I would think a "sell contract" would be ample proof you have sold.
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I still think the cycle FPH is in atm is not a place for my funds(i sold some weeks back and posted that)). Future cashflows are being discounted and this comment puts it succinctly
"But in a high inflationary environment high PE stocks go down. The current dividend is too low to provide dividend support."
Same...although still considering them.
Attachment 13661
A "whopping" 2.19% gross yield inclusive of imputation credits though.
Here you go.....
Attachment 13662
Yes,,,I knew I had some more work to do.
Not sure I can get this over the line. Sadly,
Guru Mark from Craig’s points out that FPH, PEB and SKO were the three worst performing stocks in the NZX50 during March quarter.
FPH in good company
My opinion - First quarter of 2022 worldwide has seen just the very beginning of a reckoning process where high and no PE stocks have started to be reassessed. Plenty more highway to travel on that journey...
Is there a broken record playing in the background? once the groove gets too big in those things its best to use them as a Frisbee.
Media says AIR share price sank to 2 year low this week.
FPH saw a 2 year low as well
What a weird world we live in ....spooky
FPH share price combines a high P/E ratio with earnings that rely on high profit margins.... profit margin almost at record highs Not always a good place to be.
Can recent profit margins be sustained - indefinitely - to justify the high PE.
Question I'm pondering as I update my DCF valuation
Currently profit margin is in mid 20's. Not that many years ago it was in mid teens. Currently quite a lot above average over the last 10 years
Variances in profit margin makes a big difference to DCF outcome ..... so can high margins be sustained forever?
Good question ...
I guess high margins will stay high if demand stays up and the competition does not manage to catch up.
Normally though high margins are attracting competitors like dung attracts flies.
On the other hand ... medical supplies are a quite special game - easy to protect your margins with IPR's, so I guess it is everybody's best guess.
Good news however re demand ... even if Covid goes away (which is not a given) - as long as people exercise less and eat more bad food they will need more breathing support on the long road to the grave.
Margins are on the way up as revenues rise thus reducing the effect of fixed costs . Thats the biggest reason for NP margin were at record high of 26.6% last year mainly due to record revenues of $ 1.97 B ie UP 56% helping NP to $ 524 Mil UP 82% .
As long as they can grow revenues NP margins will be ok though will come under some INFLATION pressures .
Also we have seen from last 6 months results that growth in consumables results in better margins vs growth in hardware . After installing lots of new hardware recently now the main emphasis ahead is in its regular usage beyond just covid needs ...that should also help margins by more growth in consumables vs hardware
FPH is not a ordinary company as it has reached a iconic status on NZX with more then 14% weightage in index thus resulting in its own advantages to SP
Just like AIR ...FPH also has some sentiments and technicals associated with its SP which has been resulting in much inflated multiples in the recent past ie 2013 onwards ...more it grows in stature ...more extra multiples gets incorporated in its SP .
Your DCF value will not be attaching any such advantage of FPH and investor sentiments mainly institutions who always end up paying some premium for Quality , track record , liquidity and longer term aspect ...unlike retail investors who treat balance sheets on par value of all listed companies ..eg Retail investor will not distinguish between WHS / HGH / OCA / FPH ...they will just see it from mathematical angle ...while institutions will attach much higher weightage to FPH quality company vis a vis others .
So to get real market savvy DCF of each company we need to incorporate some premium / discounts for company quality / status too
Updated the ol DCF using the 2022 sales as the new base and using more realistic sales growth assumptions. The chart shows what I projected previously and what I am projecting now
The new DCF value is $16.84 ..... and alokdhir i've essentially listened to you and built in a pretty big premium by using a 8% discount rate. (at 10% discount the DCF value is $11.74)
Oh well, filled in the time between races and I know nobody will take this on board as its a load of the proverbial.
Lets keep this in our mind and see how market prices this in next 2-3 years . $ 17-18 is very possible on a bad day for FPH ...but will need two further big disappointing news ...So if market reprices 2023 earnings to say 55 cents and at 30 PE then it can reach your DCF levels . 2023 revenues need fall to $ 1.32 B levels for that to happen ie down 25 % from 2022 . PE of 30 even Mr B is not ascribing to FPH .
