Leigton Cuts profit forcast

AUSTRALIA'S biggest construction company, Leighton Holdings (ASX:LEI), has cut its profit forecast by 10 per cent after slashing the value of toll-road and infrastructure investments. Leighton shares fell more sharply than they had in more than a month, down 8.5 per cent to $22.26, after the group announced that after-tax profit was down 41 per cent for the first nine months of the financial year.The company said full-year profit would be about $430 million, compared with its February forecast of $480 million. Last year's profit was $607.9 million.

Keep in mind here that this is a construction company and they are going to be benefitted big by the budget. they are also looking at investing overseas. Further evidence this was "fear" forcing the sells is that analysts believe that "Leighton are a very well-managed company … given the fact that they've put on about $10 since the start of May, this isn't too bad. It wouldn't surprise me if we see this stock bounce back over the next couple of weeks."Opis Capital analyst Dean Fergie said Leighton was in a comfortable debt position and it was partly the "nature of the macro-economic environment" that these asset prices were slipping.
Worthwhile looking into as an investment.

CSR wary on outlook after $326m loss

CSR Ltd (ASX:CSR) has emerged from its worst financial performance on record unwilling to provide shareholders with guidance on its prospects in the next year because of the uncertain economic climate.

The company yesterday reported a thumping $326.5 million loss in the year to March 31 after restructuring costs, asset writedowns and the impact of the slowdown on its key building products operations. The loss represents a huge turnaround on a previous profit of $177.4 million.

CSR managing director Jerry Maycock said it was one of the worst results he had ever delivered, and passed on the bad news to shareholders by slashing full- year dividend by 50 per cent to 7.5c per share, down from 15c. The company plunged into the red after significant items blew out to $460.5 million, which included a one-time charge for asset writedowns, restructuring costs and product liability losses.

Is this as bad as its going to get ? My thought is that it will get better for this company with the new budget Infrastructure spending. There may also be a rush to build homes in the next few months with the rush to ensure people take up the first bome buyers grant.

Good Luck

Back ...

Well its been a while but the market is back to a spot where we can start looking at it fundamentally again.

There are lots of stocks out there that need to be looked at so I'lls tart looking through the news again.

Good luck

Melbourne Cup selections

Well I know I haven't posted in a while but that is becasue I have been concentrating on my other hobby which is horse racing. There are good parrallels between the two topics of sharemarkets and horse racing.

Anyway I thought I would post my selections here :

Zipping and Master Oreilly are going to be hard to beat. Princess Coup is my other selection. I suspect it will be one of these horses who takes it out.

Throw in Gallic and Purple Moon and Tugsten Strike for the exotics.

Good Luck

Do you believe it can happen ?

According to NLP (Neuro Linguistic Programming), your behaviours in an activity are affected by the beliefs and values you have associated to it. As an example, say you want to become better at public speaking (behaviour) and you take some classes, but despite all the training, deep down you don't believe you are any good at public speaking, then when it comes around to standing up to speak, your body will respond to your beliefs and your voice will waver, etc. Then, when you get some feedback, you'll filter it through those beliefs, e.g. if there are two people both of whom are equally talented but one has the belief that they are a great public speaker and the other that they are not, then if they both get told that they are really good, one will believe it and use that comment to reinforce their belief further, whereas the other won't believe it and will probably find a way to use it to back up their belief that they are not.

This is all well and good but what has this got to do with Stock market trading? Well, part of your success or failure is related to the beliefs you have. If you don't believe that you'll ever make a profit or successfully trade at a new level of outlay then you will find a way to make that happen. This is where self sabotage appears. Where you do something stupid, knowing it's stupid, but do it all the same. NLP offers lots of processes for changing beliefs but sometimes, just realising that a false belief is present, can help bring it to the surface so you can start breaking it down and challenging it.

Ideally, this is why you find those who succeed are full of confidence. they had the confidence before they began and that is why they succeeded. If you are not confident then you need to work out a way that makes you more confident in your trading. That may be trading at a smaller outlay. For example instead of $20K per trade try to use only $2K.

