Why I have bought Dixons and AstraZenica

PUBLISHED: 27 Feb 2012 @ 21:18 | Comments (1) | More info about Clem Chambers

This is an argument most people don’t like. They think GSK is nothing like AZN, or Daily Mail is nothing like Trinity Mirror.

I have bought Dixons and AstraZenica. The latter is a simple decision. It’s paying a fat dividend and has a low P/E. More than that; it is way cheaper than GSK.

For me its like cheddar and Red Leicester; they are cheese for heavens sake! Pound for pound there should be little difference. Having said that I don’t know if these chesses are priced differently in Tescos but you get my point.

From a balance sheet prospective GSK and AZN look very similar, however Astrazenica is at least half price per pound of company. You could even suggest its 25%, but let’s not get greedy.

We like that 6% divi too. Of course, if I was being rigorous I’d short GSK and go market neutral, but the market is going up so to hell with it.

Why Dixons, isn’t all their business going to the internet? Yes, but too cheap is still too cheap. You can buy this company for 3 weeks sales…. he down trend is broken for now – the market will rally, recovery is on the way, ahem… it is not a terrible company. This is the high risk end, neatly balanced by “dull” Astrazenica. Retail miasma will reverse at some point and then the right stores will rocket.

I’m starting to think we will see $5000 an ounce gold this decade and I’m starting to feel I need to short cash. That’s a tricky trade.

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