Stock Tips Of The Week — ATP, SUL

We have two stocks to bring to your atten­tion to this week. This rec­om­men­da­tion is based on Tony’s analy­sis using data from Sun­day, 14 Nov 2021. 

1. SMALL CAP: ATP

Our small cap stock this week is Atlas Pearls Ltd (ASX:ATP), an Aus­tralian list­ed pearling busi­ness that pro­duces South Sea Pearls, with farm­ing oper­a­tions through­out Indone­sia and retail stores in Perth and Bali. Atlas has earned rep­u­ta­tion as a world lead­ing pearl pro­duc­er of the queen of all gems, the South Sea pearl, spe­cial­is­ing in high qual­i­ty white and sil­ver pearls.

• Based on their share price at $0.03, they have a Qual­i­ty Score of 118% and a QAV score of 0.35
• Aver­age Dai­ly Trans­ac­tion is only $7,000
• Our IV #1 is $0.08, 2.5x the cur­rent share price
• Equi­ty Per Share is $0.04, 30% high­er than the share price
• Price-to-Oper­at­ing Cash Flow is 2.70
• Direc­tors hold 19% of the stock
• Finan­cial health is strong
• New three point uptrend
• Record low PE score

2. LARGE CAP: SUL

Our large cap stock this week is Super Retail Group Lim­it­ed (ASX:SUL). They are pri­mar­i­ly involved in retail­ing of auto parts and acces­sories, tools and equip­ment, retail­ing of boat­ing, camp­ing, out­door equip­ment, fish­ing equip­ment and appar­el and retail­ing of sport­ing equip­ment and appar­el.

• Based on the share price of $13.19, they have a Qual­i­ty score of 87% and their QAV score is 0.17
• Orig­i­nal­ly Super Cheap Auto, QLD com­pa­ny
• Inter­est­ing his­to­ry, ear­ly 70s mail order parts busi­ness
• Then they set up stores, Super Cheap Auto, the Bun­nings of car parts
• Expand­ed, diver­si­fied, bought Rebel Sports, BCF, etc.
• Aver­age Dai­ly Trans­ac­tion $9.5m
• Recent Star Stock
• Just under con­sen­sus bro­ker and SD IV
• High yield 6.7%
• ROE 27%
• NTA 1.59
• 5x Price-to-Oper­at­ing Cash Flow
• Slight­ly above our IV1, but less than IV2
• Orig­i­nal founder still hold­ing a lot of stock, board has 29%
• Cur­rent PE is the low­est in three years

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.

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.