Agree, cards on the table I have placed a sell order today for my full current holding, cutting my looses at what I think might be a peak. Will consider buying back in at a lower level at maybe $1.80ísh for a long term hold, perhaps.
Printable View
My rough back of the envelope NPV calculation had it sitting around 2.02 with 5% growth in revenue from 2018 . However NPV is not a really good way to value CNU as it will continue it make money for a long time after the 10 year period I used
Would have it sitting at around a PE ratio of 11 in 2015/16 .
With that as a base and upside from favorable FPP decision, more cost efficiency and/or faster fiber uptake.
PE ratio would drop significantly from then on.
Of course a bit of guess work is required to come up with these estimations but in 4 years on a PE ratio of 15 sitting around $3.30 a share. Would be annual compound growth of around 12% plus any dividends. PE of 15 seems quite reasonable considering it will eventually be priced as a utility
If an unfavorable FPP decision draft in December is to occur then in the short term will push the price down again and would provide a good buying opportunity. However at $2.08 it still seems a good investment with plenty of upside.
If we take a long term investment view of 15 years and a company with lower debt and full fiber network with an increasing population then the investment is even more attractive.
New Zealand's total population is projected to reach 5 million in the mid-2020s
I'm also sure when the old network is switched over in many years to come that all that copper can be stripped and sold for a quite a tidy sum .
Agreed - I would think that a CNU investment would be in the very long run (think decades) cash positive (as most utilities with monopoly status), though not with stellar returns (as most regulated monopolies). In the mid term it will be a playing ball for politicians and bureaucrats - and I don't dare to imagine what would happen with their SP if at some stage the Left takes over.
Again - in the long run you probably get your capital plus some interest back, but what's better about them than e.g. an investment into e.g. IFT (which still might have a bit of grunt in its SP) or any of the power generators (which are probably as well starting to plateau, but with less immediate risk of bureaucratic interference)?
The question is in my view just whether the current price is a good price to buy in. The returns look much nicer, if you buy the share at lower prices.
Discl: sold CNU and MRP, still holding IFT and MELCA. DYOR
Some good news stories for Chorus: Netflix is coming which will encourage people to migrate to fibre and the cost of future fibre installation is coming down.
https://pr.netflix.com/WebClient/get...do?newsId=1751 http://www.stuff.co.nz/business/indu...-installations
The big Com Com decision is just around the corner. If it goes badly for us poor old Chorus investors who only ever wanted a piece of a boring infrastructure company, please be gentle with us :)
Anyone want to make some guesses at the Draft FPP price on monday.
Positive comments by Amy Adams in Sunday Star times today...I wouldn't be surprised to see another upward surge in the SP going forward.
Looks to me that it will be on the 2/12/2014
http://www.comcom.govt.nz/regulated-...ing-principle/
http://www.comcom.govt.nz/the-commis...r-consultation
Up $4 per copper line
Good sense has prevailed
Don't you mean DOWN $6.59 -being- $3.95 less reduction than might have been?
"Today’s total proposed wholesale price for the UBA service will therefore be $38.39 per month, compared to the price that came into effect yesterday of $34.44 per month. Prior to yesterday, $44.98 per month was the price Chorus has been able to charge for the UBA service for the past few years."
http://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2014/commission-releases-draft-decisions-on-prices-of-copper-lines-and-broadband-service-for-consultation
This new price is still going to hurt Chorus big time,from memory every dollar reduction from the $44.98 will reduce their income by around 23 million.
What does that announcement really mean
Beyond me and you guys can seem to agree
Impact on Chorus?
Impact on Spark?
Will be good news for the shareprice
Yes it will hurt Chorus, but this effect is being diluted by fibre uptake which is expected will markedly accelerate with so many video streaming services launching. The more people who switch to fibre, the less relevant the revised copper price actually becomes. I just hope Chorus has learnt from this experience, and doesn't carry the same arrogant ideologies forward into future fibre pricing
And lets hope their next advertising campaign to get people onto fibre is better. Gigatown was a waste of money and didn't incentise anyone to sign up to fibre. Those that won in Dunedin now have to pay for a 1 Gigabyte service that very few would actually use (it will cost more than a 30Mb service which is more than enough).