But can happen ...so will not rule it out fully . At $ 17 it should be worthwhile investment too to attract even W69 and Mr B into FPH . :t_up:
What terminal value did you use W69?
And how did you calculate it?
CHEERS
New Covid variant called. XE is mentioned by WHO ...says its 10% more transmissible then Omicron ....but as its combination of two types of Omicron versions so hopefully its not more dangerous . But they will keep circulating for ever ...giving some boost to FPH consumables like Flu etc ...revenues may not drop big time in 2023 ...its all so difficult to predict as its so virus dependent ...more luck then forecasts IMO :p
The proverbial hitting the fan today couta aye
Might be wiser to just wait until the downtrend reverses. 200EMA has crossed down through the 400EMA. This is a serious downtrend with few obvious technical price supports. A fundamental re-rate is occurring.
I've just bought some today, below the $24 mark. Good long term hold.
EBOS is another high PE stock that went through a rough patch - $28 only 12 months ago - but recovered and is now at record levels ($43). Not directly comparable but both FPH and EBOS are high quality stocks that over time do well (5 years ago FPH was $10). You need a long lens to investment in these type of stocks - short term dividend hunters need not apply.
I wonder who will get to $100sp first. FPH or EBOS. Hmm be pretty close over the next 5 years I reckon
Bit of useless info ....but interesting
On US markets low P/E stocks trounced high P/E stocks in the inflationary 1970s.
Highest PE stocks (top quartile) went up 25% in the 1970s ....lowest PE stocks (40% of market) went up more than 200%. the rest in the middle went up 100%/120% on average
Exactly.The shift to value stocks continues. The divi does not provide enough cushion to negate inflation, interest rates and future cashflows are being discounted.
Gotta watch the cycles you're in not just the stock.
And the trend as has been pointed out by Beagle and Moosie.General rule in prudent investing is buy on an uptrend not a down trend.
Check out KW's thread somewhere re when to buy a stock , it can be helpful tool re timing in and out; when the 60DMA has gone above the 180 dma, others use the re 30 dma over the 90-`100dma. Most of all DYOR and dont follow the cheerleaders. My opinion only , NOT a recco.
The old adage that it's time in the market, not timing the market, applies to high PE / high value stocks such as FPH. If you look at the long term graph of FPH it has outperformed the NZX by far. Even at current FPH levels you are looking at a 25% return over the last 5 years? I wouldn't baulk at buying more FPH is it dipped a bit further, but trying to predict the exact moment when you are buying something for 5 years more is a mugs game.
I had this dream last night that I was back in the family home that I grew up in. I was in the part of the house that formed a square with rooms on the outside and hallways on the inside.
I was in the hallways and in one of the rooms was this huge angry grizzly bear. It was hunting me. I was keeping an eye on it by peeking through a crack in the door next to the room the bear was in. I needed to escape the bear. I thought it a good opportunity to run to the other end of the hallway, open the door and make my escape.. so I went to the door. Once at the door I quietly opened it a crack and peeked through, luckily no bear. Just to be safe though, I thought I would double back to the other side of the hallway to be sure the bear was still in that room and wasnt instead making its way around the outside rooms to meet me....
The trouble is when I opened the other door to check the location of the bear it wasnt there. I suddenly realized I should never have taken my eye of the bear as it could be anywhere now. I started to panic and decided to double back and check the other side. However when I turned the huge bear was right there!!! It had snuck up on me and the bloody bear mauled me!!
Now this was a true dream and not that I believe in dreams meaning anything but is my FPH holding about to be mauled as it is very bearish right now. I took my eye off the TA just like I took my eye off the bear and now the bear has got me??? Im not sure if I can escape, Ive taken so much damage already :ohmy:
All here ...including the ones looking for further lows ..will agree that in longer term FPH will be much higher then current SP !
