Share price down 30% in a few months - about 18% before he crash today
Makes you wonder if the market per se was sort of aware of what was happening with MPG and todays announcement won't be a surprise for some.
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Share price down 30% in a few months - about 18% before he crash today
Makes you wonder if the market per se was sort of aware of what was happening with MPG and todays announcement won't be a surprise for some.
Yes, I was wondering that myself. Interesting that the downtrend started basically after the release of the (quite good) HY results. It was however on quite low (but after the announcement) volumes. I guess it is a big factory - and given that the downgrade was based on manufacturing problems is it hard to avoid that some staff members talk about their frustrations at home or to friends.
Could they have announced earlier? Possibly, but than - you can't really announce every teething problem.
On the bright side - analyst forecasts have been updated - and they don't look that bleak for the years to come:
http://www.4-traders.com/METRO-PERFO...72/financials/
This would turn into a forward P/E of 11.6 combined with a CAGR of 25. Not too shabby ... even if the CAGR is quite likely to drop (I guess, where are they supposed to go as largest player in town)?
Big question is - do we trust in management saying they have the teething problems now under control? If yes, they might be well a buy.
Sure - not a huge number, but I still take that as a positive news if management thinks that buying MPG shares at the current price is a good investment opportunity:
North island GM Dean Brown purchased 15,700 ordinary shares (spending $24,821) at roughly $1.58 each and added that to his existing holding;
https://www.nzx.com/companies/MPG/announcements/296599
Interesting ... and I was wondering who is driving the SP so fast back up again. NZ Super was seeing a bargain and bought in big. They gave today SSH notice. No wonder there have been hardly any MPG shares left for me to average my holding down ;).
https://www.anzsecurities.co.nz/Dire...spx?id=4382739
Sort of confirming my suspicion that MPG is currently undervalued ... NZ superfund typically pretty good in buying good value;
Disclosure says: "On 6 March 2017, Devon Funds Management purchased 1,004,506 shares in Metro Performance Glass Limited." Devon Funds management is holding on behalf of NZ Super.
This means they had already 8.5m shares. Still - a 1 million share top up is more than I could have afforded ;).
Disagree on many other things..
Agree with your thoughts on this one... Buying ?? Holding ??
A lot of investment funds are supporting MPG. But share price is still dropping slowly. Another IPO with high amount of goodwill. I think its a symptom of low interest rates. Nows the time to float reasonable companies and hike up the price because interest rates are low. I see now we have two classes of goodwill. The new one is Customer Relations. Ahh a rose by another name. When interest rates are low it is probably a good time to stay out of the market.
But at least they are producing something where there is demand. Must be a long term hold. I will buy as they drop in price as the market writes off the goodwill, that the company should be amortising.
Some huge volume today as the share price continues to fall.
If you take the view that they are not a growth company and simply a company that has rode the construction boom wave then you should average their earnings over the cycle. In which case MPG still seem over valued.
The funds seem to be supporting this company. For every seller there is a buyer.
Posted on 3 February 2017 when SP was $1.50. Somewhat ironic that since then the FBU fiasco has unfolded.
I think what's clear now is that both these companies are pure cyclical's and neither warrants a PE of more than an average of 10 across the business cycle.
Seeing as we're at the peak of the building cycle now, in my opinion a very strong case can be made for using a PE lower than 10 based on last years earnings at the cycle peak. On that basis both MPG and FBU have the potential for significant further falls.
Something of a brave call after this has fallen so far but I wouldn't be at all surprised to see $1.00 in the foreseeable future. Likewise I remain convinced that FBU's previous tendering process was systemically flawed and a significant number of their contracts won but yet to be commenced will involve work at materially compromised commercial profit margins, potentially further losses to come in future periods.
Why anyone would buy them above 10 times last years earnings, (circa $6.60) is completely lost on me especially seeing as like MPG, they're the building company that was always supposed to be on the improve. To early for a couple of Tui's ?
Hard to believe that it wasn't that long ago I bailed at over $2. A low of $1.30 was good buying eh
Market sure is a funny thing - as Mr P used to say 'the market giveth but the market also taketh away' - good judgement meant I avoided the taketh away bit this time around.
Still watching though - fundamentally a good business (and an interesting one)
Just noticed the turnover for the day...wow more than 13Ml shares traded so far!!!
Obviously - the 130 was expected to be a quite important support line ... but not sure I expected that volume ...
More than 14 million shares changed hands (that's close to 8% of all issued shares) and the 130 did hold.
I know, it is currently fashionable to talk them down, but I still see (certainly at this price) opportunities.
