El1teTrader is running a 2015 Share Competition, so I thought it would be fun to publicise it and make my own entry.
For the Nicky Fraser Share Competition last year I chose LMI (Lonmin). What an atrocious choice that turned out to be!
Since putting together a thesis that looks good on paper and actually works out in practise doesn’t seem to be strong suit, I’ve decided to abandon all that high-powered “analysis” and gone down the route of: What would JarJar Binks do?
My choice is: RBS (Royal Bank of Scotland). Why? Well, no fancy logic here. The share has excellent momentum on a 6m basis, and its on a PBV of 0.45. Its ROE is appalling, at -10%. So the theory here is that it’s a recovery share. ROE can only get better (in theory), and the shares are cheap. I’m using momentum is acting as a confirmation signal of its ongoing recovery.