Share Investor's 2019 Stock Picks

Helping me out for next years stock picks is once again Halle Berry.

Its been a volatile year, my picks for the DOW and NZX are off by 5000 odd points for the DOW and almost 2000 odd points for the NZX. Not good at all.

Its been a year when the Share Investor Portfolio stood its ground, shot up to record highs and then foundered off to where it is today.

Nothing has changed.

We have no reason to sway from the 9 stocks in the portfolio.

In fact this author will be looking at increasing his stakes in all the stocks should they come down in price to an acceptable level.

So without further ado I will briefly list my stocks and the reasons why they should be picked for another year.



Sky City Entertainment Ltd

Sky City Entertainment Group Ltd is starting took look like a steal right now.

At present it is trading at $3.45.

Its presently looking at building up quality assets and ditching under-performing ones.

The payoff will be in the 2020-21 financial year.

Im hoping to get in again at $3.00 and under.



Mainfreight Ltd

Mainfreight Ltd is a company that has been on a roll during this year.

A positive one that led to a record profit reported on Nov 14. 

It is starting to lift in all areas in NZ and overseas.

Next year should cement their aim of being the biggest and the best listed company on the NZX.



Fisher & Paykel Healthcare 

After climbing to about $16.40c a couple of months ago this stock is currently trading at $12.50c so currently looks out of favour with the market.

So it could continue down.

It still has issues surrounding it such as legal action against/by itself and Resmed so some of that could be swirling around it.

My favourite stock.


Contact Energy Ltd

Contact Energy is going to have a giveaway in the 2019 year.

They are set to increase dividend payments by 15 - 25% depending on results.

The Feb 2019 result is tipped to look good because of the vagaries of the market setting records for the amount paid to wholesalers like Contact.


Auckland Airport Ltd

Auckland Airport Ltd will slow growth over the 2019 year but grow it will. 

It is this country's only Airport - of significance - and it will double its growth over the next 10 - 15 years. From the current 20m to over 40m passengers.

It is being battled currently by charges from the current Govt that it is overcharging for its facilities but i'm aware that what is going on behind the scenes will put that to bed. 

You might be able to get this one under 7 bucks, its been there before this year and I have no doubt it will fly under the radar at least once.


Ryman Healthcare 

Ryman Healthcare is my second favourite stock. 

Mainly because of the returns.

They are good.

AND they will continue again in 2019.

There's not much else to say expect them to grow again, in Australia and New Zealand.

And watch, this little puppy seems to be going out of fashion again.

You could perhaps get this one for below 10 bucks in 2019


Arivda

This one was bought for the long term. Like the one above, I've held Ryman for 13 years and I plan to hold this one forever.

Looks good, it is actually paying more than Ryman but you can get it cheaper.

Id stick my neck out and say you could get it for $1 - 1.10c. Its currently trading at $1.30c.


Hallensteins Glassons

Looking good at the moment just posted a quiet sort of 2018 meeting

Its currently trading at $4.20c so that is over a 10% annual return.

Its subject to ups and downs, currently down, for some reason.

Its open to wild swings of share price because there is a lot held back 'cause insiders hold  a lot of stock.

This stock isn't for everyone but it is for me because its provides income

The company has no debt and millions in the bank.


Conclusion

In a year of change next year - and what year isn't - you should be looking for stocks that you have researched. They maybe different stocks to the ones that I hold - hope you can share with me what you have researched.

The above are my stocks.

How will they perform next year?  I have a good idea that they will perform with small increases in some and big increases in others, FPH and MFT are 2 of the latter.

When i say perform i'm talking about profit results, they will not necessarily equate with the share price and that's were you make your money.

If the share price is being affected by outside influences, like people or brokers not interested in buying the stock then that is the time you swoop in.

Lets see what 2019 will bring.

Together. 





Share Investor's Annual Stock Picks

Share Investor's 2018 Stock Picks
Share Investor's 2017 Stock Picks

Share Investor's 2016 Stock Picks
Share Investor's 2015 Stock Picks 

Share Investor's 2014 Stock Picks
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Share Investor's 2012 Stock Picks 
Share Investor's 2011 Stock Picks
Share Investor's 2010 Stock Picks
Share Investor's 2009 Stock Picks
Share Investor's 2008 Stock Picks

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Broker Picks

Brokers 2014 Stock Picks
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c Share Investor  2018

Pick the biggest losers when buying stocks

On the subject of buying listed shares on the NZX stockmarket I am making a list of the shares I am going to buy.

It looks like the stockmarket is going to go South before it goes North again because there is more bad news to come in relation to the New Zealand economy-we simply haven't been fully hit by economic events overseas yet.

So stocks are going to get lower.

I am lousing at timing the market and have bought earlier on this year and lost some share price value and ironically making a 40% gain on a purchase of Fisher & Paykel Healthcare [FPH.NZ] which is doing very well because of increasing sales and a lower kiwi dollar.

I am looking at the following:

Pumpkin Patch [PPL.NZ]
Hallenstein Glassons [HLG.NZ]
Telecom NZ [TEL.NZ]
Mainfreight [MFT.NZ]
Fletcher Building [FBU.NZ]
Michael Hill International [MHI.NZ]
Ryman Healthcare [RYM.NZ]


I own every one of the above except Telecom.

All of the above have dropped in share price by more than 50% off their respective highs, with the exception of Pumpkin Patch and Telecom which have dropped by more than 80%, and Mainfreight by about 40%.

I am very tempted to buy now and at these prices the stocks represent good value for money in a long term portfolio but as I have already pointed out I think these stocks have more room to move-down.

The retailers will still be under considerable pressure, even though they are already among the biggest losers in the downturn this year, but the ones I have listed are good quality and will eventually bounce back to life, sales and share price wise.

I will wait until next year and see how bad the February reporting season is before plunging back in.

Meanwhile I am hoarding cash over summer to make my move in 2009.


Related Share Investor Reading

Why did you buy that stock? [Fisher & Paykel Healthcare]
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c Share Investor 2008

Why Did you buy that stock? [Freightways Ltd]

Transport is a sector of New Zealand business that has done well ever since this country's inception.

Two narrow, mountainous main islands divided by a small body of water, with a sparse population make New Zealand's economy even more reliant on road transport of goods than any other country in the world.

We will always need good competitive transport companies to keep the economy moving.


Why did you buy that stock?

Why did you buy that stock? [Kiwi Income Property Trust]
Why did you buy that stock? [Hallenstein Glasson]
Why did you buy that stock? [Briscoe Group]
Why did you buy that stock? [Fisher & Paykel Healthcare]
Why did you buy that stock? [Pumpkin Patch Ltd]
Why did you buy that stock? [Ryman Healthcare]
Why did you buy that stock? [Michael Hill International]
Why did you buy that stock? [Mainfreight]
Why did you buy that stock? [The Warehouse]
Why did you buy that stock? [Goodman Fielder]Why did you buy that stock? [Auckland Airport]
Why did you buy that stock? [Sky City Entertainment]

Discuss Freightways at Share Investor Forum


I chose to invest in Freightways Ltd [FRE.NZ] principally because of this, although there are a raft of other key reasons as well. The fact that this industry is so essential to the economy means that it will always be around in some form or another. The certainty of that makes the criteria for investing a strong one for me.

The transport of goods around New Zealand is simple and easy to understand-for the operator and the investor. To operate such a business therefore is also simple and this has obvious advantages over the complexities of say the communications, computer and health sectors, which all require constant and costly updates to technology and the expense of training staff to keep up with that.

A truck, van, plane or boat pretty much stays the same, save for small changes over years.

What can I say, I am a simple kind of investor, and I like to understand the businesses that I invest in.

Unfortunately the simplicity of the transport industry, in this case Freightways, makes the barriers to entry for competition into its main operating areas: express package, business mail delivery, quite low.