Despite the downgrade early February - revenue is rising this year by 30% ... and given that they invested this financial year heavily into new technology (which screwed up their manufacturing process prior to Christmas) ... would I assume that the coming financial year (with all the new toys working) will be better.
Analyst consensus: $1.77; forward PE: 10.6 and forward CAGR above 25% - and all this for $1.30 per share?
Discl: couldn't resist ...
I think you will be do very well buying at this level ...even if it drops a bit more next week over $2 sometime later in the year is still a great return.
Strong building consents numbers out today - nearly 30,000 dwelling units a year need windows. And the retro double glazing going well. Plenty of work for next couple of years before the recession strikes.
Only short term worry would be NZD
After applying vast amounts of flea powder one must stand back and allow time for it to work. Watching the charts for hard evidence this downturn is over before considering backing this pup.
A big chunk of that 13mil was off market for $1.26 as far as I can see
All cool regarding information from "Karloss68" Percy
Superhot Update
Attachment 8780
See.....Told ya so
Starting to see value in this one at the current price. Anyone else diving in?
The seller was Fisher Funds.
https://www.nzx.com/companies/MPG/announcements/299279
Typical Fisher Funds buy high and sell low!
Hi JayRiggs
They are not perfect and don't get them all correct - most Fund Managers have similar train wrecks in their past.
About 10 years ago I spoke to Carmel Fisher at a seminar and asked her how many times they got it wrong. When her reply was "about 1 in 8" I was impressed. Firstly here was someone not making any "b...t" claims (which I wouldn't have believed anyway) and her body language supported that statement, and secondly because it tallied with a similar comment that I had read that Warren Buffet had made. I was left with confidence that here was someone I could trust and believe.
Over the years Fisher Funds have not been backwards at admitting they have got things wrong and I have always found them creditable, approachable and honest to deal with.
Certainly their failure rate has been much less than this "perpetual Newby's" - think WYN,& SLI in common with others on this site, though I have got the odd one right (XRO @ $ 1.00 @ IPO then their $ 0.90 next round).
Cheers
Blondie
Cheers percy.
Metro Hamilton been pumping last few months, busiest it has ever been, my business has had best financial year since way back, flippin seems odd from a quick glance at shareprice that its been heading down.
Attachment 8785
Looking good
I've been looking at this co for a while. Chart looks set for a reversal?
there are certainly a number of indicators pointing towards a reversal:
- 130 is a very strong support level (the trend changed at that level before) - and so far seems to hold;
- Unusual high volume on Friday would point to "capitulation"
- 130 is basically a fair fundamental valuation if the company suddenly reduces its growth to something like 2% p.a., otherwise it is a steal (their current 5 year CAGR is 13.3!)
- RSI(14) crossed back over the 30. Another indicator for an emerging uptrend ...
Discl: holding and accumulated between 130 and 132 ...
Obviously - DYOR;
Anybody else noticed that we had this week volumes well above average and the SP keeps creeping up? Anyway ... due to popular demand I thought we can use the combined wisdom of sharetrader (well, yes - this is YOU) to do some SWOT analysis of the company:
Strengths:
- largest NZ Glass manufacturer with more than 50% market share.
- natural moat with plenty of sites allover the country: glass manufacturing is better close to the demand side - expensive transport
- reliable and consistent revenue growth in the past (CAGR over the last 5 years: 13.3 %)
- with one exception (FY2017) consistent EPS growth every year (and hey - while the FY17 results are not out yet, according to the forecast they are at worst 7.5% below last year, at best they achieved the same EPS as 2016)
Weaknesses:
- they clearly didn't plan sufficient contingencies for the teething problems they suffered in the recent equipment upgrades and schedule changes. Question is - do they learn from these mistakes or does this point to a systematic skill shortage?
Opportunities:
- building market booming
- Ongoing demand for houses and office buildings (ChCh rebuild, Auckland housing shortage, population growth)
- increased use of (high margin) specialised glas (like heavy duty) in modern building architecture
- ACC buying at an historic low - do they know something Fisher Funds and the markets didn't?
- A number of technical indicators this week point to a possible trend change (capitulation, SP increasing with good volume, RSI creeping back over 30)
- fundamentally ways undervalued if we assume they manage to keep current growth and earnings going (just put their EPS and CAGR into the Graham formula) - and be as conservative as you like
- Australian acquisition seems to do so far just fine (but early days) - another big growth opportunity?
Threats:
- building market might turn sour (but then ... we have a housing shortage - where will all the new immigrants sleep?)
- Australian extension might be more difficult (lots of the strengths and opportunities above missing for the Australian market, and MPG would not be the first Kiwi company losing money over there)
- Fisher Funds selling at an historic low ... do they know something we don't?