Good luck Investing.

Short Listed Companies for Consideration

here is a List of a few companys I think people should take a look at :

ASX: KRS - Kresta Holdings Limited running at a PE of 9.11. Current Prince 30c.

ASX:MCP - McPherson's Limited running at a PE of 9.57. Current Price $3.23

ASX:RHD - Ross Human Directions Limited running at a PE of 9.52. Current Price 60c

ASX:AHD - Amalgamated Holdings Limited running at a PE of 12.67. Current Price $6.59

ASX:CMV - CMA Corporation Limited running at a PE of 9.99. Current Price 50c

ASX:MXI - Maxitrans Industries Limited running at a PE of 12.09. Current Price 61c

ASX:LAU - Lindsay Australia Limited running at a PE of 10.76. Current Price 26c

ASX:TBG - Tutt Bryant Group Limited running at a PE of 11.32. Current Price $1.75

These companies passed my initial filters. From here each needs to be examined to see where it is going in the future, the debt/equity level, etc. But it is a good starting list.

Good Luck

The US sub-prime mortgage crisis has prompted the Australian Government to consider tightening regulation of the nation's lenders. A parliamentary committee has identified a need for stronger regulation of the lending sector, to ensure that predatory lenders do not cause a liquidity crisis in Australia. The committee has recommended giving the Australian Securities & Investments Commission the power to prosecute predatory lenders who prey on vulnerable consumers. The mortgage industry has welcomed the proposed changes, however the Financial Services Union has some concerns
Someone has to stop people lending money to those who can't afford to pay it. But it is the consumers fault in the end and I don't think we can lay blame on the lenders. Consumers should know whether or not they will be able to afford the mortgage they are getting into, I don't like the current "victim" mentality around the place that a lot of borrowers are taking.

It is their OWN fault if they did not anticipate interest rates rising.

This has caused so much instability in the market there may be a few good buys out there but they are still few and far between.

Good luck

SIMS to explore offshore

Australian scrap metal recycler, Sims Group, is discussing opportunities for overseas expansion. The company provided no details on discussions with prospects in Europe and North America. On 17 September 2007, it said that profit for the first quarter of 2007-08 was not likely to be above $60 million, a decline of 12 per cent. It expected strong metal prices to lift profit in the second quarter. Its share price fell by $A1.13 to $A32.01

SIMS has a good dividend yeild but is still overpriced at a PE of 16. I would not count of the earnings being lifted on supposed Metal price increases as they should have done much better this quarter with the curent prices. They are worth watching with a possible buy around $25.00

Good luck

Optus Is flat but is the outlook better ?

Singtel Optus has forecast flat earnings in spite of growing sales. On 17 September 2007, Optus predicted that sales growth would be between 2.5 per cent and three per cent in the year to 31 March 2008, above the industry average of about two per cent. EBITDA fell by 2.4 per cent to $A1.99 billion in 2006-07 and Optus does not expect to exceed this figure in 2007-08. Margins are declining because of the preference of mobile telephone customers for capped plans.

Is this going to be a longterm problem for optus ? My guess is no. they are building their customer base and although EBITDA fell this is an industry wide problem. the phone industry can be a hard place to make a few dollars but in order to reduce overhead costs you need a large customer base on which to spread it. Longer term optus has a good outlook in my opinion.

Rio mine to go ahead

Rio Tinto (ASX:RIO) has gained environmental support for an iron ore mine in the Pilbara in Western Australia. In March 2007, the WA Environmental Protection Authority rejected the resources company's plans for a $12 billion mine because of the risk to troglofauna. However, the WA Government directed it to reassess its decision. On 17 September, it gave clearance for the project. Rio Tinto will enlarge the mining exclusion zone so that more troglofauna habitat is protected. The decision has disappointed the WA Conservation Council.

It shows what a bit of money can do. The WA government will get a lot more revenue from this going ahead and therefore asked for it to be re reviewed. It must be said this is both a ethical and environmental issue and there may be a slight backlash to the go ahead.

