Longer horizon Equity Investing. (Group + potential meets)

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Hi All,

I'm looking to form a small group (around 6people at most) who have a passion for Longer horizon Equity Investing. (1 + years) It could be in any markets around the world.

Most suitable for

- People who are fairly new to Equity investing- but keen to learn more/share knowledge/develope their existing knowledge.
- Ideally people should have a strong interest in small/mid sized companies( simply because there is a far larger potential return on your investment.
- Interested in reading accounts, or analysing investment ratios.....but more importantly determined to learn how to read accounts properly. (In short a willingness to use Fundamental Analysis)
- Would be great if people have read books by Benjamin Graham, Anthony Bolton, Peter Lynch, Warren buffett, Phil Fisher (Essentailly some Grounding on the ideas behind value and growth investing would be handy).

To start with PM me if you are interested.

My criteria isn't stringent but I just want people to be on the same wavelength, as Investing and trading are two seperate things. Furthermore within Investing there are so many different products to Invest in. I want to cut out anything unrelated to the title + those who are very technical analysis focused.


Thanks

C
 
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Hey Umart,

Good to see a Ben Graham fan too. Have you read anything by Peter lynch I find his strategies very good too.
Do you have a portfolio at the moment, and if you are looking to buy, which companies are you looking into at the moment.
Once you have named a couple we can share ideas, on the relative benefits/costs of that company.
I have one i've put on if you like "a watch list" its a large cap which you may have heard of..... national grid.

Utilities tend to have a high level of debt, but that is typical in this industry, and it is sustainable due to its continuos profits and cash flows. But with a market to book of about 4.5 is it still far to overvalued for investment despite its 7.5% dividend yield, and having fallen a good 35% since its peak? Relative to other utilities it appears to be......
 
Hi,
how are you doing in these wonderfully tricky markets?

I read Peter lynch's One Up on Wall Street. The principles are similar to Jim Slater's Zulu Principle as they are both using PEG ratios fro growth stocks. Slater likes to concentrate his portfolio. Lynch bought everything.
Yes, I'm running three portfolios: a personal UK portfolio, a world portfolio (Fund A) and a special situations fund (Fund B).
Fund A has Cineworld, Cranswick, Portmeirion, PGE (Poland), Bombardier (Canada), Alstom (France), UK 2015 Gilts and a few other smaller equity positions.
Fund B has Carpathian plc, Walker Greenbank, Portmeirion, RC2 and Healthcare Locums.
The personal fund has a few of the above and today's acquisition Lok n Store Group.

I haven't looked at National Grid in any detail. The last UK utility I looked at was Scot & Southern, as they were expanding in Ireland through their Airtricity brand and they were well managed. I found that they were fairly priced. The dividend yields on the utilites are certainly worth looking at. If you believe in inflation due to QE in the uK then they are a good inflation hedge, providing the regulator is fair. The only utility I have is the PGE stock, which is Poland's largest power company. I was looking at a number of European players -CEZ, Fortum (both are extremely effficient) and E.ON in Germany (looks fundamentally very cheap, but will now have to pay a tax for nuclear waste disposal).

I look at market to book for most stocks I invest in. If it is 4.5 times, then I would be hoping for an ROE of at least 45%. The 7.5% dividend yield is attractive, but I would not bet everything on one stock paying a high dividend yield, e.g. BP was the largest holding of all UK income managers.

Another very cheap European electricity company is the German RWE. It would also have a high dividend yield and everything looks cheap, but they have to spend a lot on an aging infrastructure as it has broken down a lot in recent years and they are under a lot of public and political attack. If National Grid also has to upgrade then future cashflows will come under pressure and the dividend would be in danger.

Speak to you soon,
Umart
 
Umart32 said:
Hi,
how are you doing in these wonderfully tricky markets?

