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Is it time to sell?

Media Room, On the Internet, Value.able | Comments (29)

Is it time to sell?

If you take your cues from price rather than values, fear may have recently set in. For Value.able investors, a market correction is a reason for celebration rather than consternation. Roger Montgomery explains why holding on may be the wiser decision. Read Roger’s article

INVEST WITH MONTGOMERY

Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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29 Comments

  1. Brad
    :

    My iv for voc is > $3 for 2012

    Lots of growth ahead for this well run IT / Comms company

    Great article in Tuesday’s afr on growth in data traffic driven by smart phones and tablets

    2 months ago I had home delivered, AFR, Age, Australian newspapers. I now get the oz and as of this week age and SMH on iPad.

    I’m sure AFR iPad app not far off and no more trudging out to the front yard at 630am in my pj’s

  2. Denise
    :

    Hi Roger
    The table in the article lists Worley Parsons code as WPL and the corresponding price at $45.07. WPL is Woodside Petroleum Ltd

    Worley Parsons code is WOR and price in May would have been somewhere between $28 and $31

    Did I missed a great sell opportunity!! Unfortunately not!
    Denise

  3. Michael H
    :

    the article also has a typo which is rather misleading, the code for Worley is WOR not WPL and thus the “price now” is around $30 not $45, the price of Woodside as stated in the table

    • Lloyd
      :

      And the more relevant question: Is it too early to buy?

      Those margins of safety still look pretty skinny given the 2012 IV’s are based on some pretty inflated analyst expectations!

      So what do you think?

      • Greg Mc
        :

        G’day Lloyd,

        With the market down a whole whopping 6% from the 12 month high set in April, if it wasn’t outrageously cheap then, it still isn’t now. Selected things might be on the cheap side, but those margins could easily expand further.

      • Lloyd
        :

        No – to correct your misunderstanding, like Shelley I used it:

        Time Long Past
        by Percy Bysshe Shelley
        (1803-1822)

        Like the ghost of a dear friend dead
        Is Time long past.
        A tone which is now forever fled,
        A hope which is now forever past,
        A love so sweet it could not last,
        Was Time long past.

        There were sweet dreams in the night
        Of Time long past:
        And, was it sadness or delight,
        Each day a shadow onward cast
        Which made us wish it yet might last-
        That Time long past.

        There is regret, almost remorse,
        For Time long past.
        ‘Tis like a child’s belovèd corse
        A father watches, till at last
        Beauty is like remembrance, cast
        From Time long past.

      • Lloyd
        :

        Shelley’s “Time Long Past” provides a beautiful metaphor for the prism through which many view past share/market price action as being relevant to current share/market valuations forgetting that the period 2003-2007 …”is Time long past. A tone which is now forever fled, A hope which is now forever past, A love so sweet it could not last, Was Time long past.”

        Yet the longing for a return to the Past persists, to the point that it overrides most investors understanding of the current reality, indeed the irony, of a deleveraging consumer based global GDP, which is being sustained momentarily by burgeoning, but unsustainable growth in Government debt.

  5. Geoff B
    :

    Roger,

    I am a little confused. In this article you have the IV of ORL as $8.96, however, under your blog ‘Is it time to clean up your portfolio’ , dated 11/5/11, you have the IV for ORL as $6.99. I tend to suspect the IV of $8.96 was beofre the release of their last figures and that the $6.99 is what it should be today.

    Geoff

    • Roger Montgomery
      :

      Yes Geoff,

      Very long lead time in magazine publishing but those valuations are from the date those stocks were first talked about (over the course of the last year).

  6. Brad J
    :

    Hi Roger,

    Nice article but is your IV for Vocus meant to have a 2 in front of it or am I missing something? In your article in the Eureka report dated the 18th May you have the IV at $2.45.

      • Dave T
        :

        Hi Roger,

        Hate to be fastidious; but, I think under the company name, you’ve used WorleyParsons instead of Woodside. You had me anxiously double-checking my IVs there for a few minutes!

      • Brad J
        :

        Hi Michael,

        Rogers valuation for it must have changed then since the 18th of May, which isn’t long ago. Seems a bit strange that he purchased it at $2 and if this value is right it is significantly more than his current IV assuming this article is correct. Would you please clarify this Roger rather than us all trying to second guess if a typo has been made or not?

      • Ian
        :

        Hi Roger,

        I am still a bit confused.

        In the money magazine article it has the intrsic value of Vocus listed at $1.74 with a date of edition of APR’11.

        The April 2011 edition says ” I estimate Vocus’s Value.Able intrinisc valuewill increase almost 20% over three years, rising from my current estimate of $2.45.”

        Which I understand to mean that the intrinsic value for Vocus was $2.45 when you wrote the column for the April 2011 magazine.

        Or is date APR’11 the wrong date in the current article?

  7. Rod h
    :

    It doesn’t state when the Intrisic Value is accurate to.
    Is it at the edition date or is it as of 13- May ?

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