But when you look at RIO you can't be disappointed with their return to shareholders. RIO is a stable resource company and while at a PE of 14 is a bit expensive, it is always worth watching this share

Channel Nine slow on uptake of Digital TV

Nine Network Australia has refused to disclose when it will launch a new high-definition digital channel. With Seven Network and Ten Network rolling out such new services in December 2007, Nine suggested it is making progress with a new high-definition offering, but said it has no announcement to make in regards to the issue. Goldman Sachs JBWere analysts said with ageing broadcast infrastructure, a limited number of quality programs and strained relationships with its broadcast partners, Nine is unlikely to immediately follow Seven and Ten in launching its digital channel

Nine is falling behind in the stakes to get the digital audience in the future. When you look at it, this may affect major contracts such as the Rugby league as these institutions will look for those companies that can offer the most to the viewers. This can only be seen as a negative for a company that is in a cut throat industry.

babcock and Brown Reorganisation

Australian investment bank Babcock & Brown (B&B) has announced a reorganisation of its assets. Babcock & Brown Wind Partners (ASX:BBW) will acquire control of more than 750 turbines in the US and Portugal from B&B for around $600 million. CEO, Miles George, said the transaction will reduce the impact of regional wind variability on its performance. The deal resulted in BBW upgrading forecast payouts to security holders by 16% to $0.145 per security in 2008 and $0.155 per security in 2009.

Anything that can stabilise the returns from a company has to commended. but was it worth 600 Million. In my opinion I can't justify the cost. But investors appear to have taken to it.

This company is heavy in debt and would be much better using the money to get the Debt to Equity ratio down to a managable level.

The only good thing I can see about this company is the dividend yeild is at 7.9% but this won't hold if they keep spending money.

Good luck.

Ross Human Directions Limited - BUY

Hi everyone,

My next purchase since JUM has been Ross Human Directions Limited (ASX:RHD).

The reasons I bought this stock include :

Technical bowl poattern forming in chart.
PE ratio is at 8.6
PB ration is under 1.5
PEG ratio is 0.5
Dividend Yeild is 7% fully franked
PS ratio is 0.16 ( Price to Sales )
EPS are forcast to grow by more than 10% for the next few years
The price is under $1.00
Debt levels are at maageable levels (29%)

Also they have had record profits recently.

I got into this share at 62c but I would suggest it is still a good buy up to 65c.

Of course this is just what I did and is not a recommendation that you buy the share as I do not know your financial position :) ...

Good Luck.

JUM - Taking Part profits

I sold out of some of my JUM stock today (ASX:JUM).

The reason was that it has risen quickly from 2.3c to 3.2c. That is a huge gain for just a few weeks investment.

I have taken profits out of the stock as I don't want to lose these huge gains. I am still invested in the stock but not as much as I was yesterday.

Good luck.

Record breaking day

Rio Tito (ASX:RIO) hit the $100 martk yesterdeay in what was a historic day for the ASX.

Its the first share to make that price and although it slipped back before the close it was still a record breaking day.

RIO has been spurred on from the resources boom.

Mind you there are a number of other shares which could have hit that mark already had it not been for share spilt. Harvey Norman (ASX:HVN) comes to mind.

Good luck

KME and WAL lead portfolio in poor day on market

I bought KME today.

While this has been a selection of mine for a while (bought in at 81c) I think now is a good time to top up the account. The PE is currently sitting at 16 which is high for stocks that I purchase. But the federal budget incentive plus the long term uptrend say this is a raging buy.

I bought in today at $1.395.

Another share which I am still raving about is WAL. I initally bought in at 22c and bought more at 20c and then 17c. It has returned to 20c and I am showing a small profit. When this company decides to do something with the cash it could be a big mover.

Good luck.

Another Great investment at only 2.4c (well I think it is)

I found another share which I just bought into on Monday.