I read Peter lynch's One Up on Wall Street. The principles are similar to Jim Slater's Zulu Principle as they are both using PEG ratios fro growth stocks. Slater likes to concentrate his portfolio. Lynch bought everything.
Yes, I'm running three portfolios: a personal UK portfolio, a world portfolio (Fund A) and a special situations fund (Fund B).
Fund A has Cineworld, Cranswick, Portmeirion, PGE (Poland), Bombardier (Canada), Alstom (France), UK 2015 Gilts and a few other smaller equity positions.
Fund B has Carpathian plc, Walker Greenbank, Portmeirion, RC2 and Healthcare Locums.
The personal fund has a few of the above and today's acquisition Lok n Store Group.

I haven't looked at National Grid in any detail. The last UK utility I looked at was Scot & Southern, as they were expanding in Ireland through their Airtricity brand and they were well managed. I found that they were fairly priced. The dividend yields on the utilites are certainly worth looking at. If you believe in inflation due to QE in the uK then they are a good inflation hedge, providing the regulator is fair. The only utility I have is the PGE stock, which is Poland's largest power company. I was looking at a number of European players -CEZ, Fortum (both are extremely effficient) and E.ON in Germany (looks fundamentally very cheap, but will now have to pay a tax for nuclear waste disposal).

I look at market to book for most stocks I invest in. If it is 4.5 times, then I would be hoping for an ROE of at least 45%. The 7.5% dividend yield is attractive, but I would not bet everything on one stock paying a high dividend yield, e.g. BP was the largest holding of all UK income managers.

Another very cheap European electricity company is the German RWE. It would also have a high dividend yield and everything looks cheap, but they have to spend a lot on an aging infrastructure as it has broken down a lot in recent years and they are under a lot of public and political attack. If National Grid also has to upgrade then future cashflows will come under pressure and the dividend would be in danger.

Speak to you soon,
Umart
Click to expand...

Any more ideas?
 
About a month ago, I placed some money in BP. I believe it had, and as it has shown a good chance of showing a capital gain. A lot of fear burst into the market when news about BP Came out. Yes it was a major disaster, yes it will cost billions, but for the market cap to fall by more then 50% and take it book value below one....seemed overstretched. Some of the assets BP has sold off, has in fact sold for more then its shown in the books, Thus the real value possibly exceeds book value....and for it to be below one provides some level of margin that yes the company was at the time undervalued, and still possibly is. The Dividend will not be back immediately but give it a year or so and it should be back. Remember BP did pay 10billion in dividends every year. This oil spill has had a flurry of estimates but even on the upper end they predicted 25billion or so, its a figure that can be reached without a massive meltdown. They have already made a good move by not paying dividends. Furthermore, BP released their quarterly figures and they have already made a massive provision for the cost, thus the share price reflects all that has currently happened...but it isn't or doesn't seem to be accurately representing the future for BP.
So that's my opinion with BP.... The risk still lies with whether the current cap is good enough. or whether there is a risk of a further spill. Furthermore....noone truly knows the cost although unlikely the cost could far exceed the current high end estimate.
Taking into account everything the pros outweigh the cons....which is why I believe BP offers modest capital gain with a fair value share price of around 500-550p, and a healthy dividend in the future (at least 1 year from now).

What is your opinion on BP?
 
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I had the same discussions with my colleagues in early June. My opinion then was that
US Politicians were ganging up on BP and that this would go on for some time. The litigation in the Exxon Valdez case lasted 20 years and this will be similiar.

However, we are in new territory as to the effects. We have rarely had an undersea leak of this magnitude. The Exxon Valdez and Amoco Cadiz (remember that?) were leakages on the surface.

Thankfully for BP the leak has since stopped and the Hurricane season, which started on 1st June, has passed without doing extra damage.

3 months ago oil Veteran Boon Pickens said that people were expecting the relief
well in August to be an immediate success and cited an example of another underwater leak where it took three attempts at the relief well. However, about a month ago Pickens said that it was time to buy BP again, so he seemed to be agreeing with you.

BP did cut the dividend then there was clearly an outflow from the UK Income Funds.This was the explanation for the FT's mindless claim recently that the FT100 ex-BP had performed well. So much for common sense!

