Investors should watch these stocks
Australia has led the world in capital raisings following the global outbreak of COVID-19 and that has produced three stocks to watch. Effectively, these stocks to watch have been giving with one hand, paying dividends, and then taking with the other, requesting injections of equity.
Why are we watching these stocks?
We are watching these stocks because when a company has a high return on equity and reinvests its profits, it achieves a compounding effect which is essential. This means the stock is focussed on growth, which is why these are three stocks are stocks to watch. It’s no accident that two of the stocks to watch are family controlled. As one of my colleagues said: a good owner is not interested in the financial chicanery paying out excessive dividends and weakening the company’s foundations.
Stocks To Watch: Hansen Technologies (HSN)
This stock to watch is a family controlled company that has been around for almost 50 years. This ASX stock to watch might be a technology company, but it’s not a “sexy” technology company. This stock to watch flies under the radar because it provides boring billing software for infrastructure companies and telcos. The thing is, its customers are blue chip and they stick. On top of that, the company only pays out of its earnings in dividends. To find out if this stock to watch is a Buy, Hold or Sell, join here.
Stocks To Watch: Macquarie Telecom (MAQ)
This stock to watch is also not at the “sexy” end of the IT space because it owns and operates buildings that house reems and reems of servers (aka data centres). The stock to watch was founded by the Tudehope brothers, who maintain control and has always had a longer-term return horizon than most fund managers wanted, until they did. Then they rushed in. The stock to watch is not paying dividends this year as it concentrates on a major data centre related expansion. Luckily, before COVID-19 hit it had all its ducks lined up, having secured the debt finance required. To find out if this stock to watch is a Buy, Hold or Sell, join here.
Stocks To Watch: Infomedia (IFM)
When we first covered this stock to watch the founder Richard Graham tried comparing the car parts publisher’s exploits to Johannes Gutenberg’s invention of the printing press. We didn’t buy that, but our portfolio bought this stock to watch and haven’t looked back. Now run by other people following some board infighting a few years back, the stock to watch has continued to go from strength to strength, capitalising on the benefits its product delivers for car dealers, who need the extra income from parts when sales aren’t up to scratch. Unfortunately we have been using this stock to watch to generate cash, nervous as we are about the future of its customer base of giant auto manufacturers. To find out if this stock to watch is a Buy, Hold or Sell, join here.