The reviews I were meant to be doing have been put on hold as I've been bed ridden with the flu. The only company i managed to have a look at was G8 Education (ASX:GEM) because i own stock in the company. Their acquisitive growth is strong, with attractive multiples (about 4x EBIT). They also are realising cost synergies, for example, they are keeping employee costs as a % of revenue relatively stable. The highly fragmented child-care services industry provides G8 with much more opportunity. On top of this, they only own about 5% of the market with Goodstart the leader at about 12%. Affinity, is negligible (at the moment accounting for about 1%). I think I'll purchase more of this stock but I'm going to wait for it to fall in price before i do that. Albeit, the debt/equity ratio is getting a bit too much for me to handle! If it rises much more i may exit.
I believe the market as a whole may have a pull-back sometime soon (no idea when). This is because i believe investors are chasing yields as they shift money from cash to securities. This is a dangerous act if there is no justification for doing so. If this continues in the wrong companies, mushrooming prices which aren't backed by strong profits can be detrimental to those who went in at the wrong time and with the wrong mind frame. I.e. short-term focus.
The market being fairly priced/overvalued may also be apparent when looking at Berkshire Hathaway's most recent annual report which shows that the Oracle of Omaha is holding more cash.
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