Question: ‘Lewis, why has the FPH share price almost halved over the last 18 months?’
Lewis: ‘Ask those who buy and sell our shares. We have no control over the price of our shares, the market does that’
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Question: ‘Lewis, why has the FPH share price almost halved over the last 18 months?’
Lewis: ‘Ask those who buy and sell our shares. We have no control over the price of our shares, the market does that’
Nothing personal but I don't get what you and many others can't understand...
1. The share price got overhyped in 2020
2. Profits were magnified by covid above the longer term sustainable growth rate
3. Many "investors" failed to understand point 2 above and overpaid
4. interest rates are now rising and high PE growth stocks like FPH get hurt by that
5. points 1-4 explain the share price the last 6-12 months
6. FPH is still a great company despite the share price performance the past 6-12 months.
I rang the alarm bell in January at $28 as did many others.
Like a lot of Covid assisted stocks the bubble is in the process of bursting, certainly not fully burst yet. In the US stocks like Peleton which could do no wrong in the midst of the worst of Covid have lost a whopping 90% of their value, Netflix 70%...dozens of cases of Covid assisted companies in the US now trading at less than half their previous peak prices.
No reason FPH is or should be exempt from this. https://www.marketscreener.com/quote...30/financials/
It's still on a whopping 36 times average FY23 earnings which fundamentally with 10 year Govt stock at close to 4% is still super expensive in my book.
That and a very low yield of just 2% mean those metrics are certainly not attractive and from a TA perspective "Blind Freddy" can see this is in a steep and well entrenched decline.
I think anyone would be very "brave" indeed to apply fresh capital until there is genuine evidence from a TA perspective a new bottom has been reached.
I still think $15 is a very real chance which would be a forward PE of about 25. I know its a very high caliber company but that doesn't make it exempt to the reality that DCF valuations are being seriously affected by much higher interest rates.
Just as well the $N.Z. dollar has fallen hard as otherwise this would have fallen even harder in my opinion.
Disc: No position long or short.
You can live without Netflix and Peleton equipment but not without oxygen for those that find themselves in the situation to need it, world population expanding and more and more people needing these products means a very prosperous future for this company, plenty more viral outbreaks to come in the future as well, short term "White Noise" is not the way to view FPH, thats just a traders perspective.
Not true, I can't live without Netflix LOL.
I get all that, and I actually agree that at current levels FPH is undervalued. But my point stands that the Board needs to be a bit more vocal. The current negative environment notwithstanding, the fact remains that the company is in better shape now than it has ever been, yet the SP has been punished far more than other blue chip companies.
When Covid hit in early 2020 the SP was $24. NI for that year was 209m. We are now at $21 (and projected to fall further) when profit for the first half was 222m. Profits between those period were doubled. So given all that - EBIT, EPS, NP all still considerably higher than before covid, and likely to remain elevated for some time yet, why would the share price be well below that of the pre-covid price? Answers on a back of an envelope - send to Chief Communications Officer, FPH.
Quite the contrary, I think there's a perfectly rational revaluation of the company going on here.
Take care out there folks when buying in a steep and confirmed downtrend, the trend is definitly not your friend https://www.bing.com/images/search?v...t=0&ajaxserp=0
[QUOTE=Beagle;956451]Quite the contrary, I think there's a perfectly rational revaluation of the company going on here.
Take care out there folks when buying in a steep and confirmed downtrend, the trend is definitly not your friend
Nope, disagree. Nothing rational about the revaluation if that's what it is. Either the SP was overvalued pre-covid at $24 or it's undervalued post covid at $21. Since all the fundamentals are way better now than then, I tend to believe the latter. But Couta is is right - no point in chasing shadows - the SP is what it is.