I have delayed picking them for a long time because I did not like the market. Here they are now.
Better late than never.
However, I‘ve avoided the big slump – or at least the major part of it.
For four of the five years I‘ve been doing it, I‘ve beaten the market.
I‘ve picked five from the Irish market which has fallen by 76% at its worst and five from the UK market which has fallen about 42% at its worst.
I think the Irish market has better value.
Allied Irish Bank – â‚¬3.17
This is on the Irish Market (ISEQ).
The Irish market has fallen by more than others at 76% compared to Wall Street and the FTSE-100 which have fallen around 44% and 42% and so represents better value.
AIB have fallen from about â‚¬23 in the last 18 months or so.
They are Ireland‘s biggest bank.
None of Ireland‘s banks have been involved in sub-prime mortgages.
The property market has fallen by 20% here after a huge property boom.
However AIB has a stake in an American bank M&T, where Warren Buffet is the 2nd biggest shareholder and a stake in a Polish bank.
The Stock Market value of these two stakes is worth more than AIB is worth in total.
Irish Life & Permanent – â‚¬1.67
These have been really hit.
They were over â‚¬22 around 18 months ago.
They are Ireland‘s biggest Insurance and Mortgage company.
They have been hit by the credit crunch and Ireland‘s crumbling property boom.
However, as Warren Buffet said you buy the top company in a sector.
CPL Resources – â‚¬1.41
This is Ireland‘s biggest recruitment company (predominantly IT) and they are also quoted on the UK market.
They are cheaper on the Irish market though with a smaller spread.
I‘ve had these in my portfolio every single year and they have turned out as the one with the biggest rise in most of those years.
They are a well run company but have fallen from over â‚¬8 to their current price.
Once this crisis is over I‘m sure they‘ll return to the old levels.
Smurfit Kappa – â‚¬2
They are Europe‘s leading company in their part of the packaging area and have fallen from nearly â‚¬21 to their current price.
They have â‚¬3bn worth of debts but none of these are due till 2011.
Ryanair – â‚¬3.00
Ryanair are a well run company and are expected to benefit from the downturn as other cheap airlines go bust and have said as much.
They are going to cut prices by 20% and are expecting to increase market share throughout the downturn.
Harvey Nash – 28.75p
I thought they would go under at the last downturn but they managed to get a rights issue through.
They have now become a good stable company with a good balance sheet. They are mainly an IT agency.
Agencies are highly cyclical and Harvey Nash have come down from 92p.
However, when the market turns they are sure to go back up again.
Even if they just go back to their previous levels you would have more than trebled your money.
Northern Recruitment Group – 37.50p
They are a mainly IT recruitment company and have fallen by about 80%.
Spring Group – 30.25p
Spring Group have a very good balance sheet with good cash and net assets.
They won‘t be going bust in any downturn.
SThree group – 153.75p
This is the UK‘s biggest predominantly IT recruitment company.
They have come down from about 510p.
SDL – 194p
They have come down from around 430p.
As I said in the beginning the Irish ones are, I would say, better value than the British ones and this is a once in a lifetime chance to buy.
If you look at how much Ireland‘s biggest recruitment company has fallen compared to the UK ones like Spring, Harvey Nash and SThree you can see that they are even better value.
I am now 80% back in the market in the last two weeks and the ones I have bought are the first four – all Irish ones.