The share is JUM.ASX

It is an interesting company that makes its money from gambling ( so no good for those of you who don't like gambling stocks). There were 2 big draw cards for me with this stock. The first being the amazing run of record profits. The second being a wise investment by management to buy back up to 10% of the shares on offer. This will greatly improve the EPS.

Another big draw card was the low cost to get into this share. It is only 2.4c

The price earnings is sitting around 10 so it is not overvalued at all. Combine this with record profits year to year and you have a great share. This one reminds me of my (still current) investment in ASU. This stock has potential....

Good Luck

WAL - Wavenet

I found a company worth buying because of a number of reasons.

WAL.ASX - Wavenet is a very special buy.

When you look at the company you will notice several things.

1. The company has 9.4 million in the bank.

2. The company only has a capitalisation value of 10 Million.

These two lines should signal something straight away.... They are worth only $600,000 more then the money in the Bank. This is made up money, this is actual money in the companies bank account.

Lets have a look at their reports and we see that the first half of this year they produced a profit of 1.3 Million. Lets assume they make a profit of 2 Million for a full year.

So now we know

The company is worth 10 million.

The companies has 9.4 million in the bank.

They are going to make approx 2 million a year.

Does this not scream takeover opportunity. Someone could buy this company for 15 million, and pull out 9 million from the companies bank account (so effectively they have bought the company for only 6 million). They then own a company producing 2 million a year which they bought for 6 million ( that's a return on Equity ROE of 33% ).

Of course I have simplified the maths above and I assumed a takeover premium of 50%. Lets say the takeover premium is only 20% and you find the Return on Equity increases to 66%. Even for a respectable return on equity of 10% the company could be bought at a premium of only 100%.

The other option for this company is to use the money for an acquisition. Regardless of what happens the share price is going to move and its only going to move one way for this under priced stock and that is UP.

Good Luck.

Where have I been ?

Sorry to all those who ahev been waiting for me to post but I have been really busy.

Lucky for me my portfolio has continued to shine and is up a good percentage this year again.

I will try and get posting again on a regular basis as I find shares worth metioning.

Good Luck.

End Of Feb Portfolio Update

Once again sorry for the lack of updates. I just have not had the time to post anything but I have kept in touch with the market. There has been some significant movement in the sharemarket recently and I just realised I have not put up the End of Feb figures for the portfolio.

Positions Changed:
None

Current Position:
RHD Bought at 65c now trading at 69.5c for a PROFIT of 4.5c (7%)
SCV Bought at 80c now trading at 77c for LOSS of 3c (-4%)
FEA Bought at 63c now trading at 71c for a PROFIT of 8c (12%)
CKL Bought at 59c now trading at 51c for LOSS of 8c (-14%)
MCP Bought at $2.65 now trading at $2.93 for a PROFIT of 28c (10%)
ASU Bought at 3.3c now trading at 3.1c for LOSS of 0.2c (-6%)

Portfolio
Cash : $51,066
RHD : $10,692
SCV : $ 9,625
FEA : $11,269
CKL : $ 8,644
MCP : $11,056
ASU : $ 9,393

Total : $111,745

Monthly Performance
Month 1: Profit of $4,688. Annualised this is a gain of 56%.
Month 2: Profit of $6,844. Annualised this is a gain of 78%.
Month 3: Profit of $ 213. Annualised this is a gain of 2.5%.

Closed Trades :
ITD Bought at 41.5c SOLD at 57.5c for a PROFIT of 16c (38%)
AVE Bought at $2.19 SOLD at $2.65 for a PROFIT of 46c (21%)
MPH Bought at $0.225 SOLD at $0.34 for a PROFIT of 11.5c (51%)

Commentary
It is very hard to find profitable stocks even thought the market is very volitile and is falling and rising every few days. I am happy that February ended in a profit although had I been watching it more closely I would have been out of a few stocks with a much higher profit ( we could have ended the month up around 4-5K). Anyway I still think these are the stocks to own and I will be holding them till a later date when I feel the are overpriced.

Good Luck Investing.