Quiet Contrarian. Ep 21: Trades for September 2021.
That was a busy month, lots of stock movements and lots of buying and selling. Guess the institutional investors were mucking about in the market quite alot.
Buys
DGL Group Ltd – DGL.ASX – These guys have been making waves in the industry. They’re making a big play for the chemical industry in Australia and have been on a major tear for the last few months. At the $3 price point, they’re only trading at about a 3.5x trailing PE, according to the reported earnings from their first Annual Report. This seemed like a no brainer. But this wasn’t the end of the story <See Below>
Kina Securities Ltd – KSL.ASX – This is a well run bank in PNG, xANZ. Some geopolitical risk. Price has been hit due to the recent merger with the xWestPac bank being shut down by the regulatory authorities. Bought on the dip as the bad news may also present an opportunity, and may not be as bad as suspected. Lets see if they can turn this into a positive. In the meantime, happy to collect the 10%+ Dividend.
Magellan Financial Group – MFG.ASX – Continuing to add to my holding, as they go down. Feel like I will add one more position on the next major market correction.
NRW Holdings Ltd – NWH.ASX – Well run mining services company. Continuing to add to their order book. The mining/industrial services companies seem to be the only undervalued sector I can find associated with the broader decarbonisation/deglobalisation thematic. Added to my holding.
Service Stream Ltd – SSM.ASX – As above, these guys have been hit hard with the drying up of the NBN contracts. They’re an extremely well run business, and I’m buying in at what I hope is bottom of the cycle on a similar thematic to above.
Sells
DGL Group Ltd – DGL.ASX – I think the business model is great, but this was another case of getting ahead of myself. Upon further examination, the reported earnings seems to have been some sort of anomaly. The forward EPS is looking like it’ll be closer to 3c. 100xPE… too rich for my blood. Sell out. Wait for a more reasonable valuation.
Flight Centre Travel – FLT.ASX – Didn’t do great, they hit my breakeven point. Could have made a bit of money if I’d held a few days, but this is as close as I’m willing to run things to the reopening thematic. Expect to see me continue to unload more of my reopening trades over the next month or two.
IDP Education – IEL.ASX – These guys have been on a major tear, as part of the reopening trade. From my estimates, next year’s EPS will be in the 30-40c range, that puts these guys at around the 100x PE mark, see DGL comments. Will be selling down my 7% holding to about 1.5% over the next month or two, hopefully before the reality of reopening hits and the stoke is still high.
