RSS FeedQ3 Results Season Ending
Posted by Senan
With most of the Q3 financial results now behind us, it's time to take a breather and digest what we've been presented with. According to NCB Stockbrokers the percentage of companies to beat estimates has come in around the 80% mark. The average apparently is around 61%. This tells us 2 things in my opinion:
- Analysts more often than not get it wrong, so take their recommendations with a hefty pinch of salt.
- Analysts have been slow to 'believe' and back the market rally.
I understand their dilemma. The market has soared, yet the economies of the world still flounder. There is still much financial services reform to be hammered out. Institutions need to make decisions worth millions of Euro. "Do I enter a position, or do I not". Their clients could be angry that they have missed out on the great returns, yet the managers may believe deep down that it is a 'junk rally' and doomed to reverse.
The position of the amateur investor is no better, in fact it is made worse as we are rolling the dice with our own hard earned cash. Although I am admittedly sometimes prone to speculative buys (e.g. E*Trade, Providence Resources), the take away is to try to seek out quality. Companies with good maintainable dividends, good competitive advantage and good growth prospects. Companies that are not going away. A couple of high yielding mid to large-cap shares I'm keeping an eye on at the moment are Aviva and Vodafone.
Aviva
Aviva seems to have it's capital provisions and restructuring/growth under control so I don't expect any real nasty surprises is 2010. It's value has been depressed significantly this year providing an excellent dividend yield, so it's on my watch list. Probably a buy if it hits 380p.
Vodafone
Despite it's size, it looks like there are still growth prospects for this behemoth. Emerging markets, data bundles, utility style network, etc. No real hurry with this one. It trades fairly consistently within the 120p-140p range. If it falls back to the low 120's in the coming months I'll jump in and add to my existing holding (legacy of the Eircom floatation debacle). If it breaks out of the 140 before I buy I'll curse my luck and move on.
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