Purchase VT Group limit @ 485
In November, it rains a lot and the rain made me think of water and water of the sea and the sea of ships and ships of shipbuilding.
Please be warned that this is not the right approach to investing but some times, you have to look into sectors that you normally don’t look at. My view on Gold is to hold the position you have now at these levels (profit taking at 650 and re-buying at 580). Silver looks good and is trading at a similar level to Gold.
I have done some research and as it turns out, the higher oil prices as well as the increasing world trade with emerging markets growing rapidly, have increased demand for shipping. The thing about shipping is that it has a slow turnaround which means that it takes years for orders of new ships to be filled. The profits of shipbuilding companies are increasing rapidly over the last few years and it is not expected to slow down.
Now that we have identified the sector, we look at performance, to see which companies have underperformed so far or maybe are trading in-line with the sector. VT Group trading in the London Stock Exchange (LSE) seems to be underperforming and is also trading in a major market unlike most of its peers, this is important because the traded volume is higher. Volume is important because the price fluctuates less and there is enough trading to be sure that you will be able to get out of the market when you choose instead of having to split the trades over various trades (increasing costs).
Once you have made a performance-based selection, you need to see the fundamentals, which we will discuss in greater depth another time but basically you are looking for strong profit increase and dividend payouts. In the case of VT Group, it makes sense that it has underperformed, because it is not only a shipbuilding company as it also manufactures various products for the defence industry (also a strong growth sector).
Given the above I would suggest a purchase of VT group on the LSE at a price of 485 or lower is a very good purchase with a target price of 590. This would also be a good buy-and-hold position for the long term.
This is their website: http://www.vosperthornycroft.co.uk/
Please let me know if you have any questions by leaving comments, I will answer as many as I can.
Until the next thought, see you next time.
Please be warned that this is not the right approach to investing but some times, you have to look into sectors that you normally don’t look at. My view on Gold is to hold the position you have now at these levels (profit taking at 650 and re-buying at 580). Silver looks good and is trading at a similar level to Gold.
I have done some research and as it turns out, the higher oil prices as well as the increasing world trade with emerging markets growing rapidly, have increased demand for shipping. The thing about shipping is that it has a slow turnaround which means that it takes years for orders of new ships to be filled. The profits of shipbuilding companies are increasing rapidly over the last few years and it is not expected to slow down.
Now that we have identified the sector, we look at performance, to see which companies have underperformed so far or maybe are trading in-line with the sector. VT Group trading in the London Stock Exchange (LSE) seems to be underperforming and is also trading in a major market unlike most of its peers, this is important because the traded volume is higher. Volume is important because the price fluctuates less and there is enough trading to be sure that you will be able to get out of the market when you choose instead of having to split the trades over various trades (increasing costs).
Once you have made a performance-based selection, you need to see the fundamentals, which we will discuss in greater depth another time but basically you are looking for strong profit increase and dividend payouts. In the case of VT Group, it makes sense that it has underperformed, because it is not only a shipbuilding company as it also manufactures various products for the defence industry (also a strong growth sector).
Given the above I would suggest a purchase of VT group on the LSE at a price of 485 or lower is a very good purchase with a target price of 590. This would also be a good buy-and-hold position for the long term.
This is their website: http://www.vosperthornycroft.co.uk/
Please let me know if you have any questions by leaving comments, I will answer as many as I can.
Until the next thought, see you next time.
posted by Private Banker at 11/12/2006 07:34:00 pm
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