Managing Market Volatility - 4 Tips In Buy/Hold Zone (TCL, WAM, DDR and PGC)

  • Oct 26, 2018 AEDT
  • Team Kalkine
Managing Market Volatility - 4 Tips In Buy/Hold Zone (TCL, WAM, DDR and PGC)
Market volatility can impact your portfolio to a great extent, it is hence important to choose balanced financial products and expect potential rewards with risk management in place. One should not overreact to the short-term volatility and reevaluate your portfolio for staying invested for a longer period of time. To protect your investments, go for quality well established companies which can provide an income or dividends during your retirement years and pursue safer bets. Four such stocks are mentioned below: TRANSURBAN GROUP (ASX: TCL) – The company is expected to improve its EBITDA and EBITDA margin, the EBITDA excluding significant items increased 9.5 per cent to $1,670 million with increase in average daily traffic of 2.2 percent. Also, the revenue increased 8.7 percent to $2,340 million. The ROE improved significantly from 5.0% to 10.1% and reflects better growth. On the back of contribution from GWA assets, Free Cash Flow has grown at CAGR of 20.7% during FY14-18. The stock has an attractive dividend yield of 5.04% for the year. The stock surged by 1.169% as at October 26, 2018, to trade at a market price of $11.250. The stock has seen a performance change since inception of 5.33%. Based on the decent outlook and effective financials we recommend the stock to be in a buy zone.   WAM CAPITAL LIMITED (ASX: WAM) – With operating profit before tax amounting to $166.9 million reflecting the YoY growth of 87.6% represents the company’s earnings from normal operations. For the period of twelve months ended on June 30, 2018, WAM Capital’s total shareholder return stood at 6.1%. During the month of September 2018, the Australian dollar strengthened 0.6% compared to the US dollar which benefitted the company. The company is also trading at a reasonable P/E of 12.690 and EPS of 0.054 AUD. The stock has seen a performance change since inception of 153.48% and traded at a market price of $2.430. The stock has an attractive dividend yield of 6.43% for the year. Based on the macroeconomic factors and decent financials we recommend the stock to be in a hold zone. DICKER DATA LIMITED (ASX: DDR) – For more than 15 years, the group has achieved consistent top and bottom line growth and recorded revenue growth at CAGR of 9.0% during 1HFY15-1HFY18. Resultantly the group is on track to improve its PAT margin from the current level, and the EBITDA margin, gross margin, and NPAT margin was at 9.39%, 3.80%, and 2.97%, respectively on a 3.5-year average basis 1HFY15-18 representing a positive bottom line. The stock has seen a performance change since inception of 1276.19% and traded at a market price of $2.900. The stock has an attractive dividend yield of 6.09% for the year. Based on the improving company financials we recommend the stock to be in a buy zone. PARAGON CARE LIMITED (ASX: PGC) – As at FY 2018, PGC has a return on equity or ROE of positive 8.7% which is comparatively lower from 13.1% in 2017. The current ratio of the company is 1.88x in FY 2018 which is above the industry average of 1.31x reflecting ability to pay short term obligations. As compared to 39.3% in 2017 the company has a gross margin of 40.2% in FY 2018. However, the company’s EBITDA margin stood at positive 13.3% while in the previous year it was 14.6%. The stock has seen a performance change since inception of 158.33% and traded at a market price of $0.685. The stock has a dividend yield of 4.53% for the year. Based on the decent trading multiples we recommend the stock to be in a hold zone.

Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

   

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK