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US shares

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
TheMotorcycleBoy
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Re: US shares

#254794

Postby TheMotorcycleBoy » September 29th, 2019, 7:21 pm

monabri wrote:My wife has just sold some unwanted items on Ebay.

The ebay fees were high but PayPal fees were just crazy. They get away with it so would PayPal be a consideration?

Indeed PP fees are insane. I sold a chainsaw last year for about £375. I believe that after I'd paid for signed-on-delivery, insurance, Ebay fees and PP fees I came away with slightly less than £300. I recommend Gumtree no fees. IIRC with that site you arrange prices and meetings with buyers and sellers. I've only ever bought, to date, though via those peeps, and yes it was a chainsaw :lol: .

Paypal at one time, could have been a good punt. Terry Smith thought so once upon a time.
https://www.fundsmith.co.uk/fund-factsheet

But things change fast:
https://www.imrg.org/blog/why-ebay-drops-paypal/

I'm considering Facebook because if Libra does ever kick off, then Facebook could well be a very logical place for private online buy and selling. Who knows?

Matt

SalvorHardin
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Re: US shares

#254796

Postby SalvorHardin » September 29th, 2019, 7:39 pm

Dod101 wrote:Thanks for these most interesting comments SalvorHardin. You are obviously well informed and follow the US market. It is a bit late in my investing career to be attempting the same and maybe I should stick with ITs which have a decent US exposure. A number of mine do have that already of course but maybe I could find one more or less dedicated to the US.

On Kraft Heinz, but for the BH holding, I would not give it a second thought because it is not the sort of management that I would be interested in. The culture seems to be all wrong.

It's never too late :D Yes it is easier to buy investment trusts (e.g. North American Income NAIT, which I hold, is mostly American plus some Canadians) because you don't have to deal with foreign currency and withholding tax. But it isn't that difficult and it enables you to get geographic diversification and to invest in businesses which have no UK listed equivalents, e.g. Union Pacific, Google, Weyerhauser, Mastercard.

I bought my first American share in 1985 (Genentech) which I topped up in 1988. It was a lot harder to deal and monitor back then, especially with the month long wait for the annual report in the post and having to use the Financial Times to check the share price!

Kraft Heinz is a management cockup combined with brands which are weaker than was previously thought and changes in consumer eating habits.

A good share for a conservative investor to look at is Proctor & Gamble. Chances are that you use several of its products (I think of it as America's Unilever). PG yields 2.4%, less withholding tax, it has paid a dividend in each of the last 129 years and has increased it in each of the last 63 years.

Seeking Alpha and the original Motley Fool are excellent websites for private investors (the Fool.com Berkshire Hathaway board is very good, though it used to be better (quite a few muppets post there nowadays who are more interested in stirring things up)

Dod101
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Re: US shares

#254809

Postby Dod101 » September 29th, 2019, 11:12 pm

Thanks SalvorHardin. I did wonder when someone would mention P & G because I do use a number of their products although I prefer Unilever's of course!

NAIT I will look at carefully and it may be that that will 'tick the boxes'.

Thanks again

Dod

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Re: US shares

#263955

Postby TheMotorcycleBoy » November 13th, 2019, 12:48 pm

SalvorHardin wrote:Disney. Superb intellectual property and tremendous synergies with the theme parks. Plus a bit of streaming excitement.

In the absence of dedicated Disney thread I'm dropping this one in here:

Disney Plus growth could catapult Disney's stock price more than 20% over next year, analyst says

* Disney's new streaming platform could help catapult the company's stock price as much as 20% over the next year, according to Bank of America Merrill Lynch.
* The bank's analysts boosted their five-year subscriber target for Disney Plus to 90 million, up from a previous estimate of 60 million.
* Bank of America reiterated its "buy" rating and $168 price target on Tuesday, citing the rollout of Disney Plus as a primary driver of long-term value.

Disney's long-awaited foray into the streaming wars could help catapult its stock price as much as 20% higher over the next 12 months, according to Bank of America Merrill Lynch.

A team of analysts led by Jessica Reif Ehrlich increased their five-year subscriber target for Disney Plus to 90 million, up from a prior forecast of 60 million.

"Based on comparable analysis of NFLX sub growth over the last five years, we believe the accumulation and retention of 90mn subs appears achievable for DIS+, if not conservative," the firm wrote in a note to clients on Tuesday.

For comparison, Netflix added about 111 million over the last five years with the help of some "marquis" Disney content, Bank of America added.

Ehrlich and her team reiterated their "buy" rating and $168 price target, which is one of the highest on Wall Street, based on the long-term value of Disney Plus.

The analysts increased the valuation for Disney's direct-to-consumer business to $37 a share, up from $22 and offsetting a drop in value for the company's legacy businesses.

