Originally Posted by
FarmerHamilton
Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.
Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.
Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.