Today you and I are going to have a look at three stocks. Stocks fit into three baskets, it might sound simple, as it is. But it is important to not lose track of these baskets. I want to start by defining these baskets, as I will refer back to them today, and in future posts.
BUY: A2 Milk (ASX:A2M)
These guys have been mentioned here before, for good reason. The stock has recently enjoyed solid growth, so you might be sitting there saying it’s too late to board the train. But when you draw comparisons to BAL and to a lesser extent BKL you’ll see that there is real potential that the early growth is just the beginning. To understand a bit more about what A2M here is what we’ve written previously.
As we spoke about during Singles Day Unfortunately, we could not get stock quote ASX: A2M this time. and other milk powder producers are in hot demand. While the cynics are wondering what we did for so long without the fancy and vast range of baby formula, I say get involved. They have the unique advantage of owning technology that will see them own the A2 protein milk industry, which is also set to boom.
Hold: Westpac Bank (ASX:WBC)
Here at the Blue Lake we have suggested caution in buying these ‘blue chip’ bank stocks. But I would stop short of rushing out to sell. It was only April this year that saw Unfortunately, we could not get stock quote ASX: WBC this time. reach all-time highs. Despite this recent months have proven tough for the poor big four. Last week saw a slight surge back, but investors ended the week 20% down from that April high.
But the two key questions? Well the industry is sound, it’s an oligopoly with demand that has no choice but to keep coming back. And the management is okay too. Now the position is appetising enough for me to have a crack, but if you’re holding the stock it probably isn’t panic stations just yet. Now could you get higher returns elsewhere? It’s a high possibility.
Sell: Santos Limited (ASX:STO)
It’s hard not to sympathise for the oil tycoons. They were on top of the world, demanding ludicrously high prices in the peak of demand, making profits only beaten by our friendly bankers. Now the world is changing, China is slowing and our global conscious is moving away from the big bad fossil fuels. There is talk that this switch will see a new boom in the markets for environmentally friendly, sustainable energy.
But that obviously spells the end to the industry that Unfortunately, we could not get stock quote ASX: STO this time. is so reliant on. Right now the group is trading at its lowest levels. The boardroom at STO would be working out how they can transition and reinvent themselves, but for the time being, your money is better elsewhere. While we all love a comeback story, the group is behind the likes of WPL in cash reserves, and any returns would be well into the future. I’d be putting my money elsewhere.
We are going to have more posts like the above, and a even a few more funky info graphics. If you want them put your email address below and join the family here at Blue Lake Invest.