Stock Tips Of The Week: GRR, GWR

Well the AORD has recov­ered in the last week! Not quite back to where it was, but it’s cer­tain­ly had a more upbeat week.

As I point­ed out last week, 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. And some of the stocks we’ve rec­om­mend­ed in the last few months have been doing very well.

• KRM is up 80% since we rec­om­mend­ed it on 20/9/21
• MHJ up 34% since rec­om­mend­ed on 28/9/21
• KIL up 18% since rec­om­mend­ed on 26/10/21
• AMI up 16% since rec­om­mend­ed on 2/11/21
• IGL up 10% since rec­om­mend­ed on 13/9/21

A hand­ful have gone back­wards too, but as you know, our goal is to get 60% of the picks right, and to pull the weeds as we go, if they drop below 10% of the buy price (aka Rule #1).

We have two stocks to bring to your atten­tion to this week. This rec­om­men­da­tion is based on Tony’s analy­sis using data from Sun­day, 12 Dec 2021. Now that Tony has decid­ed Iron Ore is once again a com­mod­i­ty buy, both of our stocks this week are iron ore min­ing com­pa­nies.

1. Small Cap: GWR

GWR Group Lim­it­ed (XASX:GWR} is an inde­pen­dent, Aus­tralian resource house, focused on cre­at­ing share­hold­er wealth through the devel­op­ment of high qual­i­ty min­er­al explo­ration and devel­op­ment projects.

Some of the rea­sons we like GWR this week include:

• Based on a share price of 11c, it has a QAV score of 0.79
• Qual­i­ty score of 100%
• Aver­age Dai­ly Trans­ac­tion is around $35,000
• Finan­cial health is recov­er­ing and strong
• Share price is less than our Intrin­sic Val­ue #1
• PE is less than the div­i­dend yield
• Div­i­dend yield is high­er than bank rate
• Price-to-Oper­at­ing Cash Flow is 1.26
• High lev­el of direc­tor stock own­er­ship

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2. Large Cap: GRR

For over 50 years Grange Resources has been Aus­trali­a’s pre­mier pro­duc­er of iron ore pel­lets. It was also one of the best per­form­ers in our QAV port­fo­lio in 2020, deliv­er­ing a 187.92% annu­alised gain.

Some of the rea­sons we picked GRR this week include:

• At a share price of 75c, it has a QAV score of 0.43
• Qual­i­ty score of 100%
• Aver­age Dai­ly Trans­ac­tion of $1.379 mil­lion
• Price-to-Oper­at­ing Cash Flow of 2.31
• Finan­cial health is strong and sta­ble
• Share price is low­er than our Intrin­sic Val­ue #1
• Share price is low­er than Book + 30%
• Record low PE score
• It has con­sis­tent­ly increas­ing equi­ty

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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.