Founded: 1946, ASX code: BLD, homepage: www.boral.com.au

Overview:
Boral Limited is the biggest supplier of building and construction materials in Australia. It has also long time established market presence in both US and Asia. The company generates majority its sales through four groups: Construction materials Australia (responsible for about 50% of all sales), Building products Australia (about 25%), USA division (about 15%) and ASIA division (about 4%).

Analysis of latest annual report (June 2006):

• Market Cap: Depending on the daily stock price the market cap of this company is about $5,500mil in about 589mil of outstanding shares.
• Shareholders Equity: $2,753mil making the stock’s book value approx. $4.67 per share (10.5% growth on year ending June 2005). From that about $537.6mil. ($0.91 per share) is available working capital.
• Earnings per share: $0.61 making the average EPS growth in last 3 years about 8.5%
• Return on Equity: 13.1%, averaging around 14.7% in last 3 years
• Balance Sheet: Working capital of $537.6mil versus total debt of $1,654.4mil

Sharemarket’s view:
Average BLD’s Price to Earnings ratio of 10 suggests the share price around $6.1 ($0.61 EPS x 10 P/E).

GROWTH STOCK:

• Conservative forecast of average EPS growth in next 10 years: 12%
• Share price in 10 years time: about $19 (EPS in year 10 based on forecasted yearly EPS growth times average P/E)
• Total shareholders return in 10 years times: $25 (share price of $19 plus $6 of all the dividends if current payout ratio of 50% persists)
• Rate of Return in next 10 years based on the January 2007 price of $8.20 per share: 11.9%pa

PROS AND CONS:
+++ Long established business, major player in its industry
+++ Good balance sheet for company of its size
+++ Good Returns on Equity
— Issuing new shares and hence decreasing the value of existing ones
— Exposure to a volatile building and materials market

Further information about Australian Stock Exchange www.asx.com.au

Only recently I discovered that Google has been trying for some time provide its users with free real time stock market quotes. While real time data is easily obtainable by anyone willing to pay, there has not been any cost free alternative. Most of the free real time quotes available to date were either delayed (available from number of providers such as Yahoo Finance, stock exchanges directly or most of the brokerage houses) or limited to one query and stock at one time.

However if Google has its say, this may change in very near future, as per their report from 11 January 2007 published on their official blog:

Today, the NYSE has moved the issue a great step forward with a proposal to the SEC which if approved, would allow you to see real-time, last-sale prices across all Google properties including Google Finance, Personalized Google, Mobile, and of course, Google.com. It won’t matter if you’re on Wall Street or Main Street — you’ll have free, easy and fast access to real-time prices from NYSE on Google.

Definitely a very good news for those of you who employ short term investing strategies in your investing repertoire. In the near future you should be able to ditch your paid real time data provider and decrease your trading overheads.

Founded: 1868, ASX code: GOW, homepage: www.gowings.com.au

Overview:
Gowings Brothers Limited started as a prime family owned retail business and over the years evolved into a quality value focused wealth management fund. As of July 2006 the total company net assets were 170 million, majority of which (66%) was allocated to investment portfolio of listed and private equities. The rest the assets were kept in cash (32%) and property (2%).

Analysis of latest annual report (July 2006):

• Market Cap: Depending on the daily stock price the market cap of this company is about $145mil in about 43mil of outstanding shares.
• Shareholders Equity: $158mil making the stock’s book value approx. $3.67 per share (63.7% growth on year ending July 2005). From that about $57.8mil. ($1.34 per share) is available http://www.soundofgold.com/2007/01/11/working-capital/.
• Earnings per share: $0.58 making the average EPS growth in last 3 years about 91%
• Return on Equity: 15.8%, averaging around 9.6% in last 3 years
• Balance Sheet: Working capital of $57.8mil versus total debt of $12.9mil

Sharemarket’s view:
Average GOW Price to Earnings ratio of 16 suggests the share price around $9.3 ($0.58 EPS x 16 P/E).

VALUE STOCK:
Return: End of January 2007 at share price of $3.5 this company is trading at about 5% discount to its 2006 book value and about 60% premium to its current working capital.

PROS AND CONS:
+++ Long established business with high levels of management ownership (e.g. the first page of Gowing’s annual report reads: “It’s our money too�? a statement from MD J.E. Gowing)
+++ Very strong balance sheet
+++ Good use of generated capital (i.e. paying low dividends and using funds to generate more profits in promising markets; repurchasing own stock when priced favourably)
— Low Returns on Equity tied up closely to the overall sharemarket performance

Further information about Australian Stock Exchange www.asx.com.au.