It requires excellent management to keep competitors at bay and fortunately Freightways Managing Director Dean Bracewell and his board have provided a consistent approach to the day to day running of the company, in addition to a well researched approach to organic and acquistional growth.

The massive increases in business costs over the last several years; labour,energy, leasing and others, has been countered by cost savings in other areas while investment for future growth has been consistently rolled out where growth areas can be identified. All this and the company has still increased profit.

Tough economic times call for good management to get a company through the other side. The boys and girls at Freightways have proven their skills in this aspect.

As my readers will know, strong decisive management is important to the smooth, efficient running of a business and the team at Freightways have so far delivered for me.

Another good reason for me to buy this stock.

Freightways have a large stable of courier brands across New Zealand, from discount to the premium urgent delivery services, and the branding of these different services has been kept distinctly seperate. This keeps the brands uppermost in consumers minds and allows these respective services to target their consumers easily and keep them distinct from the myriad of competition from outside the company.

Branding is important to me and Freightway's strong courier brands, across a wide variety of income groups in the same industry make Freightway's courier business second to none.

I do like companies that specialize in one type of business, that way management are not easily distracted from their main core of operation and expertise-it is harder to get things wrong.

Freightways have expanded outside their core operations of delivery of packages and business mail but they are in related industries; document management and destruction companies based in New Zealand and Australia. A good compliment to their core operations but in tandem spreading the base of revenue across another business sector.

I paid $3.63 pr share in July 2006 and own the stock now for a cost of approx $3.10 after generous gross dividend payouts. The high dividend return is another reason I purchased this stock.

The last test in the latest Why did you buy that stock? series is whether I would still buy shares in Freightways today. Given the ability to get my hands on additional funds and a lower price than $3.10 per share the answer is a definite yes.

Disclosure I no longer own shares in FRE.

Freightways @ Share Investor

Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result







The Warren Buffett Way by Robert G. Hagstrom
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c Share Investor 2008

Why did you buy that stock? [Kiwi Income Property Trust]

Kiwi Income Property Trust [KIP.NZ] was an addition to my portfolio earlier this year.

I wanted direct exposure to the commercial property market without actually buying a building outright.

Kiwi first came onto my horizon when I noticed they had ownership of the 40 level Vero office building in Downtown Auckland, and then my interest was piqued when their Sylvia Park shopping centre in Mt Wellington opened.


Why did you buy that stock?

Why did you buy that stock? [Hallenstein Glasson]
Why did you buy that stock? [Briscoe Group]
Why did you buy that stock? [Fisher & Paykel Healthcare]
Why did you buy that stock? [Pumpkin Patch Ltd]
Why did you buy that stock? [Ryman Healthcare]
Why did you buy that stock? [Michael Hill International]
Why did you buy that stock? [Mainfreight]
Why did you buy that stock? [The Warehouse]
Why did you buy that stock? [Goodman Fielder]Why did you buy that stock? [Auckland Airport]
Why did you buy that stock? [Sky City Entertainment]


That is all I knew about the company. I like what I saw in its two high profile assets and went digging a little further. Kiwi have a good mix of quality properties, shopping centres and office buildings from Auckland down to Christchurch, among them; Northlands Shopping Centre, Centre Place Shopping Centre, North City Shopping Centre, The Plaza Shopping Centre, Downtown Plaza Shopping Centre, Langdons Road, PricewaterhouseCoopers Building, The Farmers Building and Countrywide Building.

In a property company one of the number one things an investor should look for is good quality assets. For me Kiwi fit the bill, so that for me is the main reason for me to make my small purchase of shares.

Coming a close second is management. Good properties are only going to get good returns over a long period if they are managed well and Kiwi property certainly is.

Since its creation in 1993 the company assets have grown to over NZ $2 billion, it has a great occupancy rate for its properties and it increased profit to just over $63 million in 2008, from just under $48 million last year.

The mix, age, quality of construction and geographical spread of assets show how good management have planned ahead.

