Reviewing some “losers”

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Question asked 27/11/2021

Reviewing some “losers”

Hi James and team,

I have been enjoying the MM reports, I like the format, the content and the tone. Unfortunately, I didn't have much luck with many of the stocks I picked: SSM, RSG, BVS, Z1P, A2M, IAG to name a few, even though they were recommended as “buy "or "active”. When MM sold some of them I didn't, I only trimmed. As they continue to fall, my (paper) losses are mounting. What is your latest view on the above stocks at current lows? Could they drift much lower? Are some of them likely to recover, even in the longer term? Has the risk reward improved?

Some guidance would be much appreciated.

Thank you.

Denis.

Answer

Hi Denis,

MM only owns A2M and SSM from the list, the balance we sold through 2021 for various reasons however I have provided a brief view on all 6 below:

Service Stream (SSM) – This telco has endured an awful few years including major downgrades in 2020 & 2021 however we do feel the next 15% is up towards $1 – it recorded strong profits and earnings growth in August.

Resolute Mining (RSG) – gold miner RSG has struggled along with the whole sector, our current preference for gold exposure is Northern Star (NST).

Bravura (BVS) – this software business has struggled over the last few years and MM is neutral around the $2.70 area.

Zip (Z1P) – the BNPL space has moved out of favour through 2021 and MM is neutral Z1P in the $5.45 area.

A2 Milk (A2M) – MM still holds A2M with a short-term $7.50 target but we are likely to need improved operating conditions in China to clear the initial $7 barrier.

Insurance Group (IAG) – we mentioned IAG on Thursday, we are neutral around $4.50 but may have interest around 10% lower but its not high on our priority list.

We must always remember there are 2 sides to investing, both buying and selling with the later often harder to navigate i.e. MM does wish we exited both A2M and SSM at higher levels.

chart

a2 Milk (A2M)

LAST UPDATED 26/11/2021 16:33

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