It’s been a bumpy ride, with stocks down 6% in September, but it’s the perfect time to go looking for opportunities and value.
Portfolio manager at Prime Value, ST Wong, says that the falling share market has hit the larger companies harder.
“A lot of offshore selling has been happening through September but a lot of it has focused on the large cap companies and I think that’s where the value has emerged,” he says.
Wong is keen on Oil Search (OSH) and Boral (BLD), both companies that had big share price slides in September but which might have a brighter future.
Oil Search might be down 6 to 7% on the back of falls in the oil price but it has also, for a long time, been developing its LNG plant as an alternative energy source.
Oil Search (OSH)
Source: Yahoo!7 Finance, 7 October 2014
“What investors are getting right at this minute is really the potential for the further scaling up of that plant,” Wong said yesterday. [1]
And Boral might be off 10% over the month of September – primarily on a poorly received financial result, according to Wong – but it is also well leveraged to housing starts and approvals in the short term and an expected increase in governments’ infrastructure spend over the longer term.
“Over the medium term, as infrastructure kicks through in Qld and NSW, Boral is quite well placed,” Wong says.
Boral (BLD)
Source: Yahoo!7 Finance, 7 October 2014
On Saturday, Peter also reminded readers that the trend is your friend…until it bends.
“Of course, if you’re a bit of a punter, you would buy. Even if you do and the market does move down again, I don’t think it will be far, given the US reaction to the Jobs Report.”
His conclusion is that we’re now very much in “buying opportunity territory.”
Paul Rickard likes Computershare (CPU). It’s one of the companies that will do well on a falling Aussie dollar as it has so much of its operations overseas and also reports in US dollars.
Computershare (CPU)
Source: Yahoo!7 Finance, 7 October 2014
And definitely read James Dunn’s article today [2] for four out-of-towner stocks that are using their regional positions as an advantage.
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.
Follow the Switzer Super Report [3] on Twitter
Also in the Switzer Super Report:
- Peter Switzer: Now is not the time to lose faith [4]
- Paul Rickard: SSR portfolio update: ‘dollar’ stocks make ground [5]
- James Dunn: Four regional gems for your portfolio [2]
- Rudi Filapek-Vandyck: Buy, Sell, Hold – what the brokers say [6]
- Barrie Dunstan: Stress-test your investments [7]
- Staff Reporter: Property buyers have eye on RBA [8]