Fundamental Analysis

3 non-bank financials to watch

Considering what has happened to financial markets since the Great Financial Crisis, it is no wonder many investors hang up the phone when their advisors begin talking about possible value plays in the investment and financial services group. With a constant barrage of worry over Tier 1 capital ratios, Basel II ratios, sovereign debt exposure,…

Strategy that finds value stocks before they soar

A little known accounting professor in the US has stgised an 8-step stock picking technique that boosts median returns by 7.5% each year, according to his research paper for the Journal of Accounting Research called “Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers.” You can access it here. Joseph…

Is a falling copper price the canary in the coalmine?

As a resource driven economy, Australians are justifiably concerned when commodities of all stripes take a dramatic turn southward.  While the price of iron ore is of greatest concern here, experts have long maintained that the base metals – copper, zinc, and aluminum – play the role of canary in the coal mine.  Of these,…

How to value a share like a company analyst

Generally speaking, investors want to buy shares at prices below their “true value”, because that way the chance of a fall is less and the opportunity for making a capital gain is enhanced. Gains can come about both if the share price then rises towards to its “true value” and as the “true value” itself…

Cheap stocks now to time the recovery

Every downturn provides opportunities for the value investor.  Stocks that are solid performers get sold along with everything else and tainted by association if they are in an unpopular sector. The basis of value investing is to find good companies that have been underrated or overlooked by the market.  But identifying value can be tricky. …

A recession-proof stock

By Guy Carson, Clime Asset Management Beginning with the takeover of Foodland in 2005, Metcash Limited (ASX:MTS) has continued to establish itself as the significant third player in the Australian grocery market with 19% market share (See Figure 1). Its 2009 results released last month further emphasised its significant position within the market and reaffirmed…

Shareholders face cuts to dividends

Analysts say shareholders in Australian listed companies could suffer a 28 per cent cut in dividends from a likely 17 per cent slump in earnings for 2009. But 2010 could deliver better returns than the market has priced in, peppered with a raft of takeovers as stronger companies are pressured into working lazy balance sheets…

Charting the recovery

If the majority of Wall Street economists are right, the U.S. recession will end this quarter and the global recovery won’t be far behind. On Wednesday, the International Monetary Fund is expected to nudge up its forecast for 2010 global growth from the current estimate of 1.9 percent, primarily because fears of a more serious…

Economic data to diverge during downturn

If history is any guide, Australia’s recovery from recession will be characterised by the same contradictory signals that accompanied the downturn. There will be sectors and regions heading in different directions. As housing recovers in response to pent-up demand and improving financial conditions, engineering construction will flag under the weight of the deflated minerals boom….

A simple method for finding dirt-cheap stocks

We often want to buy a stock on the cheap – and to do this we need to find how much the company’s shares should be worth. But how do you know if the current share price is too high or too low? There are many valuation methods around that attempt to calculate the ‘true’…

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