Under the Radar Report helps you invest successfully in the stock market.
Our easy to read summaries and Buy, Sell and Hold ratings make it easy for you to take action!
A stock that is more speculative because there is significant uncertainty about its future profitability. You could make multiples on your investment but also you could lose.
A stock that we believe is buy right now and could be a part of a diversified portfolio
Sell the stock now. This might be for profit or loss.
Hold the stock right now or hold off buying the stock; we're waiting for more information to change our view.
The stock has gone up, it might go up further, either take your costs out and let your profits run, or if you need money sell the stock now.
Tip Update/ Tip Price
The date and price when we first recommended subscribers buy the stock.
It's personal. If you only have a small holding, sell the lot to bank the profits. It you have a big holding, take your costs out and let your profits run.
Key Financial Terms to help you get started
These key investment terms are used frequently in all stock research.
Market Capitalisation is the total market value of all a company's shares. Multiply the total number of shares by the current share price.
It tells you how big or small a company is. $30M is a very small company and we cover companies, initially at least, with a maximum market cap of $500M.
Net Cash/Net Debt
Is a snap shot of the company's financial situation at a point in time. It's calculated by subtracting its debt and financial liabilities from its cash.
Is a portion of the company's earnings that is paid to shareholders. Dividing this amount by the number of shares gives you the dividend per share (DPS).
Is the dividend, or DPS, expressed as a percentage of a current share price. It is normal for it to range from 1%-6%
A quick overview of the financial statements
A company’s accounts consist of the holy trinity of the profit & loss (P&L); balance sheet; and cash flow statements.
The P&L is a summary of the revenues and expenses over the period, which STATEMENTS culminates in the bottom line profit or loss after tax.
The balance sheet
The balance sheet is a snapshot (at the balance date) of the assets the company owns and the liabilities and equity used to fund them.
The cash flow statement
This is the actual money received and paid by the company and is sort of like truth serum. Look for mis-matches, which can highlight fundamental differences between the story a company is selling to investors, versus what is actually happening. E.g. increasing inventories or debtors.
When you first start looking at the Stock Market it can be hard to know how to start investing in shares. It takes courage to start and buy your first share. At Under the Radar Report we don't only help ASX investors choose which ASX stocks to Buy, Hold and Sell but we also value educating our subscribers on how to start investing in ASX shares as a beginner. Our team of analysts have over 150 years of collective experience investing in ASX shares, and we want to help you start buying ASX shares.
To start making money from the stock market, join for a free trial and you will recieve our weekly Stock Reports with stocks to buy. You can add these stocks to your watchlist and then take action when we change the recommendation to either a Hold or Sell.
More research terms explained
Understand P/E rations, EBITDA mulitples and NPAT
The Price-earnings ratio measures a companies current share price relative to its per-share earnings. It tells investors how much they will pay per share for $1 of earnings. If a stock has a PE is 15, investors are willing to pay $15 for $1 of post tax earnings. All things being equal, the lower the PE, the better the value, and vice versa.
Is calculated by dividing a company's enterprise value by its EBITDA. Enterprise value is its market capitalisation plus its net debt (debt minus cash). It looks at a company as a potential corporate buyer would, taking into account the company's debt, which other multiples like the P/E ratio do not include.
Net Profit After Tax after the significant or abnormal and extraordinary items. It is useful because it shows how much the company has made after subtracting all its expenses. From this amount, dividends are distributed.
Earnings before interest, tax, depreciation and amortization. It is used to determine a company's profitability before accounting for its finance arrangements (interest) and its non-cash expenses (depreciation and amortisation).
Operating Cash Flow
The amount of cash generated by a company's normal business operations before capital expenditure (capex) and debt repayment.
Capital Expenditures are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment.
The amount charged in the accounts to represent the decline in the value of the company's physical assets.
The amount charged in the accounts to represent the decline in the value of intangible assets, like software and goodwill.
Free Cash Flow
A measure of a company's financial performance and is calculated operating cash flow less capital expenditures. It is the money left over after normal required spending which a company may use to pursue opportunities that enhance shareholder value.
What are the different asset classes?
Traditional asset classes are:
fixed income (bonds),
With real estate prices in Australia at record highs, and money sitting in your account losing value with record low interest rates, investors are increasingly looking to invest in ASX Shares for long term financial investment.
Australia's large companies are traditionally less volatile and pay our earnings providing an income stream. They pay out their profits in twice yearly dividends to investors at an average of 5-6%.
This dividend yield compares very favourably to term deposit rates which are currently less than 1% in Australia. There are also tax advantages in the form of franking credits.