So does it matter if recent bottom is $ 18 or $ 22 when we all know it will be $ 50 in next 3-5 years time .
In trying to be very cheeky some may loose out on a great opportunity to get into a high quality company as well as business at pretty reasonable price compared to its historic valuations ...IMHO
But then some are much smarter stock pickers then me and they can time their entry much better then most including me . Also I acknowledge that presently FPH looking weak due to normalisation process of big Covid movements ...its big gains of 2021 is hurting SP at moment but eventually as shown in Josh's Video ...the current scenario of revenues and eps is higher then pre covid trends ...it showed that post covid CAGR will get a boost after it stabilises in 2023
Yeah its pretty well impossible being exact, its a mugs game.
Heres a legend saying the mkt is going crash and value stocks are where its at. Its bit long but int and USA specific.
37:11LiveUpcomingCalling a Super Bubble: Front Row With Jeremy GranthamBloomberg Markets and Finance1.6M views • 2 months agoBloomberg Markets and Finance • 1.6M views
Exactly. Buying on a dip is something we all do, but there's very few who can say, hand on heart, that they can time the exact moment to buy and sell. There are general rules about when the squiggly lines cross over, but that's all they are - general rules. As you say, FPH is in a better position now than that it was pre-covid, yet it's SP is nowhere near what it was back then. The ship is solid - it's just the seas that are rough. Smoother waters ahead I reckon.
Unless some people doubt the business and quality of company ...like ATM .
If business is good and its Moat is solid then FPH will regain its glory in next few years . They have world class hospital equipment ...their humidification technology is their biggest asset and they are acknowledged as world leaders in that .
They try to build all their future growth plans around this expertise of humidification ...latest is surgical use of warm humidified air for better recovery rates ...its still not very widely accepted as doctors dont see much advantage in 5% better healing rates ...but slowly it can be big revenue generator ...
Share price close $23.16 ....price not seen since Jan 2020... that's quite a while ago
hopefully I'll get my $18 'target' - if not lower
Bit spooky that both ATM and FPH have hit multi year lows
Winner() ; charts say 18 about the low on the underside of the slope since 2013.
FPH share price.
8/4/2012...............$2.16.........Today's sp is 10.72 times cost
9/4/2017................$9.65........Today's sp is 2.4 times cost.
11/4/2014...............$23.16...
Like so many on Sharetrader the trust I am a trustee of has held FPH more than 10 years.In fact I expect the trust will still be holding them in 10 years time.We hang onto our winners.
Does not matter should Ebos beat FPH to $100 as the trust holds them too.
Interest Rates go up
FPH goes down,wrong cycle to be in high pe stocks,future cash flows being discounted.
The bear has got me. Almost dead
Salt say FPH is now "relatively attractive". Must mean something, but then at the same time it's one of the largest underweights in another one of their funds.
Fundies eh :confused:
I wonder how much pricing power FPH have? Any thoughts on that?
Bear have got this thread too ....FPH in Bear hug ....:cool:
Phew ---- after 5 down days in a row it looks like today is going to be an UP day
Fisher & Paykel Healthcare announces 2022 Investor Day - NZX, New Zealand’s Exchange
25th of May for the results. Investor day 26th of May, with optional site tour (that would be fairly interesting).
Imagine they'd have good saussie rolls too! :p
Looks oversold on the chart
(lol dont listen to me thou. I am only starting to get to understand this fandangled technical analysis)
Will be interesting to see how low the SP can go on this current downtrend. May be more of a downtrend than we might have thought coming off the back of a stabilising Covid world. Obviously rallied firmly amongst covid, but the recourse is now falling equally as hard without the support. We would think surely it will find enough support build and remain above $20! Her to see substantial buy interest yet though. We can only hope targets are set to mount bids once (if) touches $20.5 - $21.5? If breaks through below $20 we might all be in trouble.
Looks pretty stable around current price and a lot of negative has now been baked in IMO but if you look 3-5 yrs ahead it doesn't really matter what the market does short term, a quality company selling much needed products worldwide with clearly outlined expansion plans is what you need to focus on.