+32 cps now $2.46 and a return to the Nov5 2013 breakdown price. Should put a smile on faces of beleaguered holders.
Was down $67123, just broke even a minute ago.
Bird man, I recall you were also up to your nuts on cnu as well. Well done to you
Yes a big relief. I was sure cnu was going to be a boring old investment. Boy was I wrong
Well yes cannot help but feel vindicated but the grizzled traders will be mumbling idiots...should have sold earlier on the signals and then bought back in on the signals again....But that's another story;). It will be interesting to see if they revert into what they should have been all along , and for what I purchased them for, i.e. a dividend producer. maybe in June.
Do I detect a note of soure grapes ?? :)
The service into Dunedin is well supported ( the Uni, ARL, and quite a number of smaller user's)
One thing that was holding Dunedin back was the lack of IT services (slow & disconnects).
A number of start-up's would have liked to establish in Dunedin but for reasons above.
God only knows... Dunedin has a terrible dose of "Öld bugger syndrome" right now, so
new younger blood is badly needed. UFB will help
BB
Not at all. I am surviviing fine at home with Copper and will upgrade to fibre early in the new year. I am sitting in an office with over 500 poeple and our internet connection is only 100Mb. There are few users that would require 1Gb speeds with existing technology (Universities and Weta workshop).
Maybe in the future for streaming 4k TV to multiple rooms in the house but 100Mb is probably enough for that and by the time that is avaliable, 1Gb will probably be an option.
Start ups may think they need it but if they are Tech SaaS type companies, they will probably host their service in the US anyway (atleast it wont be their issue as they will be using another companies servers and connections).
UFB is good but 1Gb is overkill at the moment and getting back to my original point, Gigatown did absolutely nothing to entice people like me to switch to fibre. THe only think Gigatown did is piss off alot of people on twitter.
I don't think the total objective was to get people to switch as soon as, but more to create awareness and understanding. It certainly did that in my area. (ignorance prevailed previously).
Many here people are looking at the TV angle.
I.E putting house hold money choice streaming rather than Sky TV.
Still we are about 2 years away yet
cheers BB:)
http://www.nzherald.co.nz/business/n...ectid=11367431
Here we go. The squealing has started. Where's Hooton and his merry band of wreckers.
Hmmm, you may not have been the target audience if you're sceptical of Gigatown. My Facebook feed has been hijacked for the past few months with people referencing this in their posts, I got contacted by friends to vote, and even Otago university sent out emails to ex-students asking to participate - which I did. If you didnt see the visibility, it may not have actually been aimed at you..??
I work in a workplace that has real issues with broadband in NZ, all of our calls internationally are all over the place, video conference calls with more than 5 people are rubbish, and the files we upload (all between 100 megs - 1.5 gigs) take far too long to back up to the cloud. Anyone using uncompressed development files in any field will know the pain of internet speeds in NZ. I don't mean this personally, but if you don't think there's a need for the change to UFB then you might not be 'in' the change that's occurring... doesn't mean its not happen without your presence of it.
Yes - I saw it on my twitter feed. Did it make you sign up to UFB?
I'm not saying I dont see the need for UFB. I'm saying I dont see the need for 1Gb UFB. 100Mb UFB would be a huge step change for you if you are currently on copper.Quote:
I work in a workplace that has real issues with broadband in NZ, all of our calls internationally are all over the place, video conference calls with more than 5 people are rubbish, and the files we upload (all between 100 megs - 1.5 gigs) take far too long to back up to the cloud. Anyone using uncompressed development files in any field will know the pain of internet speeds in NZ. I don't mean this personally, but if you don't think there's a need for the change to UFB then you might not be 'in' the change that's occurring... doesn't mean its not happen without your presence of it.
Out of interest, what are the 1.5g files? Video? There cant be many businesses that deal with files that large, and if they do, that require ultrafast upload.
Hey, I'm just happy that it's above my $2.47 purchase price. Still feels like a dream.
This company sure has been a wild ride, for a so-called value play! I'm sure it's not over either. However today is a rare moment to enjoy, if not to marvel at ones investing prowess having got into the mess in the first place (or perhaps just not got out before it became a mess). Another one for the lesson book.
