Five shares I bought during this euro slump
The recent market troubles would try the patience of even the most saintly of investors. It has been an awful few months.
I have decided not to try and time the highs and lows of the markets. But instead I have been thinking of the long term, buying into companies which look cheap and which I think have got good long-term prospects. Over the years, and once the current volatility has passed, I have confidence that this value will shine through.
I have used the current volatility to rejig some of my holdings, buying into new companies and also adding to my holding in others. Here I summarise my purchases.
These days Vodafone is a classic high-yielding defensive share. Whatever happens to the world economy, people will still be using their mobile phones.
And the world's biggest mobile operator is looking a steal at the moment. At its current price of 168p, it will yield 5.7% for the year ahead (excluding the 4p special dividend, which those of you clever enough to buy before 16 November will receive) and is on a trailing P/E ratio of 12.
Vodafone is generating a mountain of cash, plus the company is growing, with group revenue for the first half of the year up 3.5%. It's well placed to benefit from the smartphone boom and the likely explosion in data services, plus its emerging market businesses are continuing to perform well. These two areas will both have key roles to play in Vodafone's growth strategy.
I have written before about British Sky Broadcasting ; it is now the biggest company in UK television, and it is an organisation that keeps on growing. If you are looking for a business which produces a decent dividend but is also a growth share, you could do a lot worse than BSkyB.
Although I have admired the company for some time, after Rupert Murdoch made his bid for the business it looked a tad pricey. But the shares took a tumble in the aftermath of the phone hacking scandal, as fear enveloped all the businesses the Murdochs were involved in, and I took the opportunity to buy in.
It has been forecast that BSkyB will double its earnings between 2010 and 2015. By the end of this period revenues would be greater than the combined revenues of the BBC, ITV, Channel 4 and Channel 5. At its current price of 713p, the company is on a trailing P/E ratio of 16 and a dividend yield of 3.6%, so you are getting growth at a pretty reasonable price.
I don't think I have much to say about Aviva that hasn't already been said, so I will keep this section brief.
In my view Aviva has a strong business and has been oversold as financial shares -- both good and bad -- have fallen as the eurozone crisis plays out, and I have taken the opportunity to top up my holding.
After a year of shocks, I feel BP is turning the corner and moving on from the Macondo oil spill.
It is making big investments in the North Sea and Indonesia, and US regulators have even approved drilling in the Gulf of Mexico. Plus, despite all the corruption, Russian collaboration TNK-BP continues to make a substantial contribution to BP's revenue and profits.
Long term, I see the British oil major continuing to rebuild and to fill that hole in its oil reserves. And with its shares, at the current price of 435p, on a trailing P/E ratio of just 5.5, I think it is a great time to buy into this recovery story.
Domino's Pizza Poland
Much of my portfolio is made up of bargain blue chips, such as those I have described above. But I like to leave some space in my investments for the more speculative punt. There is a chance you might exit with a painful loss, but you could also end up with a multi-bagger.
Such a share is Domino's Pizza Poland , which fellow Fool Maynard Paton highlighted in July. While I am not far off being in profit or level with the four other shares, I am well down on this share.
That's the risk you have to take with small company growth stocks such as this. They are often volatile and can be difficult to analyse and value.
My big hope is that Domino's Pizza Poland will exhibit some of the growth of Domino's Pizza UK & Ireland , which rocketed in value in the 2000s. But I will have to be patient and ride out the ups and downs. Let's see where the share price is at in five years time...