Wednesday, July 25, 2007
Two new big purchases
Recently I have bought large stakes in two new holdings, RC Group and today Royal Bank of Scotland. Both are way too cheap.
I bought Royal Bank of Scotland at 596p with a price target of 792p.
RC Group I bought at 101.25p with a price target of 135p.
RC Group is a Malaysian-based manufacturer of biometric technology equipment. Finger-print identification systems and the like. It is a growth company trading at only ten times earning with a large amount of cash on the balance sheet. Last week a trading statement was issued to the market, confirming trading for the first six months of the year would be well ahead of forecasts. This was greeted by a large rise but the shares have since fallen below my purchase price. I am considering buying more, via a spreadbet.
Royal Bank of Scotland is a bank. I like banks. They rarely fail to make a profit and usually announce dividend increases. With 2007 earnings forecast to be 72p per share they were way too cheap at 596p and I reckon a fairer price would be 792p. I am concerned, however, that I may have bought at the top of the banking cycle, as now, interest rates are rising worldwide.
Whatever! Royal Bank of Scotland (RBS) pays a large dividend and RC Group will be announcing interim results in approximately six weeks' time. I am probably more optimistic for my portfolio than I ever have been. I now have companies that can deliver and I expect to deliver. With the likes of Fayrewood and nCipher, I was always hoping they would and they never did.
TheArtfulDodger
I bought Royal Bank of Scotland at 596p with a price target of 792p.
RC Group I bought at 101.25p with a price target of 135p.
RC Group is a Malaysian-based manufacturer of biometric technology equipment. Finger-print identification systems and the like. It is a growth company trading at only ten times earning with a large amount of cash on the balance sheet. Last week a trading statement was issued to the market, confirming trading for the first six months of the year would be well ahead of forecasts. This was greeted by a large rise but the shares have since fallen below my purchase price. I am considering buying more, via a spreadbet.
Royal Bank of Scotland is a bank. I like banks. They rarely fail to make a profit and usually announce dividend increases. With 2007 earnings forecast to be 72p per share they were way too cheap at 596p and I reckon a fairer price would be 792p. I am concerned, however, that I may have bought at the top of the banking cycle, as now, interest rates are rising worldwide.
Whatever! Royal Bank of Scotland (RBS) pays a large dividend and RC Group will be announcing interim results in approximately six weeks' time. I am probably more optimistic for my portfolio than I ever have been. I now have companies that can deliver and I expect to deliver. With the likes of Fayrewood and nCipher, I was always hoping they would and they never did.
TheArtfulDodger
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