Suggestions for a sound share investment

adindas

coastline If you don't want to pay there's enough out there for free with a basic registration e mail and password. Some sites give you forecasts two years ahead.

  META PLATFORMS, INC. : Financial Data Forecasts Estimates and Expectations | FB | US30303M1027 | MarketScreener

Meta Platforms, Inc. (FB) Analyst Ratings, Estimates & Forecasts - Yahoo Finance

Meta Share Price (FB) Formerly Facebook - Investing.com UK

I'm tracking a few at the moment which are oversold on a weekly timeframe chart. Earnings are forecast higher by 2023 at least and P/E's will be falling to reasonable levels. Here's some of them. Household names Next (NXT) J D Wetherspoons (JDW) and Unilever (ULVR). Smith and Nephew (SN.) and (ABF) for recovery. 

Good to hear that. Do not they limit the number of stock you see every month, before asking you to pay subscription. Many other similar sites will limit it to 5-10 each month ??

Steve182

adindas said:

Steve182 said:

adindas said:

FB (Meta Platform, Inc). '

This is just summary

No credible competitors (it has moat). Invest in Metaverse. This are the list of the 10 largest FB subsidiaries which include WA, Instagram, Oculus, Live Rail, etc

https://dataromas.com/what-companies-does-facebook-own/

Growth stock but in value Territory.

Very profitable business with a lot cash.

P/E Ratio is currently 13.61 (Industry Average for Tech Software Internet 83)

Price / Sales    4.33 (Industry Average for Tech stock Software Internet 16)

Analyst 1yr PT: US$333.16

52-week range: US$187.28 - 384.33 so potentially could be back to US$333.16 - US$ 384.33 in 1yr+ rime

Just be aware the current market (sector) rotation or sentiment which is currently against growth stock, in favour of value stock like Consumer Staples, Materials, Utility, Energy, Oil and Gas etc.

FB although in its current price is already in Value territory, and very profitable, it is still seen as a Growth stock. Not to mention, the current public sentiment against FB, bear market and market uncertainty. So it might still fall from here reaching a new low.

So it is better to buy it in a smaller chunk 1 share (or even fractional 0.5 share) at a time and when they drop further consolidating at a new low is time to add it.

I and I believe highly likely most people who are already investing, already has this stock part of their fund such as as S&P 500, VLS, etc but at the current price it is an opportunity to get it at a heavily discounted price. It could be sold again in the future when they are back to All Time High and rotate the money to similar stock which is sold at a discounted price.

I had no idea FB had such a low P/E, thanks for sharing. Stocko report below -

I just notice this Stockopedia report has a very good report layout as they present important information in one page. So save time to read it. Also they calculate the Z-Score and F-Score as well as M-Score (Earning Manipulation)

Did you pay annual subscription to get access to Stockopedia ?? From their site it says £265/year ??

The £265 is for UK only, I have US as well (that's obvious from the above of course) which takes my subscription to just under £400 as I recall. I really like the stock screening tools for comparing shares and whittling down shortlists, and the Guru screens such as Jim Slater's Zulu and Piotroski F-Score Price to Book Value Screen

Steve182

Another suggestion for what I consider a sound investment - Diversified Energy Company - DEC

I have mentioned them on this board before, but that was some time ago. 

Their revenue, profits and divi keep increasing year by year but the SP does not seem to move much. They now have a forward P/E of 5.1 and are paying a circa 12% divi. Their business model is buying operational, long life onshore gas and oil wells (mostly gas) in the US, then operating them more efficiently than the previous owners. They now have circa 70,000 wells, and they usually announce several new large acquisitions every year.

Their accounts can be difficult to understand because they hedge much of their production to provide financial stability. The hedging position can then result in a pre-tax loss being shown so that needs to be understood when scrutinising their accounts. 

It's a FTSE 250 listed US company so there is withholding tax of 15% on divis, even in ISA's (there is no withholding tax in a SIPP).

I'm just happy to hold it in my SIPP, take the full 12% tax free divi and watch the revenue and earnings increase year by year, without the stress of concerning myself with movements in the SP. This is one of my core holdings.