"These multiples screen rich over the near-term, however we believe they are warranted given the long-term growth opportunity / earnings power afforded by the company's compelling DTC strategy," Bank of America wrote.

Disney's streaming platform launched on Tuesday after months of anticipation. The media giant inked deals with number of distributors including Roku and Amazon, as well as Verizon to offer one year free to the wireless carriers customers in an effort to boost subscribers.


from https://markets.businessinsider.com/new ... 1028682093

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Re: US shares

#264076

Postby widowandorphan3 » November 13th, 2019, 10:57 pm

Plenty of good ideas here, thanks to all.

With Steve Easterbrook's unfortunate end at McDonald's, I took a closer look at this company.

My personal view is that it's a great business, long-term. Simply: it has enormous capacity utilisation.

Most restaurants (I exclude cafes like Greggs, Costa etc.) in my view are terrible businesses. They do the vast majority of their business on Thursday night, Friday night, and some/much of the weekend. But even on those busy periods, they still do virtually nothing in the small hours of Friday AM, Saturday AM, and Sunday AM. Much of the rest of the time they're virtually empty, but paying rent, rates, some salaries and everything else nonetheless. And they get totally killed in recessions as they're an easy item to cut.

Every McDonalds I ever see is doing roaring trade nearly all the time, 24/7 in many places. They are cheap, and give people what they want quickly and efficiently, and have great staff on the whole.

I took a look at their share price chart. Early September '08 - just before you know what - $62 a share. 2 months later, after Lehman, $56 - when the rest of the market was down 20+%, some an awful lot more. At the market nadir in Feb/March '09, $50 or so. Today, $195, or roughly 14% pa since, excluding decent dividends of roughly 2-3% pa on top.

Mr Market correctly deduced that while consumers might stop eating at fancy places, they would have to continue eating out sometimes (eg. workers on the move etc.), and MCD was the cheapest place in town.

If we assume a recession will come sooner or later, we can expect this aspect to return, and while not downturn proof, will survive much better than others. Plus it uses outside capital to fund its expansion (franchising), which while seemingly at saturation point in developed markets, has plenty of upside in EMs etc.

I wouldn't choose it as my only stock - like all firms, it has execution risk, but long term I think it's a reasonably low-risk winner.

WaO

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Re: US shares

#264077

Postby AsleepInYorkshire » November 13th, 2019, 10:58 pm

Dod101 wrote:If you could buy just one US share what would it be? The obvious answer I suppose is Berkshire Hathaway but let's exclude it. For long term growth rather than being too concerned about income

Dod

Microsoft

AiY

TheMotorcycleBoy
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Re: US shares

#264101

Postby TheMotorcycleBoy » November 14th, 2019, 6:27 am

widowandorphan3 wrote:Plenty of good ideas here, thanks to all.

With Steve Easterbrook's unfortunate end at McDonald's, I took a closer look at this company.

Hi WaO

I looked at them a while back over here. To be honest, I got "scared off" by their negative equity. Lots of peeps here suggested I was being a bit alarmist in these low interest rate days. I believe they are well covered. IIRC Salvor also mentioned something about a lot of the -ve in the assets being down to mispriced property on their books.

At the time I also did a quick driveby look at several Yank foodies. Wendys (WEN) looked like a good recovery story, and I checked with a Tennessean internet friend: she said that in some parts of the US they are more popular than Maccy Ds. But again I was put off by their balance sheet. However, I believe that Mr Market looks at them very favourably these days.

Matt

TheMotorcycleBoy
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Re: US shares

#264103

Postby TheMotorcycleBoy » November 14th, 2019, 6:30 am

Nike also look very good in my opinion. But quite pricey. I ended up buying their German rival Adidas (ETR:ADS) the other day instead :) Fingers crossed.

Matt

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Re: US shares

#264129

Postby SalvorHardin » November 14th, 2019, 8:42 am

TheMotorcycleBoy wrote:Disney's long-awaited foray into the streaming wars could help catapult its stock price as much as 20% higher over the next 12 months, according to Bank of America Merrill Lynch.

A team of analysts led by Jessica Reif Ehrlich increased their five-year subscriber target for Disney Plus to 90 million, up from a prior forecast of 60 million.

"Based on comparable analysis of NFLX sub growth over the last five years, we believe the accumulation and retention of 90mn subs appears achievable for DIS+, if not conservative," the firm wrote in a note to clients on Tuesday.

