Qantas: How come nine analysts had ‘buy’ ratings?

Qantas Limited (ASX: QAN) yesterday announced a surprise profit downgrade – well a surprise to many, but not me. As I mentioned a few weeks ago, “Airlines are notoriously bad investments – In aggregate airlines globally lose billions most years.”  The share price subsequently dropped 18.7% to close at $1.155.

What was most surprising to me was that nine out of 13 analysts had a ‘buy’ or ‘strong buy’ rating on the stock before the announcement. How did they get it so wrong? I have several possible explanations for that.

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Hastie Group – The writing was on the wall

In today’s Australian Financial Review, Hastie Group Limited (ASX: HST) director Harry Boon blames three of the company’s seven banks yesterday for refusing to take a write-down on their debt s th reason for the collapse of Hastie Group.  He said that directors had tried hard to budge the banks, after the company had found two willing financiers, but according to Mr Boon, the banks were acting unreasonably.

Well, I beg to differ. The collapse of Hastie Group and the loss of 2,000 jobs had nothing to do with how the banks acted. Hastie Group was an ordinary business, with low profit margins, poor returns on equity, and constant capital raisings and new debt financing, it was always going to struggle. Directors are the ones to blame for the collapse of the company. If they had concentrated on making the business profitable, and not gone on a spending spree, acquiring companies at ridiculously high prices, Hastie may have survived. Read more of this post

Is JB HiFi going to do a “Steve Bradbury”?

Steve Bradbury was an Australian short track speed ice skater who won the 1000 metre event at the 2002 Winter Olympics when all of his opponents crashed at the last corner.

He only made the final after finishing third in the quarter finals, when the defending world champion was disqualified from the final. His tactic during the final was to cruise behind his opponents, and hope they crashed, as they would be taking greater risks to try to win, and he reasoned that they could crash. Read more of this post

Where can I get financial data from for free?

As a personal investor, it can be tough to get free financial data on Australian listed companies. In the US in particular, on sites such as Reuters, Google Finance, Yahoo Finance plus many others, you can find loads of information regarding US stocks, including brief analyst forecast information, historical ratios and financial statements. For Australian stocks, it’s much harder, but as I discuss in this blog, you can get data from a variety of sources for free. Read more of this post

Austock portfolio versus the model portfolio update as at 14 May 2012

Austock portfolio versus model 14 May 2012

So, its been sometime since I updated the status of the two portfolios, and with almost two months to go (6th July 2012 is the finish date), it’s not looking good for both the Austock and model portfolios. Read more of this post

Would I buy shares in Warren Buffet’s company – Berkshire Hathaway?

While this might be controversial, there are several issues I see with investing in Berkshire Hathaway (BRK-A, BRK-B), that would stop me from buying shares. While I’m a great admirer of Warren Buffett and Charlie Munger, as an investor, I want to know when and how I will receive a return on my investment. There’s not much point in investing in something, if you can’t envision the end game. At some point as an investor, you either want to be able to sell the investment and make a profit, or you want to receive a return along the way (usually in the form of dividends).

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JB HiFi: Is NOW the time to buy?

JB HiFi Limited’s (ASX: JBH) share price has been pummelled over the last year and is down 40% since 29th March 2011, and currently trading at $11.06.

As my Motley Fool colleague Bruce Jackson mentioned in this article, “You don’t make money looking backwards. Yet so many people do exactly that. They look at the recent past, and extrapolate that deep into the future.”

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