Woolworths (WOW)
Switzer Super Report director Paul Rickard likes Woolworths (WOW) and is looking to buy in dips. “I feel it is a really low risk investment – almost an annuity style investment – yielding around 4.1% per annum fully franked. On a relative pricing basis, I prefer WOW to Wesfarmers, and sense the sales momentum in the “supermarket wars” is shifting back to WOW.
Speaking last week on the Sky News Switzer TV show, David Buckland from Montgomery Investments also liked Woolworths. “We think the intrinsic value is about 10% higher than the current share price,” he said.
Commonwealth Bank (CBA)
The bank is due to report on Wed 12th Feb. Sentiment has turned a little negative on the banks but Rickard says don’t be surprised if this turns around following a strong report.
“Low bad debts, cost cutting and a tick up in revenue (credit growth is on the up) all point to this number coming in at the higher end of expectations. Buy in dips.”
LogiCamms (LCM)
Peter Switzer likes LogiCamms. Two people on his show mentioned it – Bell Direct’s Julia Lee and Morgan’s broker Simon Bond. Montgomery’s Buckland also liked the company and thinks it’s worth somewhere between $1.80 and $2 (currently trading around $1.36).
“Just remember it’s about $96 million cap. So it is a small cap. It is quite thinly traded, but a very well run small business,” Buckland said.
Simon Bond’s research found that it is paying a dividend of around 7%, which prompted an addition to the Switzer family SMSF.
CSL (CSL)
This is a company that is also on the Montgomery list. Buckland says that CSL’s intrinsic value is 10% higher than its share price. “We think it’s worth approximately $77, the share price is approximately $70. So again it’s a very very high quality business,” he said.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
Also in the Switzer Super Report:
- Peter Switzer: Why it’s still ok to hold banks
- Paul Rickard: Switzer Super Report portfolios slightly outperform index in January
- Brittany Ruppert: Auction numbers are low but clearance rates remain high
- Rudi Filapek-Vandyck: Buy, Sell, Hold – what the brokers say
- James Dunn: How will pub law changes hit shares?
- Barrie Dunstan: ETFs offer unique benefits to SMSFs