- Despite a small recovery this week - trend chart looks shocking
- there always might be a black swan just around the corner
On a more subjective front - I had some interaction during and after the recent downgrade with Nigel and and decided that I give them at this stage the benefit of the doubt ... but hey, this is just me.
Anybody who wants to add to the analysis above?
Discl: holding (XXL).
DYOR
BP - you will do very well getting into MPG at 130 odd. A great opportunity to get cheap undervalued shares.
What you said in your strengths is all true and will see Metro performing well into the future. There will always be new houses and buildings built (boom or bust times) and retrofitting double glazing and other inititiatives just add to the base
They'll still be doing well in years to come so now you got in cheap don't be tempted to sell ...but then again at heart I think you are a trader so will take profits when punters perceive 'trouble'
Hey BP - you on a roll with your recent big entries into SUM and MPG
Might even convince you about Pushpay as your next play - really cheap at the moment
Hmm - define "trader" vs "investor" - but this is probably stuff for a different thread.
Re PPH - how low would the SP for a loss making hyped up start up need to be to qualify as "cheap"? I guess sure, the market might drive it up the XRO, RAK, WYN or PEB-hill, and with some of them at some points in time you could even say with the benefit of hindsight that this was cheap (i.e. less than what the market was prepared to pay at a later stage). However - from a fundamental perspective was so far none of these companies (including PPH) ever "cheap".
But probably better to continue this discussion on the PPH thead ...
doing a new tiled shower at home with glass sides , metro glass said 3 weeks before glass ready I don't know if that's normal but seems a long time to wait for glass so I guessing they must be busy
Good summary BP. I've been watching this company too and I'm tempted at the current price, but not sure how to view last years purchase of AGG. Seems a hefty sum to pay for not a lot of earnings. NZ companies aren't too flash hot with their OZ purchases either.
I'll certainly be looking at that a little closer before I take the plunge.
But NZ side of business looks good. (Currently looking out over Auckland there are a lot of cranes at work!)
Thanks Black Peter. Your post is very informative and I will use it to further my research into MPG. The reason why I'm interested is that I used to work for Eckelt Glass in Austria briefly as a teenager and was very impressed how big their export market was and how technical actually the product was.
I use to fit frameless showers till about 12 years ago (gave it up as tough on back, annoying having business phone ring when lifting/concentrating and better coin elsewhere as was labour only for large companies and business grew).
Generally clients would be informed after measuring that we will be back in about a week, as the time lapse from ordering to receiving toughen glass with processing (ie holes drilled, flat polishing, cutouts, notches) is typically 3 to 5 working days.
3 weeks is a good sign Metro Auckland is pumping like Metro Hamilton bull.
I have some of these - it has been a tough up and down on this lot. Many were quite keen late last year as there was some talk from Wellington about a rental warrant of fitness, for rental properties including getting double glazing as a compulsory thing to have. Alas that talk has seemingly stalled because it's election year and property is becoming quite overheated.
Am I too optimistic that it will recover to around $2 a share?
Feel free to lol.
Cheers
Maybe there is many years of the building boom left to come ?
Where are we going to house all these new immigrants ?
BNZ economists reckon there's presently one million Kiwi citizens living overseas.
I suspect a lot will want to come home in the years ahead with so much strife in so many parts of the world lately....this will surely exacerbate Auckland's problems.
http://www.nzherald.co.nz/nz/news/ar...ectid=11831599
I shudder to think what Auckland's traffic will be like in 5-10 years from now :eek2:
I guess all this mess is good for companies like this one.
We are probably due for a correction, but the main people that it will affect will be Chinese Investors that don't exactly vote in NZ elections. Mind you grumpy generation rent if provoked to vote, will throw it to a Labour/Greens/independent anyone one but National frame of mind.
Given that in Auckland, generally if some one spins out on spaghetti junction or the bridge, because it's raining which it does quite a bit which means over 500,000 people are inconvenienced on the way home. Yeah. Nasty.
So glass. Well the demand for housing will continue no matter what the credit market will or won't do. I presume this means the need for construction materials which is what this is. Blackpeter did point out the pros and cons of this company really well is there any other smoking gun type bits of information out there?
Competitors.....
http://www.stuff.co.nz/business/9144...n-christchurch
1.8 million in shares already traded today.
research suggests risks around productivity and execution and in being able to translate this into meaningful margin increase also she be right attitudes also slow down becoming evident.
He might need to get his cheque book out again as it's trying to break below $1.30, watch out for that broken glass BP. PS-The chart looks like a cliff fall followed by a serious rollercoaster. PPS-Put a bid on myself at $1.29, might as well take a wee rollercoaster trip just for the fun of it.