Close 22.26
Low for the day - some say closing on a low not good for the next trading day
And lowest for some time
Me still watching and waiting
Well those who bought as long term 10 years ago, paid $2.20 on 24/4/2012.
Also enjoyed dividends as well.
Current dividend of 39 cps gives a yield of 8.58% on cost.
And current share price is 10 times what it was 10 years ago.
"Not a lot of people who do not own FPH shares know that."...lol
I think its more prudent to wait for the next uptrend whenever that might be. Its dropped ~ $12 in the last 6 months who's to say it won't drop another $12 ? Stocks all around the world that benefited from the strong tailwinds of Covid are getting absolutly smashed as those tailwinds abate. Good example was Netflix which announced this morning. They could do nothing wrong during the height of Covid but are down 42% year to date and another whopping 22% just this morning after they reported a disappointing result and weak outlook. Catching falling knives is something I leave to others because I like all my paws intact lol
Balance is almost always right that downgrades come in three's and when he's wrong its usually because the downgrades came in four stages.
Long term holders can point to their long term gains and that's fine. I hope that gives them comfort as they continue to see those gains eroded away at considerable pace. Your long term returns will be vastly better if you buy in at close to the bottom in a new uptrend.
When did FPH actually downgrade guidance they provided?
Lol the negative non holder bleating is back, the same message over and over, as if we didn't hear it after a half a dozen times.
http://nzx-prod-s7fsd7f98s.s3-websit...295/367199.pdf
23 March 2022. Market took it as a disappointment / downgrade.
Price down from $25.70 the day before that announcement to just $22.26 yesterday, a decline of 13.4% in less than a month.
When percy bought 10 years ago at $2.20 FPH were on track to an EPS of 12.2 cents --- a PE of 18. Today the PE is 34 on forecast F22 earnings
Just shows when you buy on modest PEs ones long term returns are far superior than buying at elevated PEs
If FPH was still on a PE of 18 its share price today would be about $11.50 ..... so the other $10.76 is what all the excited punters have added to the share price. And Percy and others have cashed in on this excitment (to the tune of 10 bucks a share) - well done to them.
The PFH share price has increased by $20 since Percy bought 10 years ago - about $9.24 has come from FPH performance (increased earnings) and the other $10.76 come from market excitment / hype
Back to today - remember superior long term returns generally result from buying at reasonable prices (Beagle has a term for that) ..... buy at elevated prices and long term returns are more subdued (sometimes negative)
So today we appear to have a few waiting for that reasonable price to happen (and get long term returns) and we have a few long term holders hanging in there and hoping that their long term returns don't dissipate too much more .
It was a nice ride that was for sure.
Also to be noted here ...When Percy bought at PE of 18 at that time FPH was not yet a Bluechip or proven company ...just had good pedigree and needed to prove itself with Consistent growth and establishing its Moat and credibility etc
Its not as simple as u are making out to be ...some PE expansion happens due to rise in status of the company . It was not No 1 company on NZX by market cap thus biggest index holding etc ...didnt have this kind of liquidity which instos need for their safety or mandate etc .
Also in last 10 years rates went so much south too ...now also long term trend of rates is down only as this kind of debt world over will always not let rates go too far up ...unless Govts world over will go bankrupt .
Expansion of 18 PE to average 35 PE happened for various reasons ...but I agree getting into future bluechip companies early helps in future returns ...as mature bluechips always command higher PEs
Now lets do brainstorming about future bluechips of NZX ...HGH , OCA , WHS or SKT ???
Yes good post W69. Some guru did this calculation on a podcast I listened to a few months back but on the S&P500. Largest portion of the gains over 20 years was multiple expansion. Then margin increase then sales increase. I bet the same for NZX50.
So best approach is to find great companies early (easier said than done) and ride the multiple expansion. Then sell down at the top (easier said than done) and re-entre when the multiple contracts.
