers, crazy-high barriers to entry for the competition, very low risk – if you’re looking for something you could expect to hang onto no matter what, this is one to look at, IMO.

…having said that, I think “looking for something you could expect to hang onto no matter what” is generally pretty dopey, so that’s a very big IF (note that I don’t actually hold the stock myself, and despite all of this probably never will). I like to be a moving target – hell, my biggest “hold” is RED, ffs. But that’s not really on topic here. :

1. Fortescue Metals FMG - 23%
Was the first buy of my still fledgling investment career and has worked out well. I continue to own them because I believe they remain a high risk high reward option over the medium term, obviously levereged to higher iron ore prices. Average unit price of around $2.80 and target exit price around $8 would be nice.

2. BHP Billiton BHP - 17%
The Big Australian...well kinda. Bought them on the advice of my old man and fundamentally a top stock. Dividend's a bit small considering but long term I don't think I'll go broke holding BHP. Well diversified in a lot of resource areas too.

3. Goodman Group GMG - 15%
Property trust bought at 30cents and now at 67cents. Bought in for the fundamental reason I saw upside if the global economy recovered, and remain a holder due to it paying a small but handy dividend and have already taken my intitial capital off the table so basically it's a free ride. Has been one of the worst stocks on the exchange over the past couple of years and property trusts mostly took a pounding so any sustained recovery in the area should result in a good ride from Goodman. They've got a lot of debt, though.

Bhenn said:

3. Goodman Group GMG - 15%
...property trusts mostly took a pounding so any sustained recovery in the area should result in a good ride from Goodman. They've got a lot of debt, though.

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Yeah, the property trusts are strange. They had to undergo so much restructuring during the GFC that most of them are essentially different companies now. Going to take another year, IMO, to see what they're going to look like. But with the rush to deleverage now turning into a rush to releverage, I think there's a good chance they'll come back into favour. Often good to be getting into something that everyone else hates for reasons that aren't as relevant any more...

If I was braver I'd be getting some GPT and FKP and holding on for a takeover or a serious re-rating.

Long term:

WOW - in case things turn for the worst again, people still have to buy food

BHP - I needed somewhere to park some money for the long term so I chose the olympic dam.

BEN - Well managed and I have a lot of respect for what they stand for so I am proud to give them my support.

Short Term:

SRI - With Newcrest after Lihir, I' hoping someone will notice this one. Maybe nothing will happen but I wanted to have something in gold anyway.

RVR - This is my speccy play at the moment. I bought a packet late last year for 16c and its back to the same price so I might exit soon if the current trend keeps up.

AOE - my gas play.

NVT - for reasons expressed on that thread and others.
AGO - as a result of their acquistion of port facilities.
BHP - because of who they are.

If there was a "4":

SUN - a remarkably resilient stock.

what is your top 3 stocks and reason?

Currently I am holding MTS and QBE,
Reason for MTS:
It is a stable company which was founded in 1920, high dividends and it keeps increasing since 2001, high roe(9 years average roe is 16.96)

Reason for QBE:
Low per, High dividends, high ROE (7 years average roe is 19.91).

Both of them are blue chips, and I am holding them for long term.

WOW - 9% will only stop with World domination
QBE - 12% one of the best Insurance companies around and a bargin to boot at $18.6. Excellent management team etc etc
WDC - 11% Again same as Woolies world domination of malls, excellent mgt, growth is aggressive

Rest (12 stocks) is 5-8% on average, although have added NMS (20c) at 9% which is a bit risky but hey look at that upside...

My top 3 holdings change pretty frequently.
At the moment l have
RIO
CBA
QBE

Top three are

bhp(17%) - hopefully sell alot of minerals to developing nations.

ndo(17%) - medium explorer just turned producer, bought a bit and then just kept topping up at local minimums. Have very good growth potential. market cap - $200m, estimated pe of abt 1.7 for next 2 yrs (my estimate- production from tindalo and galoc) so if they get there next target, gindara, up and running soon it could do very well. up av. 30% so far

hdf (13%)- good growth opportunities and could be a takeover target apa just keeps buying more and more, just got to crack the $1.37/8 resistance. up 25% so far

As a self funded retiree my top 3 Holdings are:

Telstra, pays very good fully franked dividends (around 9%) I also believe there will be a deal struck with Telstra and the Government/NBN and Prices are marked down far too far in my opinion. If a change of government eventuates the NBN could go out the window too which could put TLS in even a better position.

