I’ve always struggled with the concept of describing four stocks I would buy with $10,000.
So rather than speculate about what stocks I would buy under unarticulated circumstances, I’ve decided to write about four stocks I have actually bought with $10,000. In fact, I spent $12,932 on these four shares, so let’s have a look at why I did that, and if those companies are still worth buying today.
I’ve never mentioned the first stock: MedTech Global Ltd (ASX: MDG). It’s a very small and still speculative illiquid micro-cap in a sector that I like a lot, partly due to the ageing population. At its core, the company provides software to general medical practices in NZ, but its products are sold in a few other jurisdictions, including Australia. The company is also attempting to commercialise VitelMed, a, cloud-based technology linking physicians with patients. The initial application will be to monitor patients with chronic heart failure, with the goal of ensuring the fastest possible attention in their times of need.
This kind of innovation suits my ethical bent, and I was happy to take a small speculative position. I spent $1,950 on shares at 19.5c each. The stock last traded at 18c, so I’m underwater so far and still think it’s a good play, albeit a high risk one.
In comparison my more recent investment in Capilano Honey Limited (ASX: CZZ) has provided immediate gratification, as does the consumption of the 100% pure Australian honey it sells. I first researched the company in co-operation with August Investments Managing Director Damien Lynch and bought $4,282 worth of shares at an average price of $5.71, just in time to be entitled to the 20c dividend.
It’s impossible to explain an investment in a single paragraph, but the crux of it is that Australian honey is much healthier and tastier than most other varieties. I believe honey will increasingly become a luxury product and that many people are willing to pay at least double current prices. I believe all honey, and particularly our honey, must (in the future) fetch a much higher premium in places like America, where many honeybee colonies have collapsed.
I expect higher margins to offset lower volumes, which remain my number one concern. I believe it is the duty of the Capilano company directors to advocate for improved regulatory measures to protect bee colonies and support apiarists. If this cause succeeds, the company has a bright future. I will hold my remaining shares, despite the fact they’re up over 25% since I made the mistake of selling some.
Capilano is no longer the bargain it once was, but this little gem of a company has grown earnings per share for five years in a row, and also pays a strong dividend. One director bought shares not long ago and I believe this growing company is at least worthy of a spot on your watchlist. In any event you've nothing to lose from accessing the free report.
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Motley Fool contributor Claude Walker (@claudedwalker) owns shares in August Investments, Capilano Honey and MedTech Global.