Or
Find great companies and hold forever (easy) and ride the multiple expansion up and down.. up and down
So long term investors have made more from multiple expansion than from eps growth. The issue I have with long term investors skiting about their returns and talking up the long term prospects is they never objectively point out that their returns were mostly predicated upon multiple expansion and if PE's normalize back to where they were 10 years ago, (could easily happen with ongoing interest rate increases), the last decade's returns from multiple expansion could go into reverse and even though the company is still growing shareholders could easily find the shares going nowhere, perhaps for as long as a decade. (RYM the perfect example...was about where it is now, 8 years ago).
8 years ago people were talking up RYM that you couldn't go wrong holding long term...I remember one former poster claiming it would be $30+ by now.
My contention is simple. There is no greater way to ensure that at very best, you just get an NZX50 return, (at worst years of serious market underperformance), than to buy a bunch of market darlings at hugely elevated multiples. The risks with rapidly rising interest rates to stocks on elevated multiples should be crystal clear to anyone who understands the investment basics.
[QUOTE=
So best approach is to find great companies early (easier said than done) and ride the multiple expansion. Then sell down at the top (easier said than done) and re-entre when the multiple contracts.
Or
Find great companies and hold forever (easy) and ride the multiple expansion up and down.. up and down[/QUOTE]
Doing a lot of research you can find great companies.
My own approach is to do my research,buy a modest holding,and should the company does as it says it will do, buy more.
If I have it wrong I sell straight away, no matter what I paid for the share.
Should I become grossly overweighted,or a share runs higher than I expected, I will take some off the top.
That money is then recycled into the next great company.
Never be afraid of making a mistake.Just front up to it straight away.
However if your thesis is correct ,back yourself.
Long term STders will well remember the rubbish I had to put up with when I backed HGH and TRA a few years ago..
Tend to agree. Even at the recently declined share price sitting at $22, when based off P/E it appears many longer term investors are willing to pay a considerable premium indicating that they are expecting proportionally considerable earnings growth in the future. We all know a share price cant solely be based off P/E though. However it does indicate a price premium, growth expectation. That might not be there at this level in todays economic world. But who has a crystal ball, maybe there will always be enough investors who bet and buy on the growth in earnings. (In some ways similar to how pongee schemes work, as long as money continually flows in then share prices (for most solid stable companies) continually go up (in the long term historically). Will the next 10 years be the same overall trend, who knows. Is FPH 'worth' $22/share, when based simply off its current position then no, so the unknown is always the future earnings, that is where different investors see different value in a stock. Taking out all the Covid bubble, the SP was on a longer term (albeit slower) uptrend. Putting it around the low $20's, which is where it has come back down to now. Unless the potential earnings growth has somehow magically disappeared, or that investors don't feel it will be there, then the share price should remain at this level. Unlikely to drop into the 'teens'. However the difference which is creating an anomaly now is factoring in much higher inflation over the next period. If FPH SP stabilises in the low $20's and does not keep up with relative inflation then effectively the SP would be declining still.
Basically new investors should consider some of the following, is FPH a solid company, is it going anywhere. Do you believe in it's growth and earning potential. Is this reflective in its current share price and are you willing to pay that multiple of it's revenue. Hence Beagles GARP assessment strategy. P/E was previously sitting around 25, however Winner has mentioned above that the P/E is now 34 based on F22 at current SP, which is considerably higher than industry average, which would indicate the shares are over priced if his P/E calculation is accurate.
I'm yet to understand why someone would go on and on about any company they don't own, once you've made your point then go and talk about something you actually own and are passionate about or find more hobbies. Yes Percy I remember clearly the disgraceful behaviour you had to put up with back then and we don't want a repeat.
Some good posts on this thread today.
Beagle talking about a lost decade.. it happened to another great company- Microsoft. After the dot com bubble the SP dropped 40% and then did nothing for 10 years as its earnings growth slowly ate away at its lofty peak P/E of 60.
But if you were a long term investor in Microsoft and bought at the very peak of the dot com bubble and held for 22 years until today you would still have a 400% total return (higher than the S&P 500). If you bought after the dot com bubble and held through the zero movement lost decade all the way until today you would have a 900% return. Pretty good!
