Graincorp continues to look like good buying given that the Australian Wheat Board just reported a good profit, and the industry had a good season. Of course with the Aust currency so weak most of the profit will go to growers, which is why I recommended food producers some time ago. AAC was another one. I will take a look at some NZ food producers in coming weeks.
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Andrew Sheldon www.sheldonthinks.com
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Sunday, November 30, 2008
Sunday, October 26, 2008
Graincorp - at support - a good buy
Looking for a great stock in the rural sector. How about a stock that does well no matter how the economy is fairing? Well consider that companies make money in different ways. Some pay a price for meat or metal which is subject to volatility. Others make money from commissions. Well think of Graincorp because in bad times you and foreigners dont stop eating. Better still, when you are a starving peasant in Asia, you first eat your own food, then you eat cereals because they are cheaper than meat. Rice is the staple in Asia, but other cereals are growing, such as bread, pasta, etc. Pasta and noodles are cheap and easy to store. Bread gets mouldy.Graincorp makes a profit margin for transporting wheat (dry bulk cargo) to the ports. Its a good season this Spring so expect a good return from this company. There has been good rains across Eastern Australia. The stock has of course fallen with other equities turmoil.
The stock is a technical buy as well, having fallen to support. See the attached chart.-----------------------------------------------
Andrew Sheldon www.sheldonthinks.com
Stock picks for dad's in a chilly market
So what am I recommending to my dad today?
Really the only things you should be buying are
1. Food - Australian Agriculttural Company, Qld Cotton Co (taken over I think), Namoi Cotton. they are getting good rains in Nth NSW so should be a good reason. Agric commodities will recover with gold because demand outlook good. Hmmm.. will those ethanol refining plants close at $65/barrel for oil, so avoid corn, sugar. Better wheat, eg, Graincorp, and AAC
2. Gold - Lihir, and I can find you other stocks over the next couple of days.
Phil lost money on platinum because he doesn't listen. I said buy at $3.80 support, it reached that, then rallied to almost $5, but its such a volatile stock. He accepted your buy & hold. Worse that that - he likely said oh, Andrew's right, I better jump on at $4.50-$5.00, not wanting to miss out, and not talking to me, and he probably paid the highest price of the rally. It will recover though, so he should hold. Its not the first stock I would buy for platinum because its black empowerment in Africa, explosure to Zimbabwe, but its kind of the only one..... I think Platinum will out-perform silver, which will out-perform gold, but gold stocks will do very well, and its hard to get exposure to the others. You suggested PLA - which is also Sth Africa. Medium to long term you will be hurt on a strong RSA currency. That will be a big problem. So better to stay with gold in Australia. Because the collapse of industrial metals and energy will make gold better because they will keep the $A weak, so earnings in Australia gold prices exceptional. Only gold and food will strengthen the export revenues. Sugar & corn will be weak I guess because of energy-related sectors since the oil boom.
I say buy LGL (Lihir) because gold has found support I believe if you look at the charts, But watch as the market falls today, see if gold goes up as stocks go down. Gold is very stable, but strong in $A terms, so the gold producer stocks will eventually respond to that. Its just they are being dragged down, so you need to accumulate this week. Best buying mid to late-week (end Oct'08).
Dad, just looking at some stocks. Mincor has $120mil in cash. the company is currently valued at $140mil. Lower nickel prices but offset by weaker $A, so earnings still good. But long term gold will do better because stronger food and gold prices will push up $A, but not nickel because there will be slack demand for a while, but MCR are over-sold, so you can trade them.
See my blue chips blog I have chart for GNC. Food & gold, and MCR because its special. Has cash & high grade nickel.