Maybe they have hit a bottom at $1.30 ? PE 11.5...BNZ reckon there's about 1 million Kiwi's presently living overseas. With the world security situation deteriorating by the day I can't see any let-up in the immigration rate of 71,000 per annum wanting to come to little ol safe New Zealand. All got to live somewhere. Maybe no end to the building boom in the foreseeable future ? If management can make a half decent effort to convert some of that building boom into bottom line results, (unlike FBU who seem to have systemic issues potentially going on for years with questions regarding all of their construction backlog previously won using systemically flawed bidding processes ?), then maybe this is the one to own instead of FBU ?
MPG is a grizzly type bear..If it breaks below 1.30 (Primary support) it will fall quickly to form a low (TA target price 1.10)..MPG being a bear says that without any TA buy signals there's a good chance of it breaking its 1.30 support, if not this time perhaps the next time......Couta.I fail to understand your mirror image investing style:confused:..its even doesn't fall into contrarian investing strategy.
MPG stock sudden fall is attracting some Contrarian Investors, but not enough yet to trigger buy signals...
Investment strategy says you don't trigger a buy just below a major support break (when others trigger a sell), you trigger a buy just above support (as what is happening now) with very tight stops just in case it breaks..
Was a bit of a humourous response to BP's enthusiastic loading up on MPG. I did have a bid on at $1.29 last Friday but that $1.30 seems to be providing quite a good support level at this point. From my viewpoint it would only be a small punt on the basis that it could give a 30-40c upside over the next 6 months. A bit like PPH aye Hoop, you can't win if your not in.:eek2:
Attachment 8801
Yup, appears so.
Closed at 1.27. What do you guys have your stop loss as? I put mine in at $1.25. Had a little go around 1.30 but looks like it's heading lower, at least in the short term.
I got talked into this pup by some guy with an XXL holding...kicking myself that I should know better and wait till the technical's showed a rebound...now licking my wounds because I'm underwater on this and licking my wounds on PPH as well...running out of saliva. I will stick with my standard stop loss of 15% and take the beating on the chin like a man if it comes as I thoroughly deserve it ! Never buy on a downtrend, EVER ! I will definitely not be doing a Couta1 and doubling down on this or PPH. When you're in a hole, STOP DIGGING ! and look for a ladder.
As BP pointed out their CAGR in sales has been very sound over the last few years but can they translate that into growth in EPS going forward, that's the question ! Speculative I'd say.
Only a 2% portfolio position for me so all up including the other speculative pup PPH less than 5%. Suppose every hound needs a couple of pups in his pouch to remind himself of what decent shares should look like. Disc: Grumpy hound.
Relax guys, it's not as if you paid $2 for the stock, another 6 months and you both could be 30c in the blue. PS-Im feeling more grumpy about Sum's current share price direction, hard to comprehend why you would sell it to buy Oceania:confused::mad ;:. PPS-Buying in a down trend can be fun Roger, it's kinda like big game fishing if you choose the right stock.
MGP are not alone.
This sector should have been enjoying boom times.
Yet FBU,STU,OIC, and MVN have been serial underperformers for the past few years.
It's different this time?...lol.
I've got a stop loss of 1.24. However, this is my second time in, the first time was when it hit 1.30 a couple weeks ago i then sold at 1.35 because the rally seemed to be fizzing out. And then for some silly reason i decided to buy more today at 1.28 even though it broke the 1.30 support level. From a fundamental standpoint i'm happy to buy at this price, however, panic sellers could take the sp anywhere from here.
Lol i'm currently busy catching falling knives with Mel and Sum too, also a bit of Met for good measure, should be an interesting few weeks:scared:.
Chart looks lousy, which matches my fundamental research conclusion
Hope you are not referring to me ;). I never talk people into buying shares ... only put the facts I knew about MPG on the table for everybody to see, and so I assume it was the facts speaking for themselves.
As far as I know - that facts have not changed ... i.e. I still see MPG (at this price) as a solid long term investment (or midterm in case the share price might in some months again get ahead of itself ...);
In my view a valid choice for somebody "hunting for value". Not so sure about "digging for bones" ... but this is probably just because I am not that deep into the canine psyche, though I understand that canines consider bones as treasure ...
They say the market is in the short term a voting machine and in the long term a weighing machine. Haven't found many people good in predicting votes (well, not me - I missed in correctly predicting the recent election disasters), but predicting weighing results I find easier.
I expect (in a months time or so) a 2017 result as per their Feb announcement (great revenue growth, small earnings drop) and I expect indications for a bumper FY 2018 - at least revenue-wise. If this happens, than I am pretty sure that the share price will look after itself.
