Stock Market Recommendations

Day 867, 20:29 • Published in USA Australia • by ndvanderhoofven

Stock Market Recommendations

I have previously written about eRepublik's Mega Corporations, and Large Corporations. Large corporations are good because they make large investments in heavy industry which a single investor can't. Out of these 26 corporations, are there any that I would recommend purchasing stock in? If I were to give advice, which I am not (wink wink), here are my recommendations.

First, I would avoid bank stocks without more information. It is unclear whether their listed asset values includes only gold on hand or also loans outstanding, and whether it excludes deposits. Furthermore, I would want to know the quality of the loans and the interest rate paid on deposits. Plus I want to invest in heavy industry, not in an intermediary. So I exclude these stocks from my list: WBI, TJB, BCOM, USB. I exclude MCI which appears to mostly own stocks in other companies, and BJC because it appears to have a heavy investment in the eRepX exchange and not enough heavy industry for my taste. Also AIB which is mostly a betting agency.

Next, I like heavy duty industry and manufactured goods, in particular Q4-Q5 diamond, food and grain, as these should be the most profitable right now. I specifically include these stocks: UGD, SMF, WHC, VIP, DAG, LBP, DCM, BSB, CBIN, ANOR, UDEA, CPN, MED, ADG, TFBS, FNC. I exclude DMN which is too invested in construction, and CUP and ITG, which don't have enough invested in food. I exclude DAG because it isn't audited and I don't see where the 5000 book value is coming from. I also don't see where CBIN's 1800 value is coming from.

Third, I like to see stocks that are undervalued, relatively speaking. We don't know anything about earnings, so I will focus just on price to book value (PBV). The PBV of my 14 remaining candidates are:
UGD - 3.0
SMF - 1.6
WHC - 1.4
VIP - 0.83
LBP - 3.0
DCM - 1.2
BSB - 13.72
ANOR - 1.5
UDEA - 1.39
CPN - 1.49
MED - 3.93
ADG - 4.9
TFBS - 2.75
FNC - 1.07

The winners are:
1. VIP (VIP Corp). This Russian conglomerate owns 11 companies, 10 of which are Q5, including 3 Q5 food companies. Its stock sells for less than book value with a PBV of 0.83. It is a steal at 0.145 gold/share. STRONG BUY.

2. FNC (Finanzen Corp). This Portuguese corporation owns Q5 food, another Q3 food in Greece, two Q3 grain co., and a Q3 weapon. It is fairly priced with a PBV of 1.07. BUY.

3. DCM (Dementu Club). This Indonesian conglomerate owns no less than 5 Q5 food companies, and 3 Q5 weapons companies, and has another 1000 gold on hand to invest. It is fairly priced with a PBV of 1.2. BUY

4. WHC (White Horse Consulting). This Indonesian super-mega-conglomerate owns 8 (or is it 10) Q5 food companies around the world, and has plans to build at least 3 more. It owns a total of either 20 or 22 companies. It seems fairly priced with a PBV of 1.4. BUY.

5. UDEA (UdeA Holding). This Colombian company owns 10 companies, including a Q5 food company in Colombia. It pays out dividends of approx. 4%/mo. It has a PBV of 1.39. It is too focused on the Colombian market. WEAK BUY at 0.213.

6. CPN (CPN Inc). This Polish corporation owns 4 companies including 2 Q5 food companies and a Q4 diamond company. It is perhaps overpriced with a PBV of 1.49 but is priced better than most stocks. WEAK BUY at 0.135.

UPDATE: 7. Since I wrote this, the price for SMF (smeeph) went down so I will add it. This Romanian super-mega-conglomerate owns about 16 companies including 9 Q5 gourmet restaurants. At a share price of 0.141 is has a PBV of 1.4. BUY.