Motley Fool posted me the below (from the email they keep sending me to sign up) ....think its ok to post (sorry Hotcopper if not ok).
Anyway guess the stock.
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This is the year-to-date share price performance of our latest income recommendation I won’t disclose the name, or price scale, out of respect to paying members).
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As you can see, it’s not a pretty picture. In fact, shares have lost about 20%since the start of the year.Most people tend to extrapolate recent trends forward and as such, in this case, would assume that this is a pretty bad investment. But let’s zoom out and look at a longer time frame. Importantly, let’s ignore price (the dog) and instead look at earnings (the man).(specifically, we’ll look at the trailing 12 months of earnings on a quarterly basis)
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Now, does this look like a poor company to you? By the way, this period covers the GFC, a period over which this business saw no material drop to its earnings. Little wonder the business was able to pay a regular and rising stream of dividends over the period.Given we know what earnings have done, it’s not hard to guess that the share price performance has also been pretty attractive -- albeit far more erratic.
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Given that I expect earnings to continue their upward march in the coming year (as do most analysts), do you think I’m worried by the recent fall in share price?Indeed, the very fact that shares have fallen has given a great opportunity to buy -- which is why we only recently recommended it!Of course, the price could keep going lower in the short term -- as I said, you justcan’t predict these things -- but i’m not focusing on the price. I’m focusing on earnings, and that allows for a great deal of confidence!Foolish TakeawayDo I know where the price of my shares are headed over the coming months? No, I have absolutely no idea!
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TGA Price at posting:
$2.55 Sentiment: Buy Disclosure: Held
