Monday, 30th January 2017 11:57 - 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 example of a defensive buy is Asiamet Resources (ARS):
Bought: 24737 shares ARS (in 3 tranches)
Total cost of purchase: £643.36
Return after selling cost: £725.21
Return on investment: 12.7%
Incubation time: 63 days
Total profit from defensive buys (rounded down to nearest pound)
= £8 (GSK) + £7 (BT.A) + £50 (ARS) + £4 (OMI) + £81 (ARS) = £150
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.