Stock Tips Of The Week: MQG, ASG

The mar­ket has been very tur­bu­lent over the last month, but as investors we press on!

Tony teach­es us to Always Be Invest­ed, regard­less of where the mar­ket cycle is, because you nev­er know when it’s going to turn around (April 2020 demon­strat­ed that!) and you have to be in it to win it. Look­ing back over his 30 years invest­ing expe­ri­ence, Tony knows that a lot of his growth came after mar­ket cor­rec­tions. But, of course, those are times when many investors have been scared away from the mar­kets, so they are sit­ting on cash or bonds and there­fore miss out when the mar­ket picks up again, only get­ting back in after a lot of the upside has already been had. Times likes these help demon­strate the val­ue of hav­ing a tried-and-test­ed sys­tem to guide our exit and entry points and our invest­ing behav­iours. So… with that…

We have two stocks to bring to your atten­tion to this week. This rec­om­men­da­tion is based on Tony’s analy­sis using data from Sun­day, 5 Dec 2021. 

1. Small Cap: ASG

Autosports Group (XASX:ASG) com­menced oper­a­tions in 2006 with the estab­lish­ment of the Audi Autosports Deal­er­ship as a green­field site. Since then the port­fo­lio has grown from a sin­gle deal­er­ship to over 50 retail busi­ness­es through­out Syd­ney, Mel­bourne, Bris­bane and the Gold Coast. The Group was list­ed on the Aus­tralian Stock Exchange in Novem­ber 2016.

• It has a QAV score of 0.26
• Aver­age Dai­ly Trans­ac­tion is around $50,000
• Price-to-Oper­at­ing Cash Flow is 3.61
• Share price is less than the con­sen­sus val­u­a­tion
• Share price is also less that our future Intrin­sic Val­ue
• Share price is less than Book + 30%
• New three point uptrend (see below)
• Growth / PE is greater than 1.5
• Div­i­dend yield is high­er than bank rate
• Finan­cial health is sta­ble and strong
• High lev­el of direc­tor stock own­er­ship
• Qual­i­ty score of 93%

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2. Large Cap: MQG

Mac­quar­ie (XASX:MQG) is a glob­al finan­cial ser­vices group oper­at­ing in 33 mar­kets in asset man­age­ment, retail and busi­ness bank­ing, wealth man­age­ment, leas­ing and asset financ­ing, mar­ket access, com­mod­i­ty trad­ing, renew­ables devel­op­ment, spe­cial­ist advi­so­ry, cap­i­tal rais­ing and prin­ci­pal invest­ment.

Mac­quar­ie is a com­pa­ny with a great track record of high per­for­mance and we always like to see it come back onto our buy list. The share price is cur­rent­ly at its five-year peak, but that does­n’t con­cern us.

Some of the rea­sons we picked MQG this week include:

• QAV score of 0.18
• Aver­age Dai­ly Trans­ac­tion of $125 mil­lion
• Price-to-Oper­at­ing Cash Flow of 2.92
• Finan­cial health is strong and sta­ble
• Stock Doc­tor “Star Stock”
• Share price is cur­rent­ly less than the Con­sen­sus Intrin­sic Val­ue
• Qual­i­ty score of 57%

Please note: Tony and Cameron cur­rent­ly own MQG.

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Please Note: 

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.

Each Monday we publish our full buy list for QAV Club members.