Thursday

Stocks We Are Down On

Post a Comment March 18, 2010 – 1:50 am |   | Permalink |  Print This Post |

One of the best things to do we feel is to review the losers in ones portfolio - the rationale is if ones analysis were correct in the first place, then buying more at lower prices is a great opportunity. So, we reviewed all stocks in our portfolio which are trading below our entry - the thought is if the fundamentals have not changed, then we ought to buy more at discounted prices:

1. Webster Limited (WBA.AX on Yahoo) - Bought at 67c, Now 43c - Down 37%. We bought Webster in the first week of coming online. Here is our analysis on Webster Limited written on 9 Jan 2009. We will not be loading up on WBA - we reviewed the latest financial report and did not realise they had 27m in borrowings (22m last financial year). Cash flow from operating business remains negative (see latest cash flow report below). They are also divesting their holdings in Salmon producer, Tassal to reduce debt from their loss making business. In hindsight we failed to see the cash flow and DEBT in the balance sheet. Technically, it is at its 52 week lows, so any rally in the general market should see higher prices (so we are not selling our holdings)

Webster Limited Cash Flow Analysis

2. Circadian (CIR.AX on Yahoo) - Bought 2000 at 74c (27.6.2009), 5000 at 58c (22.2.2010). We reviewed and posted our full analysis on Circadian 3 weeks ago when it fell significantly below its cash backing. We doubled our holdings at 58c , since then CIR is now trading at 71.5c (last trade).

3. Australian Agricultural Company (AAC.AX on yahoo) - 5000 shares at $1.45 on 10.9.2009. this is another Agricultural play we are bullish on in general. We recently posted our analysis on Australian Agricultural Company. Very disappointing numbers

Australian Agriculture Company

We are still waiting for a company response on DearCEO on why the discrepancy between revenue in 2007 and 2009 despite having similar sales figures (no of cattle, price of cattle). Please vote to keep management aware and interested here . We noticed that David Farley (CEO) has been topping up his holdings. We will not be topping up until we get to the bottom of their numbers. Those interested in AAC please bookmark this page.

4. Elders Limited (ELD.AX) . 3000 shares at $1.69 on 1.6.2010. Analysis Pending. Institutional investors are jumping onboard, and with Chris Corrigan on board, a turn around in the business will not come as a surprise. Will look into the numbers soon.