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Industry: Healthcare (ASX: BKL)

Principal Activity: Production and distribution of vitamins and supplements throughout Australiasia.

We have seen the price of BKL fall from highs of around $22 to recent lows of $12.80. The current trading range is between $12.80-$17 and, at the lower end of this range, there is evident value. Blackmores has had great success in the previous decade and has effectively established a well-recognized brand name that is associated with quality. Management has been performing well with ROE (return on equity) consistently above 30% in the past 5 years. The stock has historically traded at PE's of 18-20 however now the figure is in the 10-11 range. In comparison to other stocks in the Healthcare industry such as Ramsay Healthcare and Sonic Healthcare, BKL has experienced a large price drop. We believe this is mainly due to it's greater exposure to the retail climate with products mostly sold in supermarkets and pharmacies.

Being a premium product with a premium price tag, it is understandable that the market may view this as a situation where consumers will swap to the cheaper but lower quality products. However, the strength of Blackmores brand name recognition in this niche cannot be questioned and thus, once the cycle has turned, it will continue on it's path of profitability. Moreover, management has consistently proven it's ability to expand the business, improve shareholder value, grow profits and increase shareholder returns. The company is still not a large cap stock and hence has plenty of room for further growth and expansion.

We are confident that when things turn for the better, Blackmores will be a winner. The astute buyer should purchase now at prices that represent good value and hold for the medium to long term.

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Value investing

 For over 50 years, value investing has been one of the most consistent and profitable ways to invest money. Imagine if you were given the opportunity to buy a $50 note for $20. Would you agree to this proposition? Anyone with a sound mind could not pass up such an opportunity to so simply increase their wealth. 

Now, what if you were walking along the street and someone offered you one hundred dollars for that fifty dollar note. You may think, 'are you kidding me?' But say he is not and he gives you one hundred dollars for your fifty. You have just practised a completely dumbfounding way of increasing your wealth, even though this probably may never happen in such a context as explained. However! It can readily happen every day on the stock market, it is known as value investing, put to practise but the worlds wealthiest indivdual, Warren Buffet and his mentor, Benjamin Graham.

The methods of value investing are quite akin to this scenario. Put simply, it is the art of purchsing dollars' for fifty cents'. Almost everyday there arises an opportunity to purchase a company that it selling inherently cheaper than what it is really worth. Buffet calls the true worth of a company its intrinsic value.  The aim of value investing to determine a companys' intrinsic value and then wait for a time when the stock is selling at or prefferably below this value. 

Buffet built on Benjamin Graham methology for calculating a business' true worth. Whilst Grahams' method was purely quantitative and based on the balance sheet and mathematics of the stock, Warren Buffet bought new ideas to the art of value investing by analysing qualitative facets of a company such as management, intellectual property, brand names and product quality.

Creating blogs that generate revenue

One very simple way to start earning money using Google Adsense is to start a topical blog. To start a blog you can either use a free blogging tool such as Googles ‘Blogger’ or develop a template, purchase a domain and hosting space and update using html editors like Dreamweaver and frontpage.  The latter gives you more control over things like design, content and links. Google will often ban your Blogger account if it feels you have too many outbound links going from your blog to another website. It views this as spamming. Whereas, if you develop your own template and have your own domain, you can make sizeable sums of revenue from selling links on your blog. So, in order to develop a blog capable of generating adsense revenue you need to firstly follow these steps:

• Come up with a topic for your blog (i.e. the NBA, the global economic crisis etc.)
• Purchase a domain name that is relevant to your topic. You may do this either through a domain registrar such as GoDaddy, or if your perfect domain is already registered by someone else, you may be able to find it for sale in domain marketplaces like Sitepoint or Dnscoop. Buying an already registered domain has the advantage of the possibility that the domain already has a Google Page Rank. Also, it may be well ranked in search engines for terms that relate to your topic. Having a high Google PR will help you sell links on your blog.
• Purchase a hosting package from a hosting provider
• Develop or buy an attractive template for your blog content to fill

A Simple guide for seo

Heres a few basic ideas that should improve your sites PageRank® and traffic.

Social Bookmarking
2. Blog Commenting
3. Creating Web 2.0 pages for your site.
4. Article Submission
5. Directory Submission
6.Forum Posting
7. One Way Linking
8. If you have any product on your website than go for Craig List.

 A good method:

1. Get a back link from a website that is  PageRank 7 +
2. Get a back link from two PageRank 5 websites
3. Submit your website to forums like Digital point.
4. Submit to social book marking websites
5. Submit the website in web directories 
6. Submit to Yahoo Answers.

Sound investing in stocks

This rarticle is designed to aid the novice or intermediate stock market investor who is driven to achieve a significant long term gain through both capital gains and dividend payments. This Guide exams several methods for selecting stocks which represent good long term prospects selling at a price deemed to be below their intrinsic value. To achieve this, we must look at the investment methods of Benjamin Graham and Warren Buffet who look beyond the fluctuating stock prices, which really are just a bunch of numbers, and analyze the business that they are in effect buying a part of.

Using a companies figures from the past 5 years, we can determine the true value of the company, determine a price at which it can be bought to deliver returns of 15%, 25% or 35% per annum for 5 years, determine what you are actualy purchasing when you buy the stock and do an overall evalutation on the suitablity of the company as a low risk, long term investment for both capital gains investors and income investors.

 

Eventually, a good business delivering profit and earnings growth year after year in a favourable market will have its true value realized and most likely exceed it on the stock exchange. It must be noted that a stock trading at a low PE in comparison to companies similar to it usually meens that the company is unfavourable with investors and usually will take a great deal of time to adjust to a higher PE ratio, low PE companies do not always represent good value however they may if the steps in this report are followed and the company is determined to be a great business. A PE of between 11 and 20 is favourable, however not paramount. 

By multiplying the predicted earnings per share for each year by the average PE Ratio over the past 6 years, we can determine the price which the stock can assumed to be worth according to the market.

Example

EPS of 27.99c x Avg PE of 16.6 = market price of $4.64

What price can we purchase this stock at to gain an annual return of 15% p.a for the next 6 years. Well, we simply discount the price it is assumed to be in 2012 by 15% for 6 years to arrive at a current price.

We do this by multiply the price, $6.79 by 0.85, 6 times negatively compounded. So in 2011 the price discounted by 15% is 5.77 whilst our calculated value (above) is $6.29. Meaning that the stock is safe to purchase at a price of 5.77 or below, providing that the PE Ratio has fallen with the stock price.

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what is ticip.com?

TiCiP.com is an online guide for young entrepreneurs regarding all things from shares to Google Adsense®. All stock analysis is based on a number of factors both quantitative and qualitative in nature. 

It must be noted that all stock reccomendations are of a long term nature i.e if bought and held for a period of 3 years or more, ticip.com believes they will present the shareholder with good returns. However, we in no way take any responsibility for any losses that may be incurred by the purchase of stocks that we reccomend.