Newbies careful with this one I think. Sold my freebie today.
Morningstar moves with an upgrade:
"Valuation: $2.40
https://ost.asbbank.co.nz/Content/St...ation_Hold.png
Last updated:
02/12/14
Lifting Fair Value After Earnings Upgrades; Dividend Resumption Likely"
Yes, sometimes it is good to wait, and other times it is not. The trick is to figure out which scenario is which ;). Lots of examples around where people waited far too long ... RAK, GEN, DPC, XRO, PEB in all these cases you could have sold too early - or too late. Related to CNU - good to see them back, but to be honest - I am not quite sure, whether the CNU roller coaster has already stopped. Take care.
Yesterday's action just blew away all the chart resistance and the price settled around the Nov 2013 rout.
Attachment 6556
Enjoy. :cool:
Yes, saviour the moment. At one point about this time last year I was actually crying. pathetic but true.
Let the good times roll.
Sold 25 per cent of my cnu today (15,000 shares) at 2.73. Will keep the others and see what happens over the next few years. Fibre is the future 😄
I agree with you that fibre is the future and for some of us its here and now every day (courtesy of lots of steamed broccoli and the occasional glass of Metamucil). I'm out ..sold most of my holdings today for a small profit equivalent to what it should have paid me in dividends:mellow: I believe it will be worth holding long term but for me ...bottom line is dividends and when something stops producing dividends my interest turns elsewhere. I feel lucky to have gotten out with no singed arse hairs. However it could have been a disaster so useful lesson learned.
What is up with this stock? I really didn't think the news was so great it necessitated a 2 day 25%+ rally. Are our instos that bored these days that they feel they need to make Xero like runs again? There's a massive gap from $2.20 that I expect to be filled at some point. Well overbought and massively outside the bollinger bands...
Yeah me too. I allowed the Sparky effect to influence my decision to buy way back then for our fam estate and would now like to thank his see thhru spirit;pass the ouja board.Phew!!!https://encrypted-tbn3.gstatic.com/i...PPXHXk1Gh83m9Uhttps://encrypted-tbn3.gstatic.com/i...Zb4tX2DpHyY0VYhttps://encrypted-tbn3.gstatic.com/i...We332FX-gDxIny
BFG - did your chart not predict the rise that's happened in last few days?
http://www.chorus.co.nz/chorus-releases-update-of-its-fpp-modelling-data#sthash.SBMNWOaV.dpuf
I wonder if this is fuelling the buying frenzy? Chorus's research from recognised experts suggest a $45 FPP price. Chorus has always said this and most recently made the point to investors in early October. I assume people are buying anticipating a higher final FPP price.
Congrats to all who have broken even or sold for a profit. I do have genuine concern however for anyone buying at these current levels,what if the FPP final determination comes back with a lower price than the draft as I understand drafts can be more aggressive than finals. If the price come out at $45 Chorus wouldn't have any buyers for their lines or as JK said last year that Chorus could go broke, he might then be saying Spark could go broke. Time for a game of pass the poison parcel anyone?:eek2:
Thanks for that info bobdn-looks like an informative web cast at 10am this morning.
Like you I sold 25% of my holdings yesterday.
I need dividends to pay my margin lending so holding onto chorus-and buying more at sub $2.00 prices was a difficult decision.
I am working today and it would be great if you and others could post what you make of the webcast.
thanks
Can anyone post a link to todays webcast? Thanks
Considering the present gradient/trajectory in relative price change... Im reminded of the toy rockets I built many years ago on the farm... what goes up ! ... must come (...)
Well done... I had not even thought of that one.
My personal conjecture is that if instos are driving the present price hike then it "could" be a shallow/long drawn out fall back, due to their "Bulk buying power" which might continue over the next few days?.
OR it could just fool us and become the new "average line".
Only time will tell.
Congrats to those who had the guts to "hold tight" and now see some returns.
The next spike could well be when they announce divie reinstatement.
36 minutes in and so far it looks like they are playing "safe mode". The models and assumptions are assuming an "average", there is no pre-loading added to bias the sums in chorus's advantage. They are working with "average costs for all trenching/ cabling/ underground and aerial cable systems".
