Discuss stock picks that are available in the app?


#1

Just wanna get some ideas and other people’s due diligence for investments that you are making within the app.

I’ll start, I looked through nearly every stock available in the app, at the share price history and what market they’re in. In my view good companies to invest in currently for the foreseeable future are tech companies and biotech/medicine. I have a friend who works in medical devices who has said they expect large growth over the coming years, in that market. I started reading articles about UK company, AstraZeneca. They’re growing rapidly in the US and also China [1][2], which is experiencing large growth in the healthcare market [3]. That’s the only stock I’ve bought so far, a few weeks ago, which is +7%, but I’m looking more long term.

I also have some knowledge of new drug trials from speaking to people who are knowledgeable in this area. There don’t seem to be many tech companies available to buy, which is probably an accurate reflection of the UK market for large tech companies. The NASDQ 100 fund looks attractive, however, and is available and is probably a low risk bet if holding long term. What stocks/funds are people buying and what was your research that led to this?

  1. https://www.bbc.co.uk/news/topics/cz4pr2gd52lt/astrazeneca
  2. https://www.reuters.com/article/us-astrazeneca-china/astrazeneca-plots-china-robot-offensive-to-counter-price-cuts-idUSKCN1LZ0HO
  3. http://www.china-briefing.com/news/healthcare-reforms-underscore-market-growth-china/

(Chris) #2

There a couple of things I consider when buying so maybe this helps?

  1. Pure fundamentals of the business, Yahoo Finance is my friend here. I also have access to an Eikon terminal but that won’t help many people. Main things I look at is cash generation and ROCE - total (not net) debt is a 3rd
  2. Do I understand the business. If I don’t understand how that industry works then I’m very unlikely to invest. If I’m not confident of saying how good or bad a company is vs competitors then I always feel like I’m starting behind.
  3. Does a business have a tangible competitive advantage? tangible being the important word there, every business will feel it has an advantage in someway but is there one that that you could value if required. I learned the hard way with Stobart Group a few years ago.
  4. Do I trust the management? Honestly speaking most FTSE 100 companies are run by people that are no more capable than you or I. The markets are then shocked when news hits, Vodafone & Micro Focus are good examples of this. I have to trust them with my money.
  5. Understanding the current ownership of the company. For many of the companies that FT offers they are predominately owned by mutual funds / etf’s etc - but I’m conscious when Private Equity is involved or when Activist investors come along seeking change as they’re typically seeking short term gain which can be counterintuitive to my long term investment.
  6. The real impact of news. Lots of news stories hit that create a very negative environment, short selling and regular selling comes in and markets crumble. However in most cases negative news is nothing but a ‘blip’ on the markets. Take British American Tobacco’s recent dive from the FDA clamping down on menthol cigarettes, their menthol business in the US is big but its not 10% of the company (the drop it suffered). Similar story with China lately, sure the economy is slowing - but is anybody really saying that it wont be a bigger economy than next year - yet the markets seem to think its contracted YTD