I believed in June that the best way to play this was to find an oil stock which had fallen in sympathy with BP, but which had no Gulf Exposure. I cannot see myself buying BP as the business is not very well managed and has too many board members, who are not oil people. Well done to anybody who has timed the buying of BP stock, but it is not my type of company.

That said, the leakage did show one thing. BP are sitting on a very big oil field. 60000 bpd is huge. In fact this leakage produces more than most quoted oil companies.

Another thought - I like John Wood, although it's a bit out of my price range. It was interesting to read that they could become the specialist consultants for future undersea disaster recovery situations, including the development of capping devices.
 
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Yes you are quite right about BP. I've always had a bit of a problem with the management, especially with now EX-CEO Toni Hayward, who I felt handle the situation TERRIBLY.

Since I have capital to allocate, I felt some allocation to BP appeared reasonable....and that there was a sufficient margin of safety considering the price I bought it at, it is in my (Portfolio A)- Which consists of Global, solid blue chips, which are considered more dividend plays rather then capital gain plays, having said that I scaled into GSK and Vodafone last year at a very good price, and did a similar thing with BP this year.

My Portfolio B is currently the more volatile one, where I am trying to identify AIM and small cap companies which I feel have the potential to make it big. I am gearing my approach to a buying a portion of a company and holding it forever. The approach i'm trying to use involves Peter Lynch ideas in combination with buffett/graham. Recently I have been trying to find opportunities in the alternative energy sector but have yet to find one. (Have you found anything on this side of things).
 
Investing in cinemas has shown itself to be recession-proof in the past. Even the legendary Joe Kennedy made part of his fortune by investing in cinema chains.
Although last week's interims were confused by 27 week comparatives vs. 26 weeks for H1 2010 and some exceptional provisions, we think there is still a good investment case for Cineworld Group plc.
Please see the following link for the full article:

http://bizcovering.com/investing/a-recession-proof-investment-cineworld-group-plc/
 
Umart32 said:
Investing in cinemas has shown itself to be recession-proof in the past. Even the legendary Joe Kennedy made part of his fortune by investing in cinema chains.
Although last week's interims were confused by 27 week comparatives vs. 26 weeks for H1 2010 and some exceptional provisions, we think there is still a good investment case for Cineworld Group plc.
Please see the following link for the full article:

http://bizcovering.com/investing/a-recession-proof-investment-cineworld-group-plc/
Click to expand...

Thanks for this, I have been looking into GAME group recently.
 
Evolution securities said cineworld should be a growth stock not an income stock and it went up 4.8%. To find value stocks I stumbled upon www.sharelockholmes.com ,best uk stock screener I have seen and very reasonable.
 
Hi,

What has been your experience of the advfn website. I currently use this for screening,it has an extensive list of ratios which you can use to screen stocks.
However I have had a couple of problems in the past especially when you have the share price reported in pence, and the balance sheet is shown in $. The ratios become distorted. For some stocks Advfn doesn't even bother including the comparative figures for earliar years.

Here is the link

http://www.advfn.com/p.php?pid=adv_search&symbol=L^VOD

Regards

C
 
Thanks for the advfn link. International comparisons and currencies can always be tricky. My experience with filters is that you should only use them to screen or narrow a large universe down to a manageable range of possibilities, but that you have to do your own detailed fundamental work on the reduced universe to before you can really invest money in it.

I have looked at three stocks over the last three days. There is no substitute for bottom up analysis.

http://bizcovering.com/business/rai...nfidence-at-british-polythene-industries-plc/
http://bizcovering.com/business/a-recession-proof-investment-sausage-maker-cranswick-plc/
http://bizcovering.com/investing/recession-proof-cineworld-group-sees-good-news-in-3d/
 
I thought I'd kick start this thread again, with hearing some opinions on what they think of the sharescope software. I am currently looking for a program which will assist me in undertaking very thorough Fundamental Analysis.

Is Sharescope fairly restricted in terms of Financial ratio's i.e would it have options for tailored ratios , or ratios such as Altman's Z score, or Tobins.
 
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