Back to FPH. Those that bought at recent highs all good... you may just have to settle for a 400% return over the next couple of decades. And those buying now and around the new lows in the months to come.. it could be very lucrative in the long run.
(This all excludes dividends which is just a bonus for holding)
I got a bundle of Restaurant Brands at about 70 cents 13 years ago .... I see they are now $13.25 .... bugger it they hit $16 not that long ago so down the gurgler a bit since then ....common sense sid I should have considered seling but I have an emotional attachment to my RBD shares
Never worried about them .... at times need to remind myself I've still got them
Wouldn't buy them today at $13 though .... over valued ...... superior long term returns have been made.,,,,, hot so good now
Suppose I'll hold for another 13 years
And I think they've paid pretty good dividends over the years as well
RBD almost a blue chip ;)
Not random stock examples, broad index's.
Stretched valuations and affects on subsequent returns.
The Nasdaq peaked in the dot com bubble in 1999 at just under 8000 and is around 14,000 today, a return of just 75% in 23 years.
Cheap valuations and subsequent returns
By way of contrast, using a strategy of buying cheap the S&P 500 bottomed in the late 600's in March 2009 at the height of the GFC and is about 4500 now, nearly 600% in just 13 years.
This got me interested.
Had a poke around the old TRA and HGh posts - very enlightening. Percy (& others) were certainly bang on about those companies early and attacked for it. Which is sort of interesting to a newish member of this forum as I wasnt aware of percy’s early excellent spotting on those companies & his modesty those successful calls. With such a base of adoring shareholders filling both those forums one would be forgiven in thinking its always been that way - but reading through past comments - yikes
Well she's on a roll today, im off to shave the dog down and give him a wash.
Mind you there were a few who a few years ago (2017) warned that Turners share price approaching $4 was ridiculous .... they were proved right as the share price fell to the 220's to the dismay and pain of many loyal shareholders
One of those 'warned' back then is now one of Turners greatest advocates
Jeez Turners nearly 4 bucks in 2017 .....only about that now .... but buying in the 220's been really good
"didnt have this kind of liquidity which instos need for their safety or mandate etc"
had huge liquidity for a period of time and that produced some big profits.
Percy does very thorough research and from all accounts he has done very well with his picks. He is a quiet achiever who never blows his own trumpet nor puts others down. I have the greatest respect for our Percy, He comes across as a really decent modest man to me :)
Jeez Netflix just wiped out all of its gains going back to February 2018.
Obviously not a blue chip ….but shows when things turn anything can happen
Wish you had not asked me.
Sorry a number of answers coming up.
For the trust I help out on we are neither a buyer or seller.Core portfolio stock.
If I were buying on my on account I would sit.Old saying sell in May and go away.May is only 10 or 11 days away.Often share prices weaken for a few months.
I would actually be watching the chart.Currently it looks "horrible".Very weak.I use Yahoo Finance charts.I would wait until it turns around and new uptrend starts,even if it means paying a bit higher price.
I have often bought companies such as FPH and Ebos when I have made a good surprise profit,ie a spec comes home,or a company i hold has been taken over,and I am looking to invest in a quality.
This is because I have never known either to be cheap.Quality you have to pay for,and both FPH and EBO are top quality.
I am an retired book seller.If you want sound advice I would ask a sharebroker at either Craigs or Jardens.
Seems percy and beagle have been comparing notes
Percy says: If I were buying on my on account I would sit…….I would actually be watching the chart.Currently it looks "horrible".Very weak……….I would wait until it turns around and new uptrend starts,even if it means paying a bit higher price.
Beagle (and others) saying much the same …..and get castigated for saying so
Me …waiting for $16/$18 - the value future cash flows point to reasonable longbterm return
Completely different animals though, momentum trader vs long term investor. Good thing is for those of us with entry points higher than current price with a long term mindset we can forget about the chart just like with PAZ and OCA, the squiggly worm has no insight 3-5 yrs from now.