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.

AORD 2022-01-10

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.

    COG website
    COG website

    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.

    COG chart

    2. Large Cap: ANZ

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

    ANZ website

    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.

    ANZ chart

    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.

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