Stocko report below. do your own DD -

 

adindas

Steve182 said:

Another suggestion for what I consider a sound investment - Diversified Energy Company - DEC

I have mentioned them on this board before, but that was some time ago. 

Their revenue, profits and divi keep increasing year by year but the SP does not seem to move much. They now have a forward P/E of 5.1 and are paying a circa 12% divi. Their business model is buying operational, long life onshore gas and oil wells (mostly gas) in the US, then operating them more efficiently than the previous owners. They now have circa 70,000 wells, and they usually announce several new large acquisitions every year.

Their accounts can be difficult to understand because they hedge much of their production to provide financial stability. The hedging position can then result in a pre-tax loss being shown so that needs to be understood when scrutinising their accounts. 

It's a FTSE 250 listed US company so there is withholding tax of 15% on divis, even in ISA's (there is no withholding tax in a SIPP).

I'm just happy to hold it in my SIPP, take the full 12% tax free divi and watch the revenue and earnings increase year by year, without the stress of concerning myself with movements in the SP. This is one of my core holdings.

Stocko report below. do your own DD -

 

All seems good. Just about Altman Z-Score and Beneish M-score Is this a new company ??

I wonder why Altman Z-Score is showing some level of Distress ???

Similarly to Beneish M-score

Steve182

No it's certainly not new

I think I may be able to shed some light on the Z score


1st point above - It's true gas wells and associated infrastructure are not liquid.
2nd point is a positive
3rd point - I'm not sure how that can be true as all almost all their assets are in wells and associated infrastructure and almost all are operational.  On the other hand, if you consider a well will typically last 50 years I suppose they are not very productive in % terms @ ave 2%/revenue release/year?  
4th point - They will eventually have extensive liabilities for capping wells, larger than their current market cap. Circa 70,000 wells at around $25K/well from memory = $1.75bn liability! However, considering the average life of each well is 50 years that only equates to $500/year per well over its lifetime, so quite manageable I think against the revenue from the wells when you look at it that way.   

Concerning M score, I am slightly puzzled -



Gross margins on sales are actually a lot more stable than for most of their peers as the hedge much of their production to achieve greater financial stability. This hedge supported their revenues during the first 12 months of covid when gas prices plummeted, but hedging has obviously worked against them with the higher gas prices over the past 12 months. 

I don't know why the quality of the assets would be considered unstable with circa 70,000 operational low decline wells at ave 50 year life.

I'm not aware of any problems with high sales or admin expenses but I must admit I've never looked into it. 

adindas

If you are looking to add UK Bank into to your portfolio, Barclay, plc (BARC) is a good one. For US Bank Goldman Sachs (GS) is also good, imo

It is a boring company, but keep in mind, bank is expected to perform better in the coming year as the interest rate will keep going up. You could also get it now at a discounted price.

The ideal buying price is in the strong support level at around GBX159.50.

P/E ratio is 4.67. Industry Average 8.77, HSBC P/E Ratio (TTM) 10.66

Pay dividend around 3.52%

Also is currently in cheap valuation looking into other ratios such as P/FCF, P/B etc compared to the industry average

Revenue grow year after year

Currently GBX170.58 Analyst Price Target  GBX245.35.

It is a very low risk, and good Risk/Reward as the Mid January 2022 the price was GBX 217 so potentially they could easily reach that level in a few months. I own both BARC and GS stocks but certainly you need to do your own DDs to make your own decision taking into account your attitude to risk.

Steve182

My next suggestion is, IMO, almost a licence to print money. 

Caledonia Mining (CMCL)

London listed junior gold miner (AIM listed) domiciled in Jersey. No withholding tax on divi's

They own a majority share in, and operate the Blanket mine in Zimbabwe. As you can see from the Stocko report they are absurdly cheap (IMO) with a forward P/E of 4.4, a reasonable 4.2% divi and divi cover of around 5X.

