The least risky stocks to invest in right now is what we are looking for. If you read our last post you can see that we focused on researching stocks with low debt or no debt in the ASX. We also took into account stocks with low gearing and other factors to get a list of stocks that you can invest it, doing your own further research.
You can check out our last post here for more details.
In this post we will go through some more stock researching to expand on our list of good value stocks to invest in.
As a basic researching process before investing here are a few things you should look into:
· What does the company do?
· Are they earning a regular increasing or steady income?
· Do they have a strong balance sheet or financials – Less geared, less debt?
Once you look at these three, the you could go further and look at EBITDA, Cash flow and more financial data – if you need further scrutiny. Data and analysis is provided as is at the time of writing sourced from leading banking and trading platforms.
Below is a list of stocks that we have researched that fits into companies with low or no debt or low net gearing among other factors which make it more likeable to invest in. In this times of COVID19 crisis, markets are ever changing and we do suggest doing your own research before investing
Alkane Resources [ALK.ASX] $0.68
Alkane Resources Ltd (ALK) is involved in mining operations at the Tomingley Gold Operations. The company is said to be a gold and rare metals miner, however owns most revenue from gold operations.
No long-term debt. They got a positive margin between their assets and liabilities in balance sheet for 2019. Net gearing is at 32.50%.
Apart from directors’ interest, major shareholder right now is Abbotsleigh Pty Ltd which is an investment management firm with shares held at 22%
Alkane’s largest non‐gold project is the Dubbo Project (DP), a large in-ground resource of zirconium, hafnium, niobium, yttrium and rare earth elements. As it is an advanced polymetallic project outside China, it is a potential strategic and independent supply of critical minerals for a range of sustainable technologies and future industries. It has a potential mine life of 75+ years. The DP is development ready, subject to financing, with the mineral deposit and surrounding land acquired and all major State and Federal approvals in place
Advance Nanotek Ltd [ANO.ASX] $4.28
Advance NanoTek Limited (ANO, formerly Advanced Nano Technologies Limited) is a manufacturer of aluminium oxide powder, zinc oxide dispersions and zinc oxide powder for the Personal Care Sector. They cater to markets in Australia, United States of America & Canada, Europe and Rest of the world.
Started generating positive revenue in 2018 and 2019 with good ROE in these years. Good sales in 2019. No Long-term debt and negative gearing is fairly low at 1.90 %
SARACEN MINERAL HOLDINGS LIMITED $4.29
Saracen Minerals Holdings Limited (SAR) is an ASX 200 listed gold company having two operations in Western Australia- The Carosue Dam Operation and The Thunderbox Operation.
They have steady rising earnings from 2014 onwards, good cashflow, no long term debt and reasonable market capitalisation. The net gearing is at 24%.
Income is mainly from Australia from Exploration, development, production & admin. Its got Van ECK and Black Rock as substantial shareholders at time of writing
RESMED [RMD.ASX] $25.02
It’s into Health Care, Health Care Equipment & Services
It’s got stable cash flow and good earning history and ROE over the last 10 years. Its net gearing is at 54%. Its got long term debt of 1,795 (million or m) vs shareholder equity of $2,955
Brambles Ltd [BXB.ASX] $10.76
It provides Industrials, Commercial & Professional Services – mainly pallets and packaging to retail companies.
It’s got stable cash flow and good earning history and ROE over the last 10 years . Increased a bit of capital spending in 2019. Net gearing is low at 13.40 % and they have long term debt obligations at $2,343(m)
ANSELL [ANN.ASX] $8.60
They are into Health Care, Health Care Equipment & Services – mainly involved in the development, manufacturing and sourcing, distribution and sale of gloves and protective personal equipmenIt’s got stable earnings over the last 10 years, with a bit of decline in 2017 and then picking up again.
ROE has improved in 2019 after a decline in 2017 and 2018. Net gearing is 10.40% and long terms debt is $749 versus market capitalisation of 3,552.
Coco Cola [CCL.ASX] $8.52
Coco cola has steady and good earnings history and ROE. We don’t like the net gearing which is sitting at 94% and it does have long term debt obligations. It has a 52-week high of $13.80
It deals in food, beverages, tobacco and consumer staples
Objective Corporation Ltd [OCL.ASX] $0.58
It is into Information Technology, Software & Services. They are an IT company providing content and planning solutions with income coming in from Australia, UK, New Zealand and expanding into overseas markets.
OCL has steady and good earnings history and ROE. Reasonable sales increases and steady cash flow. It has long term debt of $10 (m) and market capitalisations of $260 (m)
Don’t like the net gearing at 75%
Wisetech Global Ltd [WTC.ASX] $16.07
Steady rising earnings since 2016 onwards. Increasing sales in last four years with positive cash flow. 100 %franking dividend. Hold long term debt of $0.74 (m) and negative gearing at 33.80%.
WiseTech, Crown and Vicinity have downgraded future earnings based on 4 to 8 weeks of travel restrictions. These are projections, but what’s interesting is – can the COVID-19 might in some cases be used as a reasons to cover other issues in companies, especially when the management teams from companies operating in the same industry don’t use the virus as a reason for flagging sales and profits.
Those that didn’t make our mark
Below is the stocks from my sticky note that didn’t make the mark. The main factors for striking out the below stocks from our current buy lists is no earnings, debt obligations, poor ROE, poor cash flow and poor net gearing.
We have ruled out the below not necessarily for all of the above factors , but also a mix of these factors mentioned.
Penny stocks OR small cap
PM8 OLL WOA CAN $0.86(No earnings yet, while sales and balance sheet look good right now, we don’t like net gearing and cash flow) MDC AAR PLS $0.20 ( Same situation like can above) AUL FAR AVH $0.44( same as Can and PLS but with higher netgearing) LVT SZL MME SPT OSL KYK BUB SLC BRN