MENU

Should you follow the fund managers into these 4 shares?

Watching what the professionals buy (or sell!) can sometimes be a useful source of investing ideas. If nothing else, it can prompt investors to do a little further research. The K2 Global Equities Fund (Hedge Fund) (ASX:KII) (known by Google Finance as K2 GLB EQU TMF UNITS) recently revealed in its February monthly report that 4 Australian companies were among its largest holdings. Here’s my take on whether these businesses are worth a closer look by Foolish investors:

Medical Developments International Ltd (ASX: MVP)

A $300-million drug developer, Medical Development’s Penthrox drug is a non-addictive opiate alternative that has been gaining approvals throughout the world. Profits at the most recent half-year were just $0.4 million, although sales are just getting started. Expensive, but could prove worth the price as sales ramp up.

Money3 Corporation Limited (ASX:MNY)

Valued at $250 million, Money3 is an unsecured (read: higher risk) finance lender that has been growing revenues and profits strongly in recent years. While the business has been growing strongly, dividends have been reduced in recent times and Money3 also has competition in the second-hand car loan space from the likes of Carsales.

Updater Inc (ASX: UPD)

A USA-based technology company that is revolutionising the way people move house, it’s tough to recommend Updater to a Foolish audience. While the company does have a cash balance equivalent to just under half its $120 million market capitalisation, it is burning cash at a prodigious rate, and break-even appears a couple of years away.

Think Childcare Ltd (ASX: TNK)

A $100-million childcare operator, Think Childcare is a guppy compared to the likes of G8 Education Ltd (ASX: GEM). The company appears to be using a similar strategy of acquisitions to grow its business, although its costs are higher and management appears to focus more on delivering a high quality educational experience. With some prudent financial management, Think could become much bigger over the next 5 years.

Here are 3 more share ideas that I think are a great opportunity at today's prices:

3 more great buys for 2017

For many, blue chip stocks means stability, profitability and regular dividends, often full franked..

But knowing which blue chips to buy, and when, can often be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.