Stocks of the Week — ANZ, COG

We have two stocks to bring to your attention to this week. These recommendations are based on Tony’s analysis using data from Sunday 09 Jan 2022.

MARKET UPDATE

Despite the pre­vi­ous week’s opti­mism, the AORD did­n’t fare as well in the last week, and, seri­ous­ly, who can blame it! Aus­tralia is fac­ing sup­ply chain issues, health care sys­tem over­load, and politi­cians who could­n’t lead their way out of a small tent.

Our stock tips have con­tin­ued to per­form well though. The top stock tips we’ve made in the last few months include:

• GWR up 75% since we rec­om­mend­ed it on 13/12/21!

MHJ up 69% since rec­om­mend­ed on 28/9/21

KRM is up 60% since we rec­om­mend­ed it on 20/9/21

KIL up 22% since rec­om­mend­ed on 26/10/21

CVW is up 14% since rec­om­mend­ed on 4/10/21

FEX is up 16% since rec­om­mend­ed on 20/12/2021!

Since we start­ed pub­lish­ing our stocks of the week in Sep­tem­ber, about 60% of our picks are either up or neu­tral, while the oth­er 40% are down, some by a lit­tle, some by a lot, but if you’re fol­low­ing the QAV sys­tem, you’d have already replaced those in your port­fo­lio (QAV Rule #1 – Nev­er Lose Mon­ey). Our goal is to have 60% of our stocks per­form well over the long term. Obvi­ous­ly, dur­ing tur­bu­lent mar­kets, find­ing these is a lit­tle more dif­fi­cult than it is dur­ing upbeat mar­kets, but that’s why invest­ing takes patience and a long-term strat­e­gy for rid­ing out the cycles. 

THIS WEEK’S STOCK RECOMMENDATIONS ARE:

1. Small Cap: COG

COG Finan­cial Ser­vices Lim­it­ed (XASX:COG) is focused in the equip­ment finance sec­tor — equip­ment finance broking, finance aggre­ga­tion and com­mer­cial leas­es for essen­tial busi­ness assets.

Here are the rea­sons we like COG this week.

• Based on the cur­rent share price of $1.45, COG has a qual­i­ty score of 73% and a QAV score of 0.24
• Aver­age Dai­ly Trade of $54,000
• Price-to-Oper­at­ing Cash Flow ratio of 3.06
• Finan­cial health is strong and steady
• Div­i­dend yield is high­er than the cur­rent bank rate
• High per­cent­age share own­er­ship by the direc­tors

The only caveat to COG this week is that it’s a Josephine (if you don’t know what that means, you should lis­ten to our show), so we would wait until the chart turns up before we buy it.

2. Large Cap: ANZ

ANZ is… a bank. You know who they are.

It’s not often that we see banks show up on our list, as they are usu­al­ly over­val­ued. But things have been a lit­tle dif­fer­ent dur­ing COVID, so they have come and gone and then come again.

Some of the rea­sons we like ANZ this week include:

• Based on the cur­rent share price of $28.40, they have a qual­i­ty score of 67% and a QAV score of 0.37
• Aver­age Dai­ly Trade is $130,590,000, mak­ing them big enough even for Tony
• Price-to-Oper­at­ing Cash Flow is real­ly low at 1.81
• Finan­cial health is strong and steady
• They are a Star Stock on Stock Doc­tor
• Share price is less than the Con­sen­sus Val­u­a­tion, our IV#2 and Book + 30%
• It’s a new three point upturn
• Div­i­dend yield than the cur­rent bank rate

If you do buy it, how­ev­er, make sure you set your sell alerts, because it could drop back below the sell line pret­ty quick­ly.

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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 COMPLETE buy list for QAV Club members. It contains 100–200 stocks.