SWOT analysis #investments
When we are looking to invest, we can do a SWOT analysis on the company and look at Strengths, weaknesses, opportunities and threats. One threat that always seems to be there and is hard to predict is political uncertainty.
The past few weeks, the crisis in Greece has depressed stock markets. Following the referendum on Sunday, my investments got trashed yet again. There were other factors. Monitise put out bad news about when Visa Europe decided to cut it’s stake and change the agreement to use Monitise expertise. Balfour Beatty put out a profits warning. My returns got virtually wiped out, at least looking at the value. The threats seem to have subsided now and yesterday and today, prices began to recover.
Premier Foods had some good news on a new line that will be producing a new product with good use of technology while creating new jobs. The directors bought at an average of about 81p at last year’s rights issue and so that can be considered a strength, because it shows commitment. My SWOT analysis looks good. They have new products and a committed board. The weakness could be debt, but that is overshadowed by opportunities to expand their range. The treats are mostly political and outside forces.
Solo Oil and Verona Pharma both dropped on sentiment. The market was trying to reduce risk and so dropping AIM companies. Both those are an opportunity to buy now. The pipeline in Tanzania will be tested at the end of this month which will benefit Solo Oil.
What now? I’m looking for opportunities. The market is depressed and so there are opportunities to buy. I don’t want more in the AIM market just yet. I’m looking at the FTSE 250 and maybe getting back into banking. Both Lloyds and Barclays look slightly under-priced. If Lloyds drops below 80p I’ll probably get back in.
The market seems unpredictable now and no one can predict the political outcome of the crisis in Greece. They need to be seen as less of a risk, so they can borrow at lower interest rates.
That’s it for this week. I shall be using SWOT analysis to look at the strengths and weaknesses of companies this week and hoping to find opportunities to trade while trying to assess the political threats.
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