Im not sure just how well they are future proofing the network considering the potential for growth in traffic... movie/music streaming etc. The present very low level of fibre users is not an accurate indicator of how well the network structure will handle significant growth in user numbers (uptake) as well as very significant growth in "usage".
They are future proofing the network in the sense most of the UFB rollout is with underground ducting. If some new whiz-bang technology comes along the old fibre can be pulled out and the new whiz-bang tech can take its place. This all takes place without the need for a shovel to dig into the dirt.
Boop boop de do
Marilyn
Hi
My recollection is that Corning in the US have within the last 10mths invented a glass fiber line not much bigger than current that handles 10x data flow by clever electronic timers and bouncing the light from the walls of the fiber strands. Maybe chorus should be looking to this.
Keep in mind that commercial research statistics and science have "been for sale" for the past 2 decades. The sponsor of the work has certain expectations about the outcome. The organisation doing the work understands this, and also understands that future funding opportunities are linked to past performance references. Research companies are hired on past performance outcomes that benefit the prospective clients position. These things all introduce biases into research that favour the sponsors desired outcome of the work, therefore the research will almost always appear rosier/better for the sponsor than they are in reality.
I have worked in science for 25 years. Pure research has virtually vanished. Commercial research is the main source of funding. Take outcomes with a good dose of salt.......
Yes all good points
Things can change quickly when the big money gets excited.
All it took was the regulator to scale back their severe (and ill-informed) copper lines revenue-cap punishment ... to a moderate revenue punishment (cripes!). CNU has tested many investors patience this past year or so, or more accurately, government regulatory intervention blindsided investors, testing not only their patience, but even undermining the viability of core NZ telecommunications services and their development. Govt really should stay well away from price setting and picking winners.
Despite one's views on whether it is really the done thing for Govt to bring a business to market (govt privatises bringing TEL to market - conditions market to safe reliable earnings - then splits TEL into CNU & TEL (TEL rebrands to SPK)) then lets their regulator get a whiff and crucifies arguably the most conservative end of the share market investors - those who prefer safe stable earners, let alone putting at risk the rollout of UFB to citizens and businesses!? Despicable behaviour, ComCom should be ashamed of themselves.
This company has been a govt regulators 'whipping boy' and throughout the ordeal shown great resolve, outstanding professionalism, excellent leadership and unquestionable dedication to financial viability. Mr Ratcliffe, my hat is off to you, your management team, and all your staff. A more credible performance under intense and severe firepower is ... well, unprecedented, IMO, congratulations.
This chart is for you CNU, staff and management. I'm sure a few investors like it too.
Attachment 6566
ComCom further extends their reporting timeline to September 2015.
This certainly appears to be a very petty and cynical move, which will only exacerbate investor caution with regards to unnecessary regulator meddling.
ComCom must have very few other investigations to keep themselves ocupied, otherwise they would have closed this out in a timely manner.
I would strongly suggest that ComCom should devote their attention to the retail petrol cartel that clearly operates in New Zealand. This would have a very beneficial effect on the NZ economy, by reducing costs throughout the transport chain.
Continuing to pursue Chorus when the downstream telco's have shown that they do not intend to pass along the cost reduction to consumers smacks of illogic.
What a shambles this has turned into
I sold another 25% this week. I'm going to keep my remaining 29,000 shares until the bitter end.
It's been a while since I have been on sharetrader or been following CNU on the market, however I can share a bit of wisdom on these related posts/points - The infrastructure equipment is already capable of 1gigabit fibre links (and indeed 10gigabit fibre links in fact). Orcon have started moving some of their customers to a 200mbit trial service (for those already on 100mbit plans) for the same price/free upgrade due to the trial. The core infrastructure equipment (e.g. the routers, switching, cabinets, exchanges and fibre links) are already capable of more than the 100mbit plans most ISP's are offering, however (following is opinion not fact) they (chorus/ISP's) will not offer those plans residential until there is good UFB uptake and they can gauge the impact on current infrastructure, and also the international links e.g. southern cross cable.
