Question: What is your view on Vocus (VOC)? It has fallen a lot recently although it has been a good share for me in the past. Does this represent a great buying opportunity or are there good reasons to sell?
Answer (by Paul Rickard): I think there are some good reasons to look at Vocus.
My sense is that you are going to need to be patient because the stock has lost some credibility with the market/analysts and it is clearly having some indigestion issues with all its acquisitions.
At circa $5.71, it is trading on a forecast multiple of 14.4 times FY17 earnings, 12.9 times FY 18 earnings. The analysts have a target price of $9.04.
Bottom line – I think it is in buy territory but because I don’t think it will be re-rated in the short term, I would probably look at an average-down type of strategy.
Question: Would now be a good time to move some money to the UK, which we will need to do at some point soon or should the pound: A$ rate get better still from here? What is your view?
Answer (by Paul Rickard): I think it is a good time to be thinking about investing in the UK. I am a long-term bull.
Some might argue that the wash up from Brexit has more to play out, but at 0.611, we are at the highest level since late 2012.
According to the charts, we did get to around 0.68 against the pound (1 Australian dollar buys 68 pence), so it is not bargain basement territory yet.
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