JOY and RT

October 21, 2013 1 Comment

One thing I haven’t been doing lately is writing up on stocks. That’s mainly because I haven’t found many worthy of investing in. I’ve decided to write up more of the stocks that I reject for a couple of reasons. Firstly, I am often wrong in rejecting a stock and readers may see a bargain where I have failed. Secondly, I want to take more time to monitor how my rejected ideas do over time, to see if I can improve as an investor.

This article covers two stocks which appear at attractive prices, but for one reason or another I have decided not to invest in. They may appeal to others though.

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IBM vs Oracle

October 15, 2013 Leave a comment

I bought shares in IBM (NYSE:IBM) over a year ago, not long after Warren Buffett announced he had made a large investment in the shares himself. This is one of the few investments that I have been displeased with throughout, not because the share price hasn’t performed, but because the business itself has performed far below my expectations.

It wasn’t until recently, when I took a look at Oracle’s (NASDAQ:ORCL) performance, that I realised that my thesis on IBM was wrong and the investment wasn’t as undervalued as I thought originally. It is hard to admit you’re wrong, especially when IBM’s share price has been much higher recently than it is now, but it’s the right thing to do as an investor.

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Royal Mail IPO

October 7, 2013 Leave a comment

I’ve been meaning to do a post on the Royal Mail IPO but haven’t had time to wade through the 200+ page prospectus beyond a brief glance. I have some concerns with the company in the long term and although there is a lot of hype surrounding this IPO, there are some big red flags that are putting me off.

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JD Sports (LSE:JD.)

September 20, 2013 Leave a comment

I’ve held JD Sports for quite a while, and a few days ago its latest interim results were released. The core business is doing extremely well. JD Sports stores are currently the leaders in sports fashion wear, with pretty much no competition.

But while the JD business is thriving I am not at all pleased with how the overall group is doing. The group is made up of not just JD Sports but Fashion stores like Bank, and now Blacks which is a higher end outdoor retailer. The fashion and outdoor segments have no unique selling point, are in fierce competition with all sorts of competitors and unlike JD Sports shops, they do not offer something unique to the customer.

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Emeco Holdings (ASX:EHL)

September 12, 2013 2 Comments

Emeco leases heavy earth movement vehicles to the mining sector. It is currently selling for less than what I calculate as a conservative liquidation value. Although the industry is in a cyclical downturn, Emeco continues to generate free cash flow and is well within its debt covenants. I think it is worth around book value of A$0.72, compared to its current share price of A$0.22. Under a worst case scenario and the company liquidates I think there is a good chance of investors not losing money.

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H&T Group (LSE:HAT)

August 30, 2013 1 Comment

I was back in my hometown of Sheffield last week and one thing that struck me was how the high street has changed. Rows of empty shops, new small businesses everywhere and lots of pawn shops. It made me think of a post on Expecting Value on H&T Group and so I decided to look at the business myself.

I’m not going into detail as EV already did a good job of writing up the company, but this is a summary of my thoughts on it. I like the business model of pawn-broking, and recently purchased a second hand games console from one so know they can offer good value for money even competing with the likes of Ebay and Amazon.

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CF Industries (NYSE:CF)

August 27, 2013 5 Comments

CF Industries is one of the largest manufacturers and distributors of nitrogen and phosphate fertilizer products in the world and I first mentioned it in my ‘Fertiliser Company Comparison’ article. It is currently selling at a P/E ratio of just 6.8 and generates all of its profits as free cash flow. Daniel Loeb’s Third Point has already announced it holds a position in the stock as it views it as undervalued.

Its core market and distribution facilities are concentrated in the midwestern United States (the so called corn belt) and other major agricultural areas of the U.S. and Canada. It also exports nitrogen fertilizer products from Louisiana manufacturing facilities and phosphate fertilizer products from Florida phosphate operations through its Tampa port facility. It mainly sells its products to industrial customers. It also owns a 75.3% interest in Terra Nitrogen Company (TNCLP).

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