good buying opportunity?

Does anyone have anthing to add about this stock?

Worth buying?


Time to take profits
By Alex Tilbury
11-02-2005
From: The Courier-Mail
VETERAN stock picker Anton Tagliaferro reckons it's time to tread cautiously and take profits, despite the buoyant mood of the market which is hitting record highs every other day.

Mr Tagliaferro, 45, the founder of successful Sydney-based boutique fund Investors Mutual which boasts $5 billion in funds under management, considers himself a conservative, value-based investor.
Going foward, IML will be buying more of Telstra, National Australia Bank and Amcor while selling Brambles, CSL, Lion Nathan, Computershare and the DCA Group.

The stock gurus at IML also like ConnectEast with a $1 share price. It's a company building a new freeway in Melbourne paying a guaranteed 6.5 per cent yield distribution while the toll road is being built, to be opened in 2008.

Auckland-based casino Sky City, international tugboat operator Adsteam Marine and Australia's flagship carrier Qantas are also stocks IML wants to own more of.

"In the growth stocks, we are starting to see the return of the high price to earnings ratios," Mr Tagliaferro says. "Look at CSL. Two years ago you could not give it away and now it's back over 40 times earnings. Brambles is 20 times (forecast P/E for 2004-05). We are holding cash and we are still very wary of cyclical stocks.

"The stocks we see value in are not very exciting. The three we've picked had a pretty poor year last year. Their P/Es are pretty reasonable as expectations are low but we've identified things that we think will help them perform better in the next 18 months."

Mr Tagliaferro believes Telstra's capital management program – its share buyback and special dividend, plus a new managing director by 2005 and the likely full privatisation mean there is a good prospect it will be run better.

The IML team believes NAB's sale of its Irish Bank was a masterstroke, releasing $1.8 billion in capital.