Thanks for the added explanation alokdhir. Appreciated.
I agree with your preference for quarterly updates. I like focussed attention on key metrics. AIR does this well.
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Thanks for the added explanation alokdhir. Appreciated.
I agree with your preference for quarterly updates. I like focussed attention on key metrics. AIR does this well.
Disclosure is all about what a 'reasonable'person might consider 'material' and there's screeds written by the NZX as to what reasonable and material might or not mean.
From NZX guidelines
NZX considers that deviations from an issuer’s own guidance:
• of 10% or more will usually be material;
• of between 5% and 10% may be material; and
• below 5% will not usually be material.
So a lot of vagueness eh
FPH last guidance was NPAT of approximately $400 million to $415 million...... so unless they think npat going to be over $455 million no real need to update guidance and tell the market
Then they also have an obligation to consider how they going against market expectations (analyst guesses) - that seems to be $480 million
Maybe they're thinking the number will be within 10% of their guidance (less than $455m) and within 10% of market expectations (say more than $432m). Got both cases covered there.
All I know senior management / directors spend hours debating whether they need to disclose stuff - rules are so vague
Fully agree with u buddy :t_up:
What are your views about how much this last update will help rerate the stock ...like Rawz said it can help it run till $ 41 + ....
I think it has broken out from tight 32-34 range after long so may run to make a new high ie over 37.89 ...but not very sure as many still very skeptical of its future and high multiples
Their trading update states; "Hospital hardware sales and usage continue to generally track local hospitalisation surges in countries around the world".
Having a look at how the daily new cases of COVID has been tracking:(source:https://www.worldometers.info/corona...s/#daily-cases)
30 April: 89,325
31 May: 111,332
30 June: 179,261
31 July: 295,220
31 Aug: 253,810
30 Sep: 320,601
30 Oct: 577,913
30 Nov: 502,704
31 Dec: 758,305
21 Jan: 670,465
With peak new cases of 842,871 on 8th Jan.
Half year profit was $225m to 30 Sep. During the six months to 30 Sep the daily new COVID cases averaged 208,000 (from above sample). Since 30 Sep the daily new cases averaged 622,000. Significantly higher- almost 3x.
Could they do $500m FY profit if they did $225m for the first 6 months on much lower COVID cases?
$500m NPAT would equate to a P/E today of 40.45. If the market re rates them to a 50 P/E on FY21 earnings of $500m we have a price of $43.38.
For me the best part of the trading update is; "the company continues to progress the acceleration of investment inmanufacturing capacity". The tailwinds from this is going to benefit FPH and it's shareholders for awhile yet as hospitals and governments replace the older units and then stockpile more than they used to.
I bought more at $35.40 on Friday.
I agree with all your hypotheses ...but at present market is not buying its recurrent growth case ...many analysts including at Jarden are thinking this boost is one off and once Covid under control its this extra boost will taper off and it will not see growth in revenues for next 2-3 years ...means will take it 2-3 years to cross FY 21 numbers ...so they call it " UNDERPERFORM " .
I am with u fully ...seems like FPH will need to prove many wrong with actual numbers so every future results are going to be beating expectations :t_up:
Now in this run it may cross previous high of 37.89 and I am so looking forward to it
I also like future expansion plans but I also like strong growth in Homecare Nasal Highflow Devices for personal ventilation needs after discharge from hospitals . This is going to be their next goldmine as its now very clear that almost 10% covid patients get long term damage to lungs needing respiratory support at home on long term basis and FPH already have devices for that in their arsenal .
Covid is going to a long drawn battle with very lasting scars on humanity . Most experts are saying we will get some control over it by year end and maybe most control by next year middle ...FPH will surely benefit from long drawn battle but their products are actually helping many many recover faster and they are doing a great job as a responsible and humane company . FPH is really a great company with heart at the right place . Kiwis should be proud of FPH :t_up:
Good posts Rawz and Alokdhir.
As to a modified valuation for FPH..... I'm prepared to let the market decide while we wait more info from FPH.
Sure the high revenue increases are encouraging, however IMO it is v hard to calculate forward NPAT as FPH has indicated it's freight costs and Cap Ex are also climbing. FPH has always been expensive in terms of P/E, my entry at an av hold SP of just $32 is because my guttometer signalled that in the absence of accurate NPAT figures there was an opportunity, also the TA signals were encouraging. Happy to DCA up/down as more info comes available.
Re Covid - my theory is that Covid is not going to go away anytime soon. Indeed as mutations of Covid become more prevalent in UK and Sth Africa etc, I see the Covid world as a new reality for the next 2 -3 yrs. Big Tail winds for FPH.
The stats that stick in my mind (and I'm going by memory - so forgive me if I'm not 100% accurate,) is that it took 9 months for world wide Covid deaths to reach 1 mill. However it only took another 3 - 4 months for global deaths to double to 2 mill.
I also fear world wide Covid deaths are under-reported. ( eg can we believe stats from Russia, Brazil, Sth Africa etc etc??)
As to Brokers forecasts...... I've always tended to ignore them. Brokers often have their own motivations and their recent 'underperform' comments could well be an attempt by them to gain more shares from weak hands and those happy to take profits after holding FPH for years.
Just my thoughts as always DYOR and take responsibility for your own decisions.
Nice to see one of the brokers come to the party.
Their P/E estimate doesn't add up to the profit forecast and price target?
Anyway I guess it doesn't matter. Nobody knows where COVID is going, how effective the vaccine will be, how much exposure FPH has got in new markets and what future 'normal' sales would look like in said new markets. Nobody knows what stockpile levels of ventilators governments will build up, what level of home care will be required for those that have suffered covid and recovered. It's all best guess so throw out ya models :p And remember:
- Management have an excellent track record of earnings growth. Trust that they will execute on this opportunity.
- "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price"- WB.
Stats NZ released Dec monthly exports figures and guess what ....FPH had another bumper month 215 mil which is 7.5 % higher then Nov figures ..
Last quarter was over 600 mil and quarter on quarter increase of 24 %
Its now clear that as long as Covid is around FPH will keep doing better and better ...it seems production constraints are limiting their revenues at the moment
Big question remains how long it will keep getting this covid boost ...if very senior WHO expert is to be believed including ours at Auckland Uni Medical college then its 2-4 years further but with diminishing numbers .
I think when analysts bring this longer term now becoming common theme for Covid they may give FPH little more multiples and some for its safe category sector in this shaky markets environment . Overall a safe and growing stock with excellent management ...cant get better then that :t_up: