THE IDEAL STOCK
In Peter Lynch's book 'One Up On Wall Street', he devoted
a chapter to 'the ideal stock', which had thirteen requirements.
Here is how ACLNF stacks-up against these requirements.
(1) IT SOUNDS DULL - ACLN Ltd ? - real catchy name
(2) IT DOES SOMETHING DULL - ferries used cars ? .....ZZZZZ
(3) IT DOES SOMETHING DISAGREEABLE - well car ferries
are usually big, smelly, dirty, greasy, oily messes - disagreeable
enough ?
(4) IT'S A SPINOFF - started 21 years ago as a shipper to
Tunisia. Became Hemswell Holdings in1993. Then renamed
ACLN LTD in 1996....more a grandson than a spin-off.
(5) INSTITUTIONS DON'T OWN IT AND ANALYSTS
DON'T FOLLOW IT
- Institutional ownership is only 3% and I'm the only
'analyst'. There hasn't even been a chat room board
following it until now.
(6) THE RUMORS ABOUND - I can imagine them
all now... Oh-oh, this is a foreign stock ! So where's
Belgium ? Africa - gimme a break. ! ...The same kinds of
worries that used to keep investors out of casino and
Italian restaurant stocks (- they're run by the Mafia, aren't
they ?!)
(7) THERE'S SOMETHING DEPRESSING ABOUT IT
- (1),(2), (3) and (6) have already got me in a mild depression.
(8) IT'S A NO-GROWTH INDUSTRY - this ain't the Internet.
Just like the funeral business where no-one is interested
in competing, so ACLN just adds one country after another.
(9) IT'S GOT A NICHE - when a North African or Egyptian
heads for Belgium to buy that little Toyota, you can be sure
that before he goes, he has already talked to a previous buyer
about return transportation and ACLN is almost certainly
the transporter who was previously employed - better the
devil you know...
(10) PEOPLE HAVE TO KEEP BUYING IT - until we
have Star Trek teleporters or Toyota starts making
amphibious vehicles, these used cars will always have to
be ferried by sea (local car production also very unlikely
for a long, long time)
(11) IT'S A USER OF TECHNOLOGY - I'm sure they
use computers, faxes, e-mail, cell phones, radar, GPS
-enough technology ?
(12) THE INSIDERS ARE BUYERS - well, as the insiders
already own most of the stock, there wouldn't be any
left for you or me to buy, if they bought more shares.
(13) THE COMPANY IS BUYING BACK SHARES -
- they have announced a 250000 share buyback
...looks like 12 out of 13 apply. That's about the closest
result I've seen to the 'Lynch ideal stock'. Couple these
with the excellent fundamentals given in earlier posts
and this looks like a no-brainer winner.
Next: VALUATIONS
FWIW,
Frank McV |
