All share prices in focus
Elite Leisure is an Australian gambling machine operator headquartered in Sydney. It was founded in 1953 by Len Ainsworth.
Today, Aristocrat is the largest manufacturer of gambling machines in Australia and the largest manufacturer of slot machines in the world. However, the business has diversified over the years and now also makes online mobile games. This segment has grown steadily to now account for half of the company’s revenue.
Gaming machines that make the elite can be sold directly to a venue or gaming operator. Alternatively, a machine can be installed on a recurring basis with a proportion of the revenue going back to the elite.
ASX Consumer Discretionary Share Appeal
S&P/ASX200 Consumer Discretionary Index (ASX: XDJ) is back 5.36% Compared to the broader ASX 200 at 5.50% per annum over the past 5 years. The consumer discretionary sector covers a wide range of goods and services, so it can be difficult to compare companies within this group. However, there are some things you may want to consider when investing in a consumer discretionary company like everyone else.
time
Consumer discretionary companies typically perform best when interest rates are low. Just think about it – when rates are low, you’re more likely to go out and buy those ‘toys’ or things you may not really need, but definitely want. It could be new tech, travel, or your power tools—it all falls into this category.
Despite the current high interest rate environment, All has still grown earnings by 11.7% annually over the past three years.
profit
The returns you receive may vary with the current economic environment, but historically discretionary shares of many major ASX customers have been reliable dividend payers.
All current dividends offer a yield of 1.4% and an average of 1.3% over the past 5 years.
familiarity
We are often advised to invest in what we know. Consumer discretionary stocks may be a good fit at this point, as these are companies we see on a daily basis and their business models are easy to understand. You probably have a better idea of how Elite Leisure Limited makes its money than some niche tech company or B2B industrials company.
That doesn’t necessarily mean performance will be a good thing, but it’s certainly easier to wrap your head around when you’re starting to invest.
Price of all shares
https://www.youtube.com/watch?v=Qpuru-blkdc
As a growth company, one way to get some predictability on the price of all the shares is to compare sales to its prices over time. Currently, the price-to-sales ratio of shares of Elite Leisure Limited is 5.35x, while its 5-year average is 5.64x, meaning its shares are trading below their historical average. This may mean that the share price has decreased, or that sales have increased. In all cases, revenue has been increasing over the last 3 years.
Please keep in mind that context is important – and this is just one evaluation technique. Investment decisions cannot be based on just one metric.
Rask websites offer free online investing courses, developed by analysts that explain things like discounted cash flow (DCF) and the dividend discount model (DDM). They even include free evaluation spreadsheets! Both of these models would be a better way to value all share prices.
