ASX Shares Newbie moving back into ASX - pick thoughts?

i split mine almost 50-50 down the middle.

50% in large cap like index and csl,coh,mcq (buy park forget)

then 30% in small cap or spec. lol.. a2m etc.

20% is to gamble lol

 

I did not use the dividend to calculate COH's yield. I used their projected operating cash flow and/or accounting profit for 12 months based off ther half-yearly report (simply doubled the HY result) which is a yield of ~2%. Put another way it's a cashflow multiple of ~50 or a PE ratio of ~45.

There's no doubt it's a great business, but I don't see the value buying.

Put another way, who would pay $5,000,000 for the cafe on the corner that makes $100k a year in profits, with promises of growth of 20% per annum for the next 10 years?

I realise the cafe on the corner can't be compared to cochlear, but the point is the numbers are just silly. The growth is priced in.

Buying at that kind of price leaves a lot of capital downside should growth be lower than expected.

 

I prefer to focus on cash flow so I can value the company as a whole and consider capital gains as well as dividends.

If we assume COH's interim dividend is doubled for the year and results in a $2.80 dividend for the year it's $3.97 grossed up with franking credits and yields 2.33% on $170 purchase price.

If we assume their dividend grows at 8% p.a for the next 10 years it will be $8.58 grossed up with franking credits which is a 5% yield on $170.

What if in the next 10 years interest rates go back to their long-term average of 6-7% and people can get 4-5% in a term deposit? The share price will be lucky to remain at $170. There is downside risk to the capiral component that valuing the income alone ignores.

If I can invest my money in the index and return an average of 10% a year for the next 10 years, that's a better outcome
than cochlear growing their dividend at 8% p.a IMO.

 

Agreed - which is why I have set my "buy" price, but the current cost is way to high atm so haven't bought any yet. CSL is also way to high - and waiting for BHP to come down another couple of dollars before stepping in

 

dont u buy shares on future performance not past ? so the price you pay today is compared against future/expected gains/returns

 

It’s probably best to get your own figures correct prior to giving stinging appraisals of other's stock selections.

It would be closer to 7 – 12%.

They are looking at between $240-250 million, I couldn't understand the share price if your assumptions were correct.

 

What is 7-12%?

$240-250 million what exactly?

Net profit for HY was $110 million. Double that for $220 million for full FY.

Net operating cash flow was $92 million. Double that for $184 million for full FY.

Market capitalisation is $10 billion. Doesn't matter which one you want to use, it doesn't take a genius to work out that's a ~2% return and all the growth is priced in.

 

Yep - doesn't mean you deliberately overpay

 

that is true ..

 

Conservative growth @Lizzie

 

Hi just wonder how you are preforming at present.
Did you end up buying any LIC's

Reagrds
Len

 

Didn't end up buying ... but do regret my blackmores ... and wish I'd spent everything on fmg.

Hindsight is a marvelous thing

 

FMG probably up 5x since Feb 18 plus over $1 in divis.

 

Did you buy any stocks or index in 2018? Your hubby would be 60 now so could have pension access to SMSF too. Since it was around 4% I thought you would have?
Wondering if you plan to keep accumulating or not for the next 10 year or so?
My spouse will turn 60 this year too but we are still in accumulation phase as I have few years to go. Although I feel partly retired for the last 20 years or so working from home.

 

Stocks direct - hubby also have an index fund with work (that we roll over every few years into the SMSF).

He's just turned 60 (end June) so took out both 10%'s for 2020/2021 to pay down some external debt - mortgage on a property that we'd rather have simply rolled into the fund, but that's not allowed due to some other goose in the past abusing the system.

He's wanting to properly retire at the end of the year and it's making me nervous ... we've finished accumulating - are currently in consolidating mode (some properties will be shed and mortgages paid down) - and then retire on slightly less than current take home pay, but with significantly less expenses (ie, private school and horse agistment)

 

Only to a point, I guess it depends what is substantial, if average exists it is a minority. A small retail investor doesnt have a mandate on what or when they buy, they can buy at a more opportune time and without moving the market and buy more cheaply. If they are buying regularly in small tranches they can be more selective when they buy what, to balance more cheaply. Generally they would start with the highest weighted stocks ( highest conviction) and build from their. The brokerage could be insignificant compared to savings in management fees, acquisition price and oportunity cost in delayed redemption.

 

Makes me think what some of those green smoko stocks will be worth when that industry gains traction again as some are 0-030 range ..500000 at 0_030 ..imho.CPH ..

 

Hmmm .....my appetite for $ has been whet....throw a lazy 15K on that one.? Could be a good harvest.

 

The numbers add up I guess just need some positive media spills .. looking forward to the AGM just hope they have some products on display and a few bucket xxxgs

 

I wonder if you can BYO to the AGM lol.