The Sylvia Park shopping centre is a case in point. New Zealand's largest retail centre, it has room and space to grow and has over delivered in terms of initial expectations.

The only problem that they have had, and this seems endemic with shopping centre planners, they under estimated the need for car parking, something they are now remedying with a multi story car park now under construction.

Now another reason I bought this stock was that it was cheap in comparison to its share price high, at just over $1.70 per share, and its net asset value to capital market price. Its current market cap of NZ$872 million is less than the net asset value of just over $1.1 billion, so I had to buy.

In the Why did you buy that stock? series I have to ask myself if I would still buy today. At the current share price of $1.13 it represents excellent value and I would like to add some more, should my wife stop taking me off overseas and making me pay for it!


Related Share Investor reading

10 Basic Buffet questions to ask before investing
Share Investor Forum-Discuss this topic




c Share Investor 2008

Good opportunities exist for buying in current stockmarket

Everyday my portfolio takes another downwards trajectory. How about yours? Economic conditions in New Zealand and globally don't look good for the short to medium term.

There are more losses to hit markets in relation to the Sub Prime fallout, that initially revealed itself almost a year ago and the losses that have been crystalized in balance sheets around the world have had the consequent affect on credit markets, economic confidence and outlook. Future sub-prime losses will clearly continue this trend.

The added pressure of spiraling oil, food prices and every other good and service has left consumers pockets closed for business and those businesses are going to suffer as we all continue to prune costs.

Share prices have been reflecting this for more than six months but now we are set for more stockmarket revaluations as the economic gloom prepares to make itself at home.

Never fear though!

If like me you have been prepared for this you would have been squirreling away money while you could in anticipation of harder times then great. Some of our listed companies have hopefully been doing the same, unlike our present administration, and this is going to put you and them in good stead for a slow down.

It looks very likely that our stockmarket will be breaching the 3000 mark sometime this year and with that comes opportunity for buying.

The biggest opportunity for good wealth creation in the long term I would think would be US dollar sensitive stocks, all of which have been hammered over the last year because of the relative weakness of the US dollar.

It looks like the tide has turned for our dollar, with mutterings from Allan Bollard of interest rate cuts later in 2008 and the Fed talking up US interest rates.

Rakon[RAK.NZ], Fisher and Paykel Healthcare Ltd [FPH.NZ], Mainfreight Ltd[MFT.NZ], Sanford Ltd[SAN.NZ], Delegats Ltd[DLG.NZ], Pumpkin Patch Ltd[PPL.NZ] and Fletcher Building Ltd[FBU.NZ] will all benefit from the falling exchange rate while many of these companies are ready benefiting from the lower NZ/AU dollar cross, joined by the likes of Sky City Entertainment Group Ltd[SKC.NZ], Telecom NZ Ltd[TEL.NZ] and Michael Hill International[MHI.NZ] which have substantial operations in the West Island, Australia.

The biggest star that will benefit from this, which I conveniently hold, is Fisher and Paykel Health.

The company has profit sensitivity of approximately NZ$2.5 million, per one percentage point change in the value of the NZ dollar and as our exchange rate is off its recent high of .82c and is currently less than .76c then there is significant upside as the dollar retreats towards its historical levels of below 60c to the US dollar.

Its sales are also increasing strongly, so its upside in the medium to long term looks very good.

Apart from the opportunities related to a falling NZ currency there are also some very good companies ripe for bargain hunters flush with cash from better days and investors would be mad not to do some spending instead of getting those brokers and financial advisors wealthier by selling stocks and getting into gold, commodities, fixed interest, cash or some other over valued asset class.

Disc I own MFT, FPH, SKC, MHI, PPL, and FBU shares in the Share Investor Portfolio


Related Share Investor Reading

"Mr Market" gets his groove on
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From Fishpond.co.nz - Buy Toughen Up: What I've Learned About Surviving Tough Times



Toughen Up - Fishpond.co.nz



c Share Investor 2008