They have just completed a new 1200 metre deep central shaft at a cost of circa $65m which took around 5 years to build, and was completely self funded. This has enabled them to significantly increase production, profits and LOM (life of mine), by facilitating better access to existing levels and providing future access to levels below the previous limit of 750m.

Blanket mine is partly owned by employees, local Zimbabweans and Zim govt (36%),  with 64% owned by Caledonia. To my knowledge they have never been interfered with by Zim govt, even under Mugabe.

Their AISC (all inclusive sustaining cost) - what it costs to dig the gold out of the ground, is around $900/oz. This is in the lower quartile of gold mines globally. AISC does not factor in CAPEX or debt, so other miners with similar AISC may have their profits reduced by interest and debt repayment, whereas Caledonia are cash rich.

Given that gold is now >$1900/oz, Caledonia are now making circa $1000/oz gross profit on every oz mined, and target production for 2022 and 2023 is around 80,000 oz.

I struggle to think of a better example of a cash cow.

What is the geopolitical risk?  Caledonia must consider it very low as they have just undertaken a new gold project in Maligreen, also in Zimbabwe. Previously they stated they were looking for opportunities in Zimbabwe and elsewhere. They have chosen Zim (again)

Caledonia's SP is nowhere near the level it was at the peak in 2020, but their 2022/2023 production and profits are forecast to be higher than any levels previously achieved.

Liquidity is low and there is often a large differential between buy and sell prices. SP bottomed out at around £875 in Feb but now finally looks to be on the rise. 

Do your own DD 


 

Steve182

Well I'm pleased (and also slightly relieved) that my 3 stock suggestions, PAA, DEC and CMCL are all up since I posted them, with the most recent, CMCL showing a healthy 15% gain over the past 3 weeks based on today's SP of £12.50

My latest suggestion is Atalaya Mining (ATYM). It's an AIM listed Spanish copper mine. Unlike many miners it's in a very stable jurisdiction. 

On the -ve side their Q1 22 production has been affected by transport sector strikes, so they took the opportunity to bring forward a plant closure for planned maintenance, so this disruption should not affect their overall 22 production guidance. They have also indicated that the higher electricity and diesel prices will affect revenue, which I think is another reason for the recent drop in SP.  On the +ve side they have just announced a significant increase in their resource estimates.     

It's currently paying a circa 7% divi so more or less matching inflation, with a good, safe divi cover of 2.6X and cash rich!
Personally I'm very bullish on copper and expect the copper price trend to be upward for the next 5 to 10 years.  

I'm not the only one bullish on copper right now.... 

"Over the next 25 years, the world will need the equivalent of all the copper mined since the 1400s to meet the demands of the green energy transition, the chief operating officer of Rio Tinto’s copper business has said."

Goldman Sachs -  https://www.mining.com/goldman-sees-new-all-time-high-for-copper-price-by-mid-year/

Today I sold a fairly modest amount I had invested in an S & P tracker and used it to top up ATYM 

Stocko report below. Do your own DD

Steve182

This time a large cap, Stellantis (STLA)

Dutch company, listed in France, Italy and NYSE

Copy/paste from Stocko -

"It designs, engineers, manufactures, distributes and sells vehicles for the mass-market under the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia and Ram brands. In addition, the Company designs, manufactures, distributes and sells luxury vehicles under the Maserati brand. The Company's brand portfolio also includes Peugeot, Citroen, DS Automobiles, Opel and Vauxhall."

It has an incredible forward P/E of 2.9, divi of >9% and divi cover of X3.5!

STLA qualifies for Piotroski F-Score Price to Earnings Value Screen

They appear to be investing heavily in new/green technology.

Divi's are apparently free from with withholding tax unless you're French or Italian -. 

https://www.stellantis.com/en/investors/stock-and-shareholder-info/distribution-information/2021-extraordinary-distribution.

Has a Morningstar rating of 5 stars and Morningstar rate fair value of $36

Debt free and shares trading significantly below book value.

This really looks like a bargain to me. Do your own DD



 

Thrugelmir

Vehicle manufacturers wouldn't be high up my list of investable sectors at the moment. Serious headwinds to be be overcome.