KFC SuperCoach Investor: All the value is in forwards in 2020
Defence is usually the bedrock of a KFC SuperCoach team, but this year all the value is at the other end of the ground. Here’s who to jump on before it’s too late.
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The KFC SuperCoach Stock Exchange was cast into unknown territory over the weekend following a temporary trading halt to all Essendon and Melbourne-based stocks.
There were some coaches – including yours truly – whose portfolio boasts an unhealthy allocation towards the Demon and Bomber absentees and the outcome – as expected – was less than desirable (1756 SC).
Other coaches – who should count their lucky stars – have leapfrogged the competition and escaped the market chaos unscathed… but for how long?
The SuperCoach Investor, Daniel Begala, reiterates the importance of parking the shambolic Round 3 performances and finetuning your portfolio for immediate and sustained successes in FY20.
THE TRADING HALT
The temporary suspension of all Melbourne and Essendon stocks may have thrown the market into turmoil, however it presents a lucrative opportunity to astute investors to leverage and benefit.
Firstly, both Harley Bennell ($123K) and Trent Rivers ($123K, MID/DEF) are now available for selection for all of those coaches that opted for the likes of Darcy Cameron and Sam Sturt during last week’s rookie bonanza.
You’ll capture all of their upside and most likely benefit from an additional cash cow (like Cameron) that some investors – again, myself including – were unable to acquire with just the two trades.
That could be an extra $100K, $150K or more for future trade endeavours and could be pivotal at the business end of proceedings.
If you’re flush with rookie options, why not turn your attention to a red-hot Christian Petracca, who most likely would have been priced above $500K, but now presents solid value at $470,000 with a break-even of just 34.
I am on and look forward to a consistent (top six) dividend.
VALUE INVESTING: FORWARD VS DEFENCE
To the naked eye, there is no difference.
But to seasoned investment professionals, there is value and opportunity in the forward line versus defence in 2020.
Based on the top 10 averages in the forward line, there are seven stock options available for less than $500K including Simpkin, Brad Ebert, Petracca, Brendan Parfitt (one game only), The Smiths (Bailey and Devon) and Chad Wingard.
This small sample of stocks are producing weekly dividend distributions of 104 to 125 SuperCoach points, but are available at a fraction of the cost to their defensive counterparts.
The backline scoring leaderboard is composed of seasoned veterans, many of whom will not deviate significantly from their lofty starting values.
Of the top 10 defensive stocks averaging between 101 and 123 SuperCoach points, there are only three – Brayden Maynard, Sam Docherty and Adam Saad – who are currently valued less than $500K.
That being said, I think we’re on the precipice of my favourite SuperCoach phenomenon: ARBITRAGE.
The value is inherently in the up-and-coming forwards, so if you’re chasing premium reinforcements it’s essential that you preference the forward line stocks in Round 4 and load up accordingly.
HOUSTON, WE’VE GOT A PROBLEM
I repeat, HOUSTON, we have a problem!
Dan Houston was all the rage this pre-season, and with good reason.
He finished FY19 in a flurry, displayed an upward scoring trajectory year-on-year and was even mooted to rub shoulders with Travis Boak in the Port Adelaide engine room.
All of the investment projections warranted taking a long position on Houston in Round 1, but unfortunately, it’s failed to eventuate and 20 per cent of coaches are now left with a $440K mid-pricer that has been eclipsed by rookie revelation, Brandon Starchevich.
The silver lining, however, is that Houston has only depreciated about $44,000 and the downside has been somewhat lessened across Rounds 2 and 3.
What do we do next?
For me, it’s simple – it’s time to short the Port Adelaide utility.
I don’t think we’ll have sleepless nights disposing of Houston, so I’ll be looking to jettison the Power stock for the likes of Petracca ($470K, BE 34) or Kangaroo flyer Jy Simpkin ($483K, 32) if I can rustle the capital.
MORE SUPERCOACH ADVICE:
Round 4 trade guide: The KFC SuperCoach silver lining in Melbourne-Essendon delay
KFC SuperCoach 2020: The Phantom names the top replacements for Bulldogs star Josh Dunkley
KFC SuperCoach Round 3 rage trades: Patrick Dangerfield’s poor run at GMHBA Stadium a worry