Defensive Buying - Week Ending 20 January 2017

Tuesday, 24th January 2017 11:08 - by Moosh

The number of shares in a defensive buy is dictated primarily by the asking price and the buy/sell commission that you pay – for simplification I will assume that the buy and sell commissions are the same value and will provide a maximum number of shares to buy for a single commission of £5.25, £7.50, £10.00, and £12.00. 

If your commission is not shown here, then round up to the nearest commission level and use that as a potential maximum number of shares to buy, assuming you are happy with the fundamentals at the latest time and price given. I will be adding more companies to the Defensive Buy list when they are ready to appear on it and NOT before!

This week’s first example of a defensive buy is in Asiamet Resources (ARS) – the company had a recent placing with positive news flow while the copper price has increased over the last few months.

Bought: 16788 shares ARS (in 3 tranches)

Total cost of purchase: £439.59

Return after selling cost: £490.42

Return on investment: 11.56%

Incubation time: 46 days

My second example of a defensive buy is in Orosur Mining (OMI) – I decided to try this out since gold price has risen consistently over the last few weeks and the company also happened to provide some bullish company developments which helped the price move up a bit more.

Bought: 1040 shares OMI (in 3 tranches)

Total cost of purchase: £165.06

Return after selling cost: £169.99

Return on investment: 2.98%

Incubation time: 51 days

Total profit from defensive buys (rounded down to nearest pound)

= £8 (GSK) + £7 (BT.A) + £50 (ARS) + £4 (OMI) = £69

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.