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Companies I didnt buy

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galumay:
Sometimes its helpful to record why i didnt buy companies and what the reason was as well as a prediction.

Pact Holdings, PGH, packaging company. A brief look at the financials looked ok, but debt is 200% of equity and interest coverage only 2.2. This seems like high catostrophic risk if interest rates rise. For this reason alone I am striking this one off the watch list. Its $4.14 now, if it can radically reduce debt, or interest rates stay low I predict it will maintain that sort of price. If there is any increase in interest rates then I expect it will drop hard.

EDIT 4/16 Its SP is over $5:00 now so looks like i got it wrong! Still has horrible levels of debt.

EDIT 7/16 Its over $6:00. wronger!

1/9 still $6ish

27/1/18 $5.29

9/4/18 $5.60

3/19 $2.80 So it finally played out as I expected!

galumay:
VED, VEDA GROUP

I have looked at this company a couple of times, I just dont see the future value that others do, I decided not to buy at $2.00, looked again at about $2.15 still couldnt see where the growth was going to come from to sustain the price, now they have shot up to $2.70 based on a takeover offer for that amount. Still doesnt add up for me, but many i admire are holders.

EDIT 4/16 Taken over for $2:82 so I was very wrong again!

ICS

Another one that Tony Hansen held and sold, he got out at $1.25 and while its had a run up to $1.50 its back to $1.25 and has me looking at it again. I didnt buy because it did seem fully valued, but with the numbers from this FY $1.25 looks cheap to me.

EDIT 4/16 Ran up to $1:95 and now back around $1:50 - wrong again!!!

7/16 - $1:70  wronger!

1/9 $1.61

27/1/18 $1.38

9/4/18 $1.22

3/19 93c so maybe another it was good i didnt buy.

galumay:
SMX

Didnt buy on the 20/4/16 @ $1.67 see http://www.galumay.com.au/forum/index.php?topic=32.msg86#msg86

7/16 $1.65. but maybe...!

8/16 Now up to $2.15 from the $1.70 I started looking at this one, failed to run the FY15 numbers in my spreadsheet - I suspect i would hold them had i done so!

1/9 $1.81

late 2017 SMX was taken over and shareholders received about $1.70 + a special 10c dividend.

galumay:
Another, CAT is a leading global sports analytics company that uses proprietary technology to provide elite sporting organisations and athletes with detailed, real time data and analytics to monitor and measure athletes' fitness and skill levels; responses to specific training techniques; tactical performance; and risk of injury and safety and to assist with rehabilitation.

I have had a look at them more than once and I think it is a business with huge potential, but as its still making losses and is very new I have not taken a position. They are trading around $4 post a CR and acquisition. I will reconsider when profitibility is realised or I decide to take a speculative punt with a small position.

1/9/16 $3.80

27/1/18 $1.98 looks like a good decision not to buy!

3/19 94c my decision looks even better!


9/4/18 $1.19 This one I got right, didnt meet my investment criteria, and i resisted the temptation to buy the narrative.

galumay:
not sure if these are going to be companies i didnt buy or just ones i havent bought yet!

TNE $5.70 I have been running my ruler across this one, the metrics are outstanding, 15 years of continuous growth in earnings, dividends, ROE, revenue, etc etc. Its a straight line growing at an average of 15%. Almost no debt, buckets of cash, well run, but...and this is the 'but' I struggle with - it seems to have all of that growth and some already built into the SP. I suspect thats because my default values for 5y and terminal growth are too conservative for such a strongly growing company.

Trouble is the conservative investor in me doesn't like adjusting those values because it feels like I am just making the data fit the price!

ADA $3.14 Not quite the same quality, a bit of a cyclical company, seems to be in a strong growth phase and has some good recurring business in its services sector now. No debt, strong financials, international business. Also looks to be pretty fully priced. Although once again my assumptions about growth may be too conservative.

SXE $0.54 Finally one for contrast, wouldn't normally be regarded as a 'quality' company, in the very unloved mining services sector (where I have plenty of exposure already!), but no debt, plenty of cash, well run, diversifying from reliance on mining, and looks really good with my conservative growth assumptions!

I have been researching these 3 companies as I look for somewhere to allocate accumulated capital from tax returns, dividends and some bonds i sold.

On reflection, SXE is the sort of company I look for normally, smallish, unloved, low debt, well run and positioned to take advantage of any change in sentiment. TNE and ADA tend to be the sort of companies I have dismissed in the past - while acknowledging their quality, my conservative approach to growth assumptions have made them look too expensive.

All of these 3 turned out to be "companies i havent bought YET!

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