๐๐ ๐๐๐๐๐๐จ ๐๐ฃ๐ ๐๐๐ฃ๐ฉ๐ก๐๐ข๐๐ฃ,
Over the next few weeks and months I am going to make a post like this for each stock in the portfolio.
This is to explain to you all what I look for in a stock, where the company is currently at financially and why it is in the portfolio. ๐๐ค๐ง ๐ฉ๐๐ค๐จ๐ ๐ค๐ ๐ฎ๐ค๐ช ๐ฌ๐๐ค ๐๐ช๐ง๐ง๐๐ฃ๐ฉ๐ก๐ฎ ๐๐ค๐ฅ๐ฎ ๐ข๐, ๐ฌ๐๐๐ฉ ๐ฎ๐ค๐ช ๐๐ค๐ฅ๐ฎ ๐๐จ ๐ฉ๐๐ ๐๐ค๐ก๐ก๐๐๐ฉ๐๐ค๐ฃ ๐ค๐ ๐๐ช๐จ๐๐ฃ๐๐จ๐จ๐๐จ ๐ฌ๐ ๐ค๐ฌ๐ฃ, so its good for you all to understand the logic behind why we own each of those businesses.
I thought I would start with our largest position so far, $PLUS.L (PLUS 500 LTD)
The most common question I get regarding positions like this, why are you still holding, why not sell and realise the profit?
Well good companies are hard to find. I am a strong believer in buying a great business and holding long term. I only ever sell a stock if the underlying fundamentals have declined, the price has appreciated to a ridiculous level, or I find another great stock that I would like to add to the portfolio and need to raise some capital.
But for now, I will continue to hold plus 500 for the long term.
The company has a great financial story.
๐๐ค ๐๐๐๐ฉ - I love this. It is easy for a company to be stable and offer value to the shareholders if it has no debt!
$๐ด๐ฌ๐ฌ ๐๐๐ก๐ก๐๐ค๐ฃ ๐๐ฃ ๐๐๐จ๐ - Who doesn't love money in the bank? It shows a safety net, the opportunity to invest in the business and the chance to pay the shareholders.
๐๐๐ซ๐๐ฃ๐ช๐ ๐ค๐ $๐ณ๐ต๐ฎ ๐๐๐ก๐ก๐๐ค๐ฃ - High and consistent revenue - Roughly 25% of market cap
๐๐ฝ๐๐๐ผ - Earnings before interest, tax, depreciation and Amortization - $๐ฏ๐ฐ๐ด ๐๐๐ก๐ก๐๐ค๐ฃ, This is essentially the profit of the business, it is a nice amount of money, often finding its way back the shareholders through dividends and share buybacks
๐๐ฝ๐๐๐ผ ๐๐๐ง๐๐๐ฃ - ๐ฐ๐ฐ% - This is very important. Basically what % of the income ends up as profit. The higher the number, the greater the safety net. The more a business can afford increased in costs or a decrease in revenue and remain profitable.
๐๐ง๐๐๐ ๐ฉ๐ค ๐๐๐ง๐ฃ๐๐ฃ๐๐จ ๐ง๐๐ฉ๐๐ค - ๐ญ๐ณ.๐ฎ - A great simple ratio, For each dollar of profit, what do we pay for the company? With the current stock market highs, its hard to find great business under 20.
๐ฎ๐ฌ๐ฎ๐ฑ ๐๐๐๐ง๐๐๐ค๐ก๐๐๐ง ๐ง๐๐ฉ๐ช๐ง๐ฃ๐จ - $๐ฏ๐ฒ๐ฑ ๐๐๐ก๐ก๐๐ค๐ฃ
(Dividends + Share buybacks)
As a shareholder, I love to the see the combination of both share buy backs and dividends, it shows the company is performing well and giving back to shareholders.
My long term goal on Etoro is build a collection of great companies, who continue to make money regardless of any market conditions or political environments. This will offer long term capital growth a nice steady income stream.
The image below has been made through ChatGPT, just summarising the data above.
As always, thanks for reading, if you have any questions, ask away!
Rhys Adams
... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
one of the best perfomers as well.
Nice post!... Show More
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