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Is the ASX oversold?

Discussion in 'Shares' started by Rod_WA, 23rd Nov, 2007.

  1. Rod_WA

    Rod_WA Well-Known Member

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    Thanks for the thread prompter Michael.

    I have to agree. A couple of examples:

    ANZ is now at 12-month forward P/E of 12.2 and 5.0% fully franked yield (current) and 5.45% estimated 12-month forward dividend. Yummo.

    IAG is at 6.6% FF dividend. Now IAG has been cut down lately, and everyone thinks the going's gunna be tough for a couple of years. But even if the dividend doesn't move for three years, but earnings rise at about 7-8 % per year (as per consensus forecasts) then the 3-year forward P/E will be 10 (in other words, the only way is up).
    At 6.6% FF yield, these shares are self-funding up to 9.5% interest rates.
    And this is a company that might just be the next local takeover target!
     
  2. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Hi Rod,

    Good timing! :D

    I just posted a new thread of my own stating that I think the market is over-sold and that I'm now executing my diversification strategy that I planned on doing when the market next corrected on sub-prime concerns.

    As I said in that new thread of mine, BHP at $40 is a good indicator that its time to be buying back in. Now I've just got to hope that ANZ Margin Services process the diversification request promptly.

    Cheers,
    Michael.
     
  3. DaveJ

    DaveJ Well-Known Member

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    I personally think the Australian stock market has a lot more downside to it... I am interested to see many a forum(historically Property focused) saying the stock market is the best place to invest... A sure sign the top is near (IMHO). I am invested in the short side of the market so we shall see.

    Its the old analogy of when the taxi driver(forum) starts talking about leveraging heavily into the stock market.... that it is time to think of other places to invest.


    Only time will tell who is right :cool:


    I personally think the 'Subprime' problem has a LOT more to give to the Australian and world marktets!!!... Caution and not-over leveraging is the order of the day for me.

    Dave
     
  4. FrankGrimes

    FrankGrimes Well-Known Member

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    MQG forward PE of 11.3 and yield 4.8% - not bad. MQG has been oversold like crazy.

    Do you think a Rudd government will spook people more?
     
  5. MichaelWhyte

    MichaelWhyte Well-Known Member

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    I hope so. Its going to take a little while for my diversification request to be processed and I'd like some more downside from here rather than upside if possible until that change has taken effect... ;)

    But in reality, I think the change of government would have little effect on the stock market these days. It will be business as usual. The biggest potential shock to the markets remains the global credit squeeze on the back of the US sub-prime problems. And that's got months yet to play out in full.

    Cheers,
    Michael.
     
  6. bundy1964

    bundy1964 Well-Known Member

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    Adelaide, SA
    I think the market did a wait and see localy till the election was out of the way and the result was not unexpected, just the margin a little surprising so the market had priced in the change.

    Our futures are pointing to a 1.3% rise Monday as is the US and most of europe is looking higher than that.
     
  7. DaveJ

    DaveJ Well-Known Member

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    Hmmm... Seems 13Nov when this comment was made seems to be pretty well timed:eek::rolleyes:

    Who's Having a Scotch(maybe a bottle) and who's having Champagne? There is always two sides to every market
     
  8. Glebe

    Glebe Well-Known Member

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    Dog died, wife out of work, stock market crash. What a week. I'll have a scotch thanks.
     
  9. Alan

    Alan Well-Known Member

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    CLICK.......Cheers Glebe. ;)

    A day to have a quiet drink and think about indeed.

    I'm not sure how many days we will see the ASX fall 400 points in a single day but I think this will be a day to absorb and remember.

    Let's have another........tomorrow may be another interesting day! :D:rolleyes:

    Interesting times indeed..............
     
  10. samaka

    samaka Well-Known Member

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    Mathematically it can't go on for more than 2 weeks so if it starts dropping any quicker then you can take relief in the fact that it would all be over by mid-Feb. :D
     
  11. Alan

    Alan Well-Known Member

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    There you go........ANOTHER positive.

    Let's have a third......CLICK.

    :D:D
     
  12. AsxBroker

    AsxBroker Well-Known Member

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    Yes,

    Some of the bank yields are looking quite delish.
    SGB yielding 6.5% FF, basically the same yield as the Dragon Direct (though you get the franking credits) with possible upside volatility.

    Cheers,

    Dan

    PS Before making an investment decision speak to your FPA registered Financial Planner.
     
  13. FrankGrimes

    FrankGrimes Well-Known Member

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    If only I had some money left ;-)

    All banks in a similar position