Mar 302017
 

Recent Purchase – Yellow Media Ltd

Although most of my investments are in blue-chip dividend paying companies, it can be fun sometimes to speculate on smaller companies as well. It’s kind of a risky play, but I recently picked up 120 shares of Yellow Media (TSE:Y.) I paid on average $8.14 per share, plus commission.

The stock is trading at 0.61 Price/Book ratio, so its net assets are worth more than the company. The forward P/E ratio of 11.8 is also quite attractive. The phone book industry is dying, but Yellow Media is transitioning into the digital world. The reason I decided to buy now is because the company just hired a new CFO and the stock has started to go up again. 🙂 It has greatly reduced its debt over the past several years. Although its print business is suffering, it plans to organically grow its digital revenue between 5% to 8% a year. Yellow Media already owns a lot of online content and gets tons of internet traffic. 🙂

I first came across Yellow Media when I read Nelson’s post on The Fool last month. He analysis appears to be sound. I believe (Y) has potential to come back from its current lows. But it’s far from a guarantee. The stock currently trades at about $8/share. In 1 year from now, Yellow Media stock will either grow to over $12/share (50% gain) or drop to something like $6/share. I’m investing because the upside potential outweighs the possible downside for me.

The First Counterfeit-Proof Coin 

In other news, a new version of the British 1 Pound coin was introduced into circulation this week. It is full of stunning details and high tech security features. According to the Royal Mint this is the most secure coin in the world. 🙂 The reverse side of the coin features a bold new design that shows the English rose, the Welsh leek, the Scottish thistle and the Northern Irish shamrock emerging from one stem within a royal coronet.

The new coin was created to deter counterfeiting. The Royal Mint in England says that approximately 1 out of 30 £1 coins in circulation are fake, lol. That seems like a lot. I wonder what proportion of U.S. and Canadians coins are fake. The new 12-sided £1 coin, the Royal Mint says, has security features that are “impossible” to replicate. I guess this new coin was just mint to be. 😄

As with all new coins, this new release creates the perfect window of opportunity for people to make some side income. If you live in the U.K. you can walk into a bank today and pick up these new 1 Pound coins for their face value, about US $1.25 each. Then you can sell them on eBay for 3 or 4 times as much. 😀

This is because coin collectors around the world can’t wait to get their hands on it. Since it’s so new there aren’t many of these coins outside of Britain. And they are affordable enough that buyers would be willing to pay a high premium for them. The average sold price on eBay as of writing this post is about US $7 per coin. That’s a huge margin.

A few years ago I suggested how Canadians can make $100 from the howling wolf gold coin by essentially using the same method. Whenever something only exists in one country, and there is demand for it elsewhere, whoever finds the most efficient way to bridge that gap will make the most profit. 😉

Also, I’m honored to be in the list of top recommended finance blogs from Multi Millionaire Road. Check them out. They are pretty cool.

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5 Comments on "Speculative Buy of Yellow Pages"

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Stephen
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Interesting speculation on Yellow media. Hopefully it works out for you! At the very least with the assets being worth more than their book you’d think you should at least get that growth to even

Mrs. Picky Pincher
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Oooh, that coin is badass! Anything to keep genuine currency in the market and not the fakes. 🙂 Neat idea with YellowPages! I’m in marketing and over the last few years I’ve really seen them stepping up their game with their digitization. It’ll be interesting to see where they go!

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[…] did contribute $1,000 to my TFSA in March to purchase shares in Yellow Media. I’m not sure if TD is calculating the internal rate of return (IRR) or the total return of […]

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