Liquefied Natural Gas Limited (ASX: LNG), Coca-Cola Amatil Ltd (ASX: CCL) and Telstra Corporation Ltd (ASX: TLS) have been the talk of the town lately, but definitely not for the same reasons. With one down a hefty 23% and another up over 1,000% in 2014, here’s what I think you can expect from these hot stocks.
With its juicy fully franked dividend included, those who bought Telstra three years ago have enjoyed a total shareholder return in excess of 100%. The return has enabled the $67 billion telco to surpass its previous 10-year high. However, with shares riding at high levels it’s a good time for investors to sit back and ask themselves if the company can continue on its current trajectory in the short to medium term.
Although it is forecast to grow earnings solidly in the year ahead and its dividend is appealing in the low interest rate environment, I believe Telstra shares now trade around fair value. I believe it is a ‘hold’ at current prices.
Coca-Cola Amatil (“CCA”)
Despite the title of Australia’s, New Zealand’s and Indonesia’s exclusive bottler and distributor of The Coca-Cola Company’s range of products, CCA has had a tough couple of years on the market. So far in 2014, shares are down 23%.
However, the price war between the supermarket giants and rival Schweppes cannot go on forever and I believe now could be a great time for long-term investors to buy the stock while it’s cheap.
Liquefied Natural Gas (“LNGL”)
If you achieve an 11-bagger on a stock (it goes up 11 times in value) within a seven-month period it’s astounding, to say the least. However, the question on everyone’s mind is, can the good times continue? Here’s my take.
When I bought the stock at just $0.32 earlier this year, I believed a fair value for my investment by the end of 2015 would be around $4.00 per share, if everything went right. By 2021, if the company was successful with the Magnolia project’s timeline and achieved 8 million tonnes per annum, I assumed a price closer to $8 per share. However, I didn’t expect LNGL’s stock price to go up so quickly and its purchase of the Bear Head LNG project, was slightly unexpected.
But, considering a lot of the leg work for the Bear Head project has already been completed, I’m happy with the company’s acquisition. It should be noted however that not only does this new project significantly de-risk the company, it affords the company even bigger opportunities in North America. I believe the acquisition adds substantial value to LNGL. In my opinion, the stock remains a good long-term, high-risk ‘Buy’.
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Motley Fool Contributor Owen Raszkiewicz owns shares in Liquefied Natural Gas Limited.
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