I will be starting a trade post after x mas, possibly before..
I intend to focus on value stocks a la Graham. At the moment, I want to examine a couple of mid-value, probably mid-cap stocks which may be slightly out of fashion.
After all, ASX is dominated by financials and resources. But are these overvalued?? I think the question is worth exploring, and I may compare, as a recent Australian Shareholder Association presenter did, some stock like BHP.
THE STOCKS I WILL BE FOLLOWING ARE: DOMINOES, RAY'S OUTDOORS, BLUESCOPE AND COMPUTERSHARE.
As you might have noticed, Bluescope is a strange value choice - it was once a "hot" stock - but I think it is trading at a bargain discount. However, I will examine all this in future trading posts.
Of course, I cannot, and am not, offering stock 'tips' or advice.
Through these coming posts, I will explore each companies annual report, their reported debt, P/E ratio, relevant Graham 'intelligent investor' criteria, book value, divident payout ratio and consistency and strength of earnings, etc.
WHY I LIKE THESE STOCKS
Prima facie, I think these stocks meet several value criteria and offer good growth prospects. Should I be proven wrong, I would naturally have to update my log and my list.
I believe these stocks cross a range of economic sectors, with strong past performance and are somewhat akin to 'dog' issues due to mania elsewhere. Moreover, the market may offer unique opportunities with the sovereign debt crisis to capitalise on bargain issues. Companies will likely seek to consolidate and retire outstanding debt and increase, I assume, debt service capacity to meet interest obligations in a difficult climate.
Yet if I follow Graham's injunction against speculative excess, it may become a case of Graham's 'I don't care what you do, Mr Market'.
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So, on to the search for value...
