Originally Posted by
SilverBack
Hi BP, I doubt if you are any older than me but what about believing the figures shown by PPH over the past few years? Even when we are in wheelchairs we can still track listed companies using the fantastic tool called the world wide web and excite our brains over new opportunties.
What's new about using shareholder funds to invest in a growing market? PPH is valued much lower than XRO on most (if not all) measures and in actual fact, I do not use XRO as a reference but place that in a different class of over-excitement while PPH has achieved positive NPAT so much earlier than XRO. However, what about PLX? It is valued as much or more but its revenue is no where near as high or as widespread (and hence not so resilient, even with McDonalds involved).
If you want a low growth, high dividend yield but "safe" investment then can I suggest the electricity generator/retailers? The only thing ramping up their share prices at present is the cut in the OCR by the RBNZ. Notwithstanding, PPH will also gain value from the decline in the exchange rate that we can now expect, because most of its revenues are gained from overseas.
PPH grew its revenue at 40% last year and is predicting 26% for the forthcoming year. Their operating margin increased last year from 55 to 60% and is expected to grow to 63%+ this coming year. I am not too concerned about debating whether tax credits are in or out of the profit declaration but would rather look at the expected growth and whether the company is controlling its expenditure in achieving that growth. Fact is that this company has not only grown its revenue in a dramatic fashion but it is now either NPAT positive or close to it, depending on whether you are prepared to accept the audited financial results or not.
Of course, this is not a company to make the most significant one in your portfolio. It is still a speculative company but is becoming less so as time goes on. However, it is one that shows real kiwi entrepeneurial success on an international market. For it to succeed in the US market, as it is doing, is a real success story.
To date, I have gained 106% on my investment, first made in 2016. I am happy to retain my level of investment since the stock continues to maintain its momentum and the company that I first invested in is a more secure company now. Even the latest announcement of management and Board changes is positive because it shows a Board and main shareholders that think about the future in a realistic manner and are prepared to adapt as the company and its market prospects grow.
PPH has seriously considered establishing a US listing in the recent past but has turned away from that to pursue its future as funded by NZ and AUS investors. Proud as I am as a kiwi, I think it is very likely that PPH will either be bought out by a larger US company or will itself migrate to become a US company. We have seen that happen in the past with successful tech companies with overseas customers that need to keep growing to increase their customer base.
Please keep questioning the results. Those of use who are invested need other opinions to make sure that our spectacles have not become rose tinted.