Yesterday Disney announced that Disney+ had 10 million subscribers on the first day of operation. Some analysts had pencilled in no more than 10 million subscribers by the end of the first year. No wonder Disney's shares rose by 7%. I suspect that the good reviews for "The Mandalorian" (i.e. the damage caused to Star Wars isn't terminal) might have had a little bit to do with the rise :D

Jim Cramer of CNBC, who has long been a big fan of Disney (both as an investor and consumer), said: “Today we got the real number. It’s more than 10 million. That’s double my prediction, and I was the biggest bull out there,” Cramer said. Cramer talks about Disney and Disney+ in the two videos linked below:

https://www.cnbc.com/2019/11/13/jim-cra ... l-run.html

Disney, like McDonalds, is a great example of the sort of company that isn't available to investors who restrict themselves to companies quoted in London. A decade ago, when Berkshire Hathaway bought the Burlington Northern Santa Fe railroad, the British investment media suddenly became filled with articles about how to invest in British railways (mostly First Group), with almost nothing about buying shares in other American railroads. Almost everyone missed the key difference; the nature of the market for American railroads is very different to that in Britain. Me, I topped up Union Pacific and Canadian Pacific.

American railroads' business is long-distance freight where the company owns the railroad, in Britain we have short-distance passenger rail where the companies rent access to the railway.

P.S. re. McDonalds. American companies have to value property at cost plus improvements minus accumulated depreciation (because of the GAAP accounting standard). Market value has nothing to do with it, unless you've just bought it in which case accounting value = what you paid. If there were real concerns about the company because of its accounting NAV, McDonalds' bonds would be trading at junk bond levels. Instead the agencies give McDonalds a "BBB" credit rating (an "investment grade" rating).

Cramer talks a bit about McDonalds at about 8 minutes into the second video in the link above.

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Re: US shares

#264164

Postby gryffron » November 14th, 2019, 10:20 am

widowandorphan3 wrote:McDonalds... Mr Market correctly deduced that while consumers might stop eating at fancy places, they would have to continue eating out sometimes (eg. workers on the move etc.), and MCD was the cheapest place in town.

Plus they are a childrens' treat. In a recession, spending on the kids usually holds up much better than adult "luxuries"

Gryff

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Re: US shares

#264178

Postby MaraMan » November 14th, 2019, 11:02 am

A bit left field I guess but I bought some Store Capital (STOR), a US REIT, in January 2018. Which was just after the news landed that Berkshire Hathaway had bought a 10% share in late 2017. Since then the share price has increased by over 70% and it still has a yield of 3.5%. I won't say too much more about the company as the fact sheet says it all, but I took a good look at it at the time as I wanted some non-UK REIT type exposure. I am tempted to top slice but for the moment have decided to let it run.
http://ir.storecapital.com/Cache/100125 ... id=4553160
MM

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Re: US shares

#264327

Postby TheMotorcycleBoy » November 14th, 2019, 5:23 pm

SalvorHardin wrote:P.S. re. McDonalds. American companies have to value property at cost plus improvements minus accumulated depreciation (because of the GAAP accounting standard). Market value has nothing to do with it, unless you've just bought it in which case accounting value = what you paid. If there were real concerns about the company because of its accounting NAV, McDonalds' bonds would be trading at junk bond levels. Instead the agencies give McDonalds a "BBB" credit rating (an "investment grade" rating).

Thanks again Salvor,

These are good points, both of them, but the stuff about the property values especially so. Well anyway, I must fess up......after reading your words and considering their brand appeal, etc. etc. I decided to place a limit order. I am now the owner of 7 MacDonalds shares bought for $193.80. Fingers crossed!

Cramer talks a bit about McDonalds at about 8 minutes into the second video in the link above.

Yes, that Cramer guy's a hoot. Never know quite how to take him. I didn't buy on his endorsement, but it was interesting to hear what he had to say.

Do you see this? A bit of a comparision of Maccys, Nike and UnderArmour, how they are all looking with the challenges of a new CEO:
https://www.forbes.com/sites/georgebrad ... d292e1413f

Finally another US firm I may research: Intel. I know they have competition in various parts of the processor space, but I've got a feeling that in decades to come part of the developing world are going to perhaps start to own computing devices with "Intel inside" written on them.

Matt

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Re: US shares

#265050

Postby ADrunkenMarcus » November 18th, 2019, 7:57 am

Dod101 wrote:If you could buy just one US share what would it be?


I suppose the answer is MasterCard, since it's the only US share I hold. I'm looking to buy more when I have the cash, as I wanted to buy more at the time (April 2019). It has phenomenal returns on capital employed; expanding operating margins; and great cash returns on invested capital. It's forecast to generate strong free cash flow growth through 2021, too.

Best wishes

Mark.

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Re: US shares

#265083

Postby richfool » November 18th, 2019, 9:42 am

Dod101 wrote:If you could buy just one US share what would it be?

