We have two stocks to bring to your attention to this week. This recommendation is based on Tony’s analysis using data from Sunday, 21 Nov 2021.
1. Small Cap: YOW
Yowie Group Ltd (XASX:YOW, formerly GSF Corporation Limited) is a global brand licensing Company, specialising in the development of consumer products designed to promote learning, understanding and engagement with the natural world through the adventures and exploits of six endearing Yowie characters.
Some of the reasons we like YOW include:
- QAV score 0.34
- Quality score is 110%
- Price-to-Operating Cash Flow 3.25
- Financial health is strong
- Share price is less than the consensus intrinsic value
- Share price is less than Book Price + 30%
- Owners/Founders have a high (26%) ownership
The main caveat with this stock is that the Average Daily Transaction is very small – around $4000. So if it runs into trouble, there could be a lot of people trying to run for the exits. It’s probably only suitable to people who are trading in very small parcels.
2. Large Cap: PRU
Perseus Mining Limited (XASX:PRU) is engaged in gold production, mineral exploration and gold project development in the Republic of Ghana and the Republic of Cote d’Ivoire both of which are located in West Africa.
Some of the reasons like like PRU this week include:
- QAV score is 0.11
- Quality score is 77%
- Good news in recent quarterly report
- Exploration “struck gold”, literally
- Upgraded projections
- Gold commodity price shifting sideways but above sell price
- If it keeps going sideways the sell price will eventually catch up in 3-4 months, so that’s a risk
- But PRU has great numbers
- Large Average Daily Transaction 6.5m
- Star growth stock
- Strong financial health
- Share price 1.68 (2021-11-24)
- Share price is currently less than Consensus IV
- Price-to-Operating Cash Flow 6.83, on the high end for us, but below the cut off
- Share price is greater than Book plus 30%
- Share price is less than our IV2
- Strong EPS growth
- EPS / PE = 5.1 which is very high
We also want to let everyone know that Tony does hold this stock.
Our recommendations are based on the share price as of the date of the download. If the share price changes, this will affect the QAV score and its ranking on our buy list, so please take price changes into account before making any investing decisions.
Also note that while we apply a high level of science in our selection process, some stocks may not perform well in the short term. Like Warren Buffett, we aim for a 60% success rate (meaning 60% of our stocks will do well in the short term, the other 40% will not). So it’s very important to monitor your portfolio and to sell the ones that don’t perform to your expectations. The way we do this in QAV is using Rule #1 and the 3PTL. If you’re not familiar with how to use those, please listen to the podcast and consider joining QAV Club.
We have very strict guidelines about what we disclose about our own portfolios, and when we buy and sell stocks that appear as our stocks of the week. You can read our guidelines here.
Finally, please also note that this isn’t personal financial advice and you should consult a financial planner before making any investment decisions.