What I don't know is whether they managed to get on top of their manufacturing trouble ... but hey, should we really assume that a New Zealand company is not able to learn from its early mistakes? What happened to Kiwi ingenuity?
Discl: holding and not too worried about the current SP jitter ... but obviously monitoring the news
DYOR;
Be careful where you troll your lures mate. Only go fishing for big game in companies that really are stupidly low in terms of their SP and where management and directors have earned the respect and trust of the market. SUM is one of those companies, this one is definitely NOT ! No way I'd double down on this puppy punt !
BP Your SWOT analysis was good, I only have myself to blame for breaking one of my own rules about buying in a downtrend. I know better and deserve a beating if one is coming.
https://www.nzx.com/companies/MPG/announcements/300187
NZ super bought more i see... interesting.
I haven't really followed them much either mate but there's some useful information in their monthly updates, the latest of which is here https://www.nzsuperfund.co.nz/sites/...e%20Report.pdf
just want to say thanks for sharing your thoughts everyone. im kinda new to trading but i want to take it a bit more seriously now (sick of savings doing nothing in the bank) so interested in hearing everyones ideas. ive had fun dabbling in the past - good times with power company IPOs, not so good with fruit companies APF.
sounds like you guys do a lot of homework (which i understand is the sensible thing to do) but can i ask do you find the market is driven just as much by random rumours vs. solid financial data? is that frustrating or does that just add to the fun of it all?
I was in the same boat as you late 2015 - read anything and everything out there, take a closer look at the underlying business rather than peering into the stocks performance/charts/price targets before you make a decision to take a piece of a company for yourself...
There is plenty of revenue growth to come leading up to 2020 for MPG... hoping management will handle their "inefficiencies" a little better in the near future.
MPG is worth a look for a long term investor, if you want exposure to the construction industry you may want to look at Steel and Tube as well... DYOR
Metro consistantly say they excel at customer service well heres a tip - currently when you want a quote for work it is sent to there head office and then quoted and sent back, maybe mpg could add a email reply ( thanks for contacting us we have received your query and will be in touch shortly ) instead of nothing and having to chase up whether email was actually received.
There not the only ones that lack at this simple customer service maybe its not there fault they do glass not I.T.
For a company with a market cap of 235 million this has had simply huge volume going through in the last few months. Another 4 million in shares traded today. Holding steady around $1.27 which I think is encouraging.
I guess nobody can later on complain that they didn't had enough opportunities to get in around 130. Nice to see the support this morning building up and pushing up :); Obviously - the SP is ways below any relevant MA (i.e. the trend looks still terrible), i.e. people must trust their fundamental analysis to get in now, but that's an area the big boys typically are good at.
Discl: holding (lots) - mind all my confirmation bias:
Mmm the support has held up pretty well so far after looking pretty touch and go. However, i'm still skeptical, every time a push back happens a myriad of sellers flood the market.
Disc: still holding
Within a +/- 10 cents band around the current SP (135) there are 4 times as many buyers than sellers. Anticipating a positive impact on the SP ...:cool:
Prima facie it would appear the large volume seller(s) have finished or are near to finishing exiting their position(s) which if correct might signal we've passed the bottom, (which would be nice it that really is the case). Not a high conviction / high weighting holding for me but clinging on like a slightly sick terrier to a small bone in this one.
It appears that annual rsults are due out mid-May. I am anticipating revenue and profit growth (in line with the projected forecasts) - which would give a healthy bump to the SP.
What are your thoughts gents and ladies (and everyone in between)?
Same here ... expect results as per forecast (somewhere middle of the road) in combination with a quite healthy outlook for 2018. While last years Culverden / Kaikoura / Wellington Earthquake clearly put a dent into the number of building permits issued per month ... the overall trend is clearly pointing upwards and back to the long term trend line.
Attachment 8817
In average it takes 9 months for any newly permitted house to be in need of windows. It is not rocket science, really ...
Sofitel's new Soho hotel on Commerce Street, Auckland, I see has its glazing going up after what appears to be close to couple years of demolition works.
Definite revenue 'lag' for whoever is doing the glazing for that building because it would be years between the consultation, design, building, installation and ultimately revenue for such a job. Hope it is Metro that is doing the works.
Ending the day with 138, i.e. it managed to push through the MA30 and stay there. As well reaching "higher highs". Obviously still early days, but just nice to see another couple of indicators turning green ...
Interesting to find out if what fund provided the support... I don't think the spike came from retail investors.
Result due tomorrow.
Will be interesting?