Either NAIT or BRNA, which would give exposure to a wide range of US shares, managed for me by the Investment trust manager. ;)

NAIT - North American Income Trust - 2.8% yield
BRNA - Blackrock North American Income Trust - 4.1% yield

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Re: US shares

#265111

Postby Lootman » November 18th, 2019, 11:13 am

richfool wrote:
Dod101 wrote:If you could buy just one US share what would it be?

Either NAIT or BRNA, which would give exposure to a wide range of US shares, managed for me by the Investment trust manager. ;)

NAIT - North American Income Trust - 2.8% yield
BRNA - Blackrock North American Income Trust - 4.1% yield

I think the question was about US-listed shares and not UK-listed investment trusts that invest in the US.

That said, JP Morgan American Trust has a good long-term record, and the Vanguard ETF symbol VUSA is a very cheap way to get US exposure.

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Re: US shares

#265114

Postby TheMotorcycleBoy » November 18th, 2019, 11:18 am

ADrunkenMarcus wrote:
Dod101 wrote:If you could buy just one US share what would it be?


I suppose the answer is MasterCard, since it's the only US share I hold. I'm looking to buy more when I have the cash, as I wanted to buy more at the time (April 2019). It has phenomenal returns on capital employed; expanding operating margins; and great cash returns on invested capital. It's forecast to generate strong free cash flow growth through 2021, too.

Best wishes

Mark.

Hi Mark,

Sorry to sound like I'm obsessing on this one - after our earlier brief DOM chat. But to do recall what p/e you bought at? Or do you typically trust Mr. Market to price appropriately?

thanks Matt

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Re: US shares

#265142

Postby ADrunkenMarcus » November 18th, 2019, 12:52 pm

TheMotorcycleBoy wrote:. But to do recall what p/e you bought at? Or do you typically trust Mr. Market to price appropriately?


I saw forecasts out to 2021 for free cash flow and worked out the free cash flow yield (on a forward-looking to 2021 basis) was 3.9%. I think it was then 2.7% or so on a current basis. Given the huge growth this company is achieving and 17% per annum EPS growth forecast out to 2022 and beyond, I thought that was not bad. It is not cheap but it's a quality company and I intend to hold for decades, if I can.

From memory, Sharepad data had ROCE at 63%; operating margin 55% headed to 60% forecast by 2021; and CROIC at mid 40s%. You could halve or even reduce to a third all these numbers and it would still be a great company, yet Visa's operating margin is closer to 70% so why can't MasterCard's grow further?

Best wishes

Mark.

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Re: US shares

#265218

Postby TheMotorcycleBoy » November 18th, 2019, 7:24 pm

ADrunkenMarcus wrote:
TheMotorcycleBoy wrote:. But to do recall what p/e you bought at? Or do you typically trust Mr. Market to price appropriately?


I saw forecasts out to 2021 for free cash flow and worked out the free cash flow yield (on a forward-looking to 2021 basis) was 3.9%. I think it was then 2.7% or so on a current basis. Given the huge growth this company is achieving and 17% per annum EPS growth forecast out to 2022 and beyond, I thought that was not bad. It is not cheap but it's a quality company and I intend to hold for decades, if I can.

From memory, Sharepad data had ROCE at 63%; operating margin 55% headed to 60% forecast by 2021; and CROIC at mid 40s%. You could halve or even reduce to a third all these numbers and it would still be a great company, yet Visa's operating margin is closer to 70% so why can't MasterCard's grow further?

Best wishes

Mark.

Thanks Mark,

Yes, they sound like very good numbers. I'm finding it very tempting to keep buying the US stocks now that I've got my toes wet. Recently bought Microsoft, Disney and MaccyDs. I'm thinking I should wait until after our GE for my next purchase, as I imagine a Tory win will send the £/$ rate up some more.

Matt

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Re: US shares

#265225

Postby ADrunkenMarcus » November 18th, 2019, 7:49 pm

TheMotorcycleBoy wrote:Yes, they sound like very good numbers. I'm finding it very tempting to keep buying the US stocks now that I've got my toes wet. Recently bought Microsoft, Disney and MaccyDs. I'm thinking I should wait until after our GE for my next purchase, as I imagine a Tory win will send the £/$ rate up some more.


All good long term holds IMHO! If the £ does rally by the time I have cash to spend on more MasterCard, then it will take away some of the concerns about its valuation as my £ will go much further against the $. As it happens, the £/Euro and £/$ rate is about the same as it was in April 2017 and April 2019, respectively, when I bought Finnish listed Kone (KNEBV) and US listed Mastercard (MA) respectively.

Best wishes

Mark.

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Re: US shares

#265228

Postby monabri » November 18th, 2019, 8:04 pm

Unless DT gets impeached first ...that too might provide a good opportunity.


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