Quiet Contrarian. Ep 14: Trades for March 2021
Have continued with my experimentation period carrying on from last month. Twitter has already fallen away, and I barely use it but I have been loving Strawman.com. The community is great and I’m finding the discussions around investing to be invaluable. I’m currently still doing a bit of experimentation, but I can feel myself trending towards quality and consolidation.
Buys
AVA Risk Group – AVA.ASX – Security company. Got a bit enthused based on the Strawman.com analyses. Dirt cheap based on the forecast EPS.
Kina Securities – KSL.ASX – xAZrun bank in PNG. Solid governance and business structure. Margins and returns are similar to one of the Big4 20 years ago. Dirt cheap because of geographic risk. Currently in the middle of an acquisition of the xWestpac bank in PNG. Earnings growing at about 10%. If they manage the acquisition well, and bring finances in line, expect EPS to increase by ~80%. Watch out for lowering RoE in FY22+.
Shine Justice – SHJ.ASX – Legal services company. Highly illiquid. Good dividend. Should be quite defensive. Have been trying to accumulate these guys at a reasonable price. But I’m concerned that I won’t be able to offload them in the future due to their illiquidity. Will hold what I have but probably not worry about getting more.
Northern Star – NST.ASX – One of Australia’s (the world’s?) best gold miners. Have recently been hit with the old 1-2: Sentiment shifted away from gold, and their Legendary CEO Bill Beaumont left “to do it all again” with a copper miner. Price tanked as a result. I think this is an overreaction. They’re big enough to keep the ship sailing without one man, and gold will be back. Topped up my holdings on this opportunity.
Sells
AVA Risk Group – AVA.ASX – When the buy order triggered I realised I hadn’t done my homework properly. The forward EPS is huge because of a single contract (Indian Ministry of Defence) that ends in this FY. They didn’t have any replacements for it, and without that EPS is expected to halve. Didn’t look cheap anymore. Got out. Good company. Look for a better entry point based on long term growth.
Flight Centre – FLT.ASX – The market is liking the reopening story. But I’m not really buying it. I think there will be a few more pain points before the rubber hits the road and we actually know what the new income of the business will be. Their price hit my overall “breakeven” point, so I sold all the loss making shares.