FYI | Jul 08 2020
By Peter Switzer, Switzer Report
On April 27, I thought it was safe to look at stocks that the analysts maintained had a huge amount of upside. My argument was that we look at those stocks with a lot of potential gains. And even if the experts are only half right, then we might be able to seize a few bargains created by the crazy sell-off linked to the Coronavirus and the lockdowns, as well as closures that surprised all of us.
As we wait to see if the rising infection rates in the USA (and to a lesser extent the challenges in Victoria) will spook stock markets and give us another leg down, (which I think will create another buying opportunity), let's see what has happened to anyone who took my tips and those of the analysts.
These stocks were said to have 16% to 40% + upside:
Of the 28 top 200 stocks I put the spotlight on, 4 went backwards.
The quality companies even beat the analysts' expectations, with Macquarie up 28% compared to 23.8% predicted, REA was up 29% against 17.3% predicted and Atlas Arteria rose 17% versus 16.5% forecasted, while Goodman Group came in close to on song, up 17.4% against 18% predicted.
Of the potential big upside companies, Charter Hall did the best, up 39% compared to a 78% forecasted rise.
Some companies have shown by their negative trend over the period, that they have structural issues that make them hard to get enthusiastic about. I think Whitehaven and UR Westfield are cases in point, but Sydney Airport only has a temporary issue that will be fixed up when we can fly overseas again.
And that's the point for the forward-thinking investor. The question that person has to ask is: "What was the share price of SYD before all this?"
It was a $9 stock in January and is now at $5.74. The [database of major stockbroking] analysts at FNArena have it at $6.25, which means they're saying there's 9% in the short term. But I reckon there's more in the longer term, which is where I play.
Sometime in 2021 we will be travelling overseas and that's when SYD's share price will be flying high again!
Peter Switzer is the founder and publisher of the Switzer Super Report, a newsletter and website that offers advice, information and education to help you grow your DIY super.
Content included in this article is not by association the view of FNArena (see our disclaimer).
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual's objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
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