Sren Kierkegaard once said that to dare is to lose ones footing momentarily, but to notdare is to lose oneself.
With that in mind, considering that theFTSE 100is badly hurt, and that the rainy days might be here to stay in which case, should you buyARM Holdings (LSE: ARM) and Antofagasta (LSE: ANTO) instead of Royal Mail (LSE: RMG)?
Record sales at Apple are great news for ARM, whose current stock price of 919p reflects broader market volatility than any fundamental issue with the business. In fact, you could buy ARM stock now and payabout 36x and 30x its forward earnings for 2015 and 2106, respectively, but trading metrics drop by 30% once they are based on projections for its adjusted operating cash flow.
That is not a lot, really, while the net present value of future cash flows to equity yields mypersonal price target is 1,150p.
Between 2015 and 2017, ARM is expected to add about 200m of revenue each year trailing sales stand at 795m. On top of that, roughly 100m of operating income will be generated, which should yield a compound annual growth rate of between 25% and 28% for earnings per share and dividends per share.
Theres no debt on its books.
If thats not enough, you must either forget about equity investing or you must be looking for a riskier investment if the latter is the case, then Antofagasta could be your top pick.
Mr Copper is giving sleepless nights toAntofagasta shareholders, but they shouldlive in the knowledge that the value of their holdings, which is currently very close to their 52-week low of 476p, is destined to be more resilient than that of all other major miners given that Antos capital structure how much debt/equity the miner holds on its books is much more balanced than that of its rivals.
That is not to say that their lower dividend yield is much safer, however.
Still, you may well be prepared to stay put if you are invested or you could be brave and buy its shares, which are currently priced at forward earnings and adjusted operating cash flow multiples of 15x and 5.5x, respectively. Either way,to notdare is to lose oneself remember that?
I have a problem with Royal Mails strategy of late I did not digest its venture with Amazon and I also have anissue with the limited room of manoeuvre that the mail and express sector offers. It doesnt look good out there, as recently proved by the performance ofUK Mail.
And, based on most metrics, you cant evensay that RMG looks dirt cheap at its current price of 450p!
So, Id probably end up being bored to death checking out its stock price over the next decade, just trying to figure out how get out of the investment at anywhere between 450p and 550p.Thats a possible scenario over the medium to long term, in my view, unless some brave buyer placed a bid and the UK governments was willing to accept it.
Of course, savvy investors in their 60smay be pleased with the yield that they may get over time from Royal Mail — but then, what if I told you that there are smarter ways to invest your savings?
Frankly, a few great opportunities should really catch the attention of investor who dare to look forlong-term valuefor their retirement.
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