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Andrew Sheldon www.sheldonthinks.com
Really the only things you should be buying are
1. Food - Australian Agriculttural Company, Qld Cotton Co (taken over I think), Namoi Cotton. they are getting good rains in Nth NSW so should be a good reason. Agric commodities will recover with gold because demand outlook good. Hmmm.. will those ethanol refining plants close at $65/barrel for oil, so avoid corn, sugar. Better wheat, eg, Graincorp, and AAC
2. Gold - Lihir, and I can find you other stocks over the next couple of days.
Phil lost money on platinum because he doesn't listen. I said buy at $3.80 support, it reached that, then rallied to almost $5, but its such a volatile stock. He accepted your buy & hold. Worse that that - he likely said oh, Andrew's right, I better jump on at $4.50-$5.00, not wanting to miss out, and not talking to me, and he probably paid the highest price of the rally. It will recover though, so he should hold. Its not the first stock I would buy for platinum because its black empowerment in Africa, explosure to Zimbabwe, but its kind of the only one..... I think Platinum will out-perform silver, which will out-perform gold, but gold stocks will do very well, and its hard to get exposure to the others. You suggested PLA - which is also Sth Africa. Medium to long term you will be hurt on a strong RSA currency. That will be a big problem. So better to stay with gold in Australia. Because the collapse of industrial metals and energy will make gold better because they will keep the $A weak, so earnings in Australia gold prices exceptional. Only gold and food will strengthen the export revenues. Sugar & corn will be weak I guess because of energy-related sectors since the oil boom.
I say buy LGL (Lihir) because gold has found support I believe if you look at the charts, But watch as the market falls today, see if gold goes up as stocks go down. Gold is very stable, but strong in $A terms, so the gold producer stocks will eventually respond to that. Its just they are being dragged down, so you need to accumulate this week. Best buying mid to late-week (end Oct'08).
Dad, just looking at some stocks. Mincor has $120mil in cash. the company is currently valued at $140mil. Lower nickel prices but offset by weaker $A, so earnings still good. But long term gold will do better because stronger food and gold prices will push up $A, but not nickel because there will be slack demand for a while, but MCR are over-sold, so you can trade them.
See my blue chips blog I have chart for GNC. Food & gold, and MCR because its special. Has cash & high grade nickel.
-------------------------------------------------
Andrew Sheldon www.sheldonthinks.com
Sunday, September 07, 2008
Alumina Ltd (AWC.ASX) - good buy
The bulk materials like coal, iron ore, alumina have faired a lot better than the base metals like nickel, copper, lead and zinc, so one might consider Alumina Ltd (AWC.ASX) a good buy because its going to benefit from a weaker AUD, but its been dragged down by other commodity stocks. China does not have bauxite to my knowledge, so given the opportunity for Chinese (govt) owned corporations to launch takeovers, this might be expected to be a compelling takeover target. I'm a little outdated, but if you check Google Finance, I think you will find Rio Tinto and Alcoa each own a good portion of this corporation. The question is whether it would be up for sale. Interestingly Alcoa is helping the Chinese government block the BHP Billiton takeover of Rio Tinto, so maybe they are is a 'kickback' in terms of giving the Chinese a stake in Alumina.You are going to see a lot more Chinese investment in the Australian resources sector. Its been on the cards for a long time. This slack market provides the perfect conditions for a takeover. This is the time to start learning how to pick mining stocks. Do you know the types of companies that the Chinese are going to buy? This stock is at technical support.
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Andrew Sheldon www.sheldonthinks.com
Mincor Resources (MCR.ASX) wait for $1.00 entry
The broader market I think is near its bottom, but since I have a fetish for mining stocks I wanted to draw these particular mining stocks to you. Mincor has been a great performer over the last few years. It has sunk considerably as a result of falling nickel prices. In this market it seems destined to fall to its support level of $1.00. Its well off that currently, so some patience is required. You might question why I think its going to get there. The reasons:2. Commodity prices are going to weaken
3. Mincor is destined to release some poor profit results and projections based on the current weak prices.
These factors are destined to cause the worst possible sentiments towards the stock, thus providing the best possible conditions to buy. You just need to wait for the bottom. As you can see the stock has broken its $1.50 support. There is another support around $1.25, but I think this stock might be going down to $1.00 since that is the strongest support. This is a long term chart, so give it time. It might only got down to that level during intra-day trading, but such strong supports tend to be reached. It was of course once a fairly strong resistance.
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Andrew Sheldon www.sheldonthinks.com
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