National Australia Bank, pays good dividends again (around 6%). Have been marked down more than the others for many reasons including the wanted purchase of AXA. I feel the mark down is unwarrented and regardless of whether they buy AXA or not they will continue to make good profits and pay good dividends.

STW, it is ASX 200 Fund. Covers the top 200 companies and pay a distribution of around 4.2%. Follows the XJO closely, requires no thought nor effort you just buy it and it follows the market almost perfectly.

Cheers,
Bill

Top 3 holdings are-

TRY-Every portfolio needs a good gold stock.

ASG-I/T stock with numerous fixed government contracts.

IPP-Recently loaded up on this owner of Asian property websites.


Also large holdings in FGE and UGL

Bill M said:

As a self funded retiree my top 3 Holdings are:

Telstra, pays very good fully franked dividends (around 9%) I also believe there will be a deal struck with Telstra and the Government/NBN and Prices are marked down far too far in my opinion. If a change of government eventuates the NBN could go out the window too which could put TLS in even a better position.

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Telstra has just struck a deal with the Federal Government, now I'm even more excited. Story here: http://www.dailytelegraph.com.au/business/breaking-news/telstra-agrees-to-national-broadband-network-deal/story-e6freuyr-1225881922860

Bill M said:

Telstra has just struck a deal with the Federal Government, now I'm even more excited. Story here: http://www.dailytelegraph.com.au/business/breaking-news/telstra-agrees-to-national-broadband-network-deal/story-e6freuyr-1225881922860

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Good for you, Bill.
Where do you get the 9% dividend? Have they declared a div which is significantly up on the last one?
E-trade site is down for update but the ASX website says last two divs were 14c. On a last price of $3.23, 9% would be a div payment of just over 29 cents.

Julia said:

Good for you, Bill.
Where do you get the 9% dividend? Have they declared a div which is significantly up on the last one?
E-trade site is down for update but the ASX website says last two divs were 14c. On a last price of $3.23, 9% would be a div payment of just over 29 cents.

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On Comsec it shows a 8.7% fully franked dividend at the price of $3.23, grossed up that's 12.3%. Yes the present dividend is 14c per 6 Months which equates to 8.7% P/A (not 8.7% per 6 Months).

Bill M said:

On Comsec it shows a 8.7% fully franked dividend at the price of $3.23, grossed up that's 12.3%. Yes the present dividend is 14c per 6 Months which equates to 8.7% P/A (not 8.7% per 6 Months).

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Ah, stupid me. Sorry Bill. I was indeed considering the 14c as for 12 months.
Absolutely no idea why I would do this. My apologies.
Grossed up, that's certainly a decent income and especially if you get some increase in your capital.

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

So_Cynical said:

Top 3 by portfolio weight

• TRY - Troy resources = Gold and brilliant management
• HDF - Hastings diversified fund = 14%+ dividend return (still in the trade)
• CTN - Contango MicroCap = exposure to the Micro cap sector, china growth, economic cycle etc (still in the trade)

HDF and CTN are over weight because im still to take profit from my entry's in both, and i have an average down/repositioning with CTN which makes it slightly heavier than my other open trades.

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5 Months later and TRY is still my #1 holding even thou i have reduced my TRY shares by about 30% (small profit) HDF is still at #2 as the yield so so damn good...1 more divi and ill take some profit.

MRE is #3 due to my recent re-entry (average down) that's turned out to be rather successful, yet to take profit as there's more SP upside IMO...#4 is CTN, im still in the trade and still waiting for it to come good.

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

So_Cynical said:

5 Months later and TRY is still my #1 holding even thou i have reduced my TRY shares by about 30% MRE is #3 due to my recent re-entry (average down) that's turned out to be rather successful, yet to take profit as there's more SP upside IMO .

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i hold TRY have done on and off for years.

was once a solid little miner with the lowest cash costs in the land.

i only hold a free holding these days and have found no reason to add to it of late as the storys got murky over the years.

in some kickass prospects tho and know some of the areas very well

they also have corresponding grounds with a couple of sharks that would snap them up at any given moment if they get in the way

i hold, am biased, and free hold so my circumstances will be different to anyone thinking of this far and wide buncha WA gold producers