For reference see page 29 of the fact sheet Agreement With Chorus provided by Crown Fibre Holdings re. the 1gigabit and 10gigabit plans available to enterprise/business customers (1gigabit being 1000mbit, and 10gbit being 10,000mbit)
http://www.crownfibre.govt.nz/media/...h%20chorus.pdf
Sold out today, at break even, sadly but thankful for that small mercy. Nice to be able to bolster some other reliable earners with the proceeds in the meantime. I'll be back in as soon as the divi's look certain again. Still can't quite get my head around why the government/comcom keep bashing the monopoly they created - and need for their glorious broadband future. No other company could do what CNU is doing, the government need to cease their tiresome policies of picking winners then bashing them into a pulp. Go CNU, we'll renew our relationship in due course.
BAA
So difficult to make decisions with cnu.
Like you the uncertainty as to dividend resuming has made me sell some over the last fortnight-only about a quarter of my holdings though.
as a margin lender I need dividends.
Have been buying CEN and Genesis-dividends aand a hot dry summer make them look attractive to me. Electricity demand also has increased against pundit predictions -in the last few months
A bit of interest today
Yes, thankfully. It would have been a bloodbath for me today if cnu hadn't come to the party.
http://www.nzherald.co.nz/entertainm...ectid=11394866
This has got to be good for the uptake of Fibre. Good quality HD content coming from three providers over the internet (Lightbox, Netflix, and Sky) will create huge demand for UFB. This year will be a tipping point.
Chorus is 7.5% of my portfolio. Would love it to be more but trying to be a good boy with my allocation and to be honest anything can happen with investments in New Zealand regulated industries, as every Chorus investor knows, so even 7.5% is probably too much.
52wk high.
cnu, spk and Hnz all at 52 week highs. Will make me feel chipper for the whole long weekend
Have updated my earlier CNU valuations to incorporate:
1) 14H2 report - though the actual figures were close to my guesses.
2) lower long term interest rates - fell by 0.5%
3) increased belief on my part that the fibre deployment will be popular and successful - so increased growth factor from 6% to 8%
4) ComCom decision halving the forecast fall in ebitda - was a 170m fall, now 80m.
Valuations
a) Graham (for 2015) - v = eps*(8.5+2g) = .25*24.5 = 6.13
'eps' is tricky because (if my forecast is right) it will dip in 2015 and 2016 then recover.
I chose 25c because if increased by 8% pa for four years, earnings become 31cps - my projected figure.
b) Dividend flow valuation: 4.13
I don't think this stock is overvalued at 2.85. The assets are high quality. The government is CNU's partner. The company is liquid.
I bought more at 2.55 recently.
Est growth 8.0% SP 2.85 14h1
14 fy a 15 fy 16 17 18 19 20 21 rev
535 1058 1018 978 998 1018 exp
206 409 400 400 400 400 ebitda
329 649 618 578 598 618 d+a
162 322 322 322 322 322 ebit
167 327 296 256 276 296 int 59 121 121 121 121 121 ebi 108 206 175 135 155 175 tax 30 58 52.5 40.5 46.5 52.5 npat 78 148 122.5 94.5 108.5 122.5 eps 0.20 0.37 0.31 0.24 0.27 0.31 0.33 0.36 0.39 pe 7.70 9.31 12.06 10.51 9.31 8.62 7.98 7.39 div gross
0.13 0.16 0.26 0.34 0.39 0.45 0.48 div net 0.00 0.09 0.12 0.19 0.25 0.28 0.32 0.35 Payout% 30% 50% 70% 80% 85% 90% 90% Gross yield 4.5% 5.8% 9.3% 11.9% 13.7% 15.7% 16.9%
Interesting but I hope we get a bigger dividend pay out for 2015/16, assuming the ComCom decision stands. Wouldn't we get some of the dividend that we missed out on from 2014?
Yes, probably early 2016. CNU isn't allowed to pay a dividend before 30 June this year as per the agreement with its lenders, I understand. This was in the hope that the mess would have been sorted by then.
For those anticipating a decision to return to dividend payments around June time, say for Sept payment, a reminder here that is unlikely with ComCom dithering until Sept, with no guarantee of that timeframe or the outcome, then Mar 2016 earliest. Another whole year. Sigh.
:sleep: