SPEAKER: Martin Roth, author, Top Stocks 2015 LOCATION: Melbourne DATE: November 2014

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Martin Roth: Top Stocks 2015

Agenda

1. Ins and outs in Top Stocks 2015 2. Key trends on this year’s list 3. Stocks to watch

Criteria to make the list

• Must be in All Ordinaries Index • Listed, profitable and paying a

dividend for at least five years • Acceptable debt and profit

performance • 2015 list has 96 stocks

Newcomers on 2015 list

• 16 new stocks made the list • Often, small stocks not yet on the radar of

professional investors • Standouts include:

• G8 Education (childcare) • My Net Fone (telecommunications)

Stocks that dropped off list

• 18 got knocked out • 6 from mining services sector • Unusual to have so many companies from

one sector drop off • Shows how tough it is mining services

Rise of tech stocks

• Number of tech stocks on list rising steadily each year

• Nine of 96 stocks from IT sector • For example, Infomedia, Hansen

Technologies. • IT stocks can offer growth and dividends

More consolidators on list

• Companies that usually acquire small competitors to grow

• Economies of scale and synergies created – profitability improves

• Examples include Austbrokers Holdings (insurance), 1300 Smiles (dentistry) and Greencross (vet)

Benefitting from lower $A

• Australian dollar could continue to weaken in next few years

• More companies doing well overseas • Examples include Domino’s Pizza

Enterprises, Slater & Gordon, Ramsay Health Care

More healthcare stocks on list

• Has become a very dynamic sector • CSL, Cochlear, Sonic Healthcare, Ramsay

Health Care have been strong performers • Healthcare stocks among best performers in

Top Stocks 2015

Retail Food Group (chart source: ASX)

Retail Food Group

• Owns a range of food franchise outlets (Brumby’s Bakery, Donut King, Michel’s Patisserie)

• Acquired two gourmet pizza chains that have high profit margins

• Getting much larger in coffee • Acquired Gloria Jean’s Coffees and Di Bella

Coffee

The Reject Shop (chart source: ASX)

The Reject Shop • Had a poor Christmas in 2013 • Costs were up, partly due to aggressive store

openings • Now, a potential recovery stock • Not opening as many stores • Much depends on this year’s Christmas

trading performance

Servcorp (chart source: ASX)

Servcorp

• Rents serviced offices, mostly to small and medium-size enterprises

• Expanding worldwide • Growing steadily and has good long-term

prospects • Exposed to business conditions, but

diversification mitigates risk

Buying Top Stocks 2015 • Available from Educated Investor Financial

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