Sheepishly ... oops
a small slip of the cerebrum, thinking freightways writing Mainfreight.
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Sheepishly ... oops
a small slip of the cerebrum, thinking freightways writing Mainfreight.
Volume of freight set to double
Monday July 3, 2006
By Jenny Keown
Freight volumes are expected to double over the next 15 years, with road transport tipped to pick up the lion's share of the increase, a report says.
The main lobby group for trucking - the Road Transport Forum - commissioned Transport Engineering Research New Zealand to look into how freight would grow and what share would be carried by rail or road.
The report projects that over the next 15 years freight volumes will double to 230 million tonnes, based on the economy growing at an average of 3.5 per cent a year.
The report forecasts the trucking sector to be the main winner - it is picked to carry about 80 per cent of freight by 2020, or 184 million tonnes a year. Rail will carry about 46 million.
Road Transport Forum chief executive Tony Friedlander said: "Rail could play a significant and potentially increased role in handling this freight task, but it is no substitute for an efficient, reliable and safe road transport service."
The research was important to help understand future freight needs, transport policy decisions and investments, Friedlander said.
But Toll New Zealand reacted with scepticism to the report.
Company spokeswoman Sue Foley said it was nonsense to suggest rail could not handle a big increase in volume.
"The rail infrastructure is there, it just needs long-term investment and then we can handle the capacity."
Foley cited the huge uptake in volume on the Waitoa line, reopened in 2005 after 14 years, to carry dairy freight from Morrinsville to Fonterra's Te Rapa dry store facility as one example.
Fonterra expected to move 600,000 tonnes of dairy a year through Te Rapa, and Toll was hoping to carry a large portