Have you sold your entire portfolio over the whole 'Greece' situation yet?
No?
Better get a move on….
Just kidding, don't do that!
Quality stocks are still a compelling way to grow your wealth, and that's even more true when prices are fluctuating, because you can get a better deal. Readers looking for great value can find out where not to look in this week's 52-week lows, while at least two other stocks smashed by 'confession season' appear to be great value.
The three stocks in this article have all seen a major re-rate on their price recently, and here's my take on whether you should buy, sell, or hold at today's prices:
Collins Foods Ltd (ASX: CKF) – last traded at $3.10, up 49% for the year
The Australian KFC, Sizzler, and Snag Stand franchise owner has displayed a cracking performance over the last 12 months, with shares rising from just over $2 after the company turned in a very strong set of results. Curiously, the company actually posted a statutory loss for the past 12 months due to a write-down on its Sizzler business. While it's uncertain as yet what will happen with Sizzler, the other franchises have turned in a respectable performance.
I don't believe Collins can replicate its share price performance again in 2016, but it does look to be trading at a decent price with some strong businesses, and I would consider the stock a 'Buy'.
Sonic Healthcare Limited (ASX: SHL) – last traded at $22.34, up 29% for the year
Sonic has continued its upward run, reaching new heights after appearing in this article two weeks ago. Positive sentiment has built on the back of some recent earnings-accretive acquisitions, and the company does appear to have small but steady long-term tailwinds thanks to its geographic diversification, an aging population, and an increasing demand for diagnostic scans.
However at a price of over $22, I think the stock is expensive, and I would ideally like to see it under $19 before I consider a purchase. Sonic looks to be a 'Hold', although I believe shares could rise further if the business deliver's strong full-year results.
Asciano Ltd (ASX: AIO) – last traded at $7.84, up 38% for the year
Finally rail and port operator Asciano has soared this week after a non-binding takeover offer was made, valuing the company at $9.05 per share. Shares jumped $1.30 on the news, although they still trade substantially below the offer made for the company.
Some journalists have even speculated that the company making the takeover, Brookfield Infrastructure Group, will need to increase its offer in order to get the deal across the line. I feel that $9 is already a substantial premium (valuing Asciano at a P/E of ~20) and adequately compensates existing shareholders given that shares haven't traded anywhere near this level since before the GFC.
However, the ball is back in Brookfield's court and it remains to be seen if a full takeover offer will emerge at all. I believe it will, but with no certainty of receiving $9 per share, Asciano shares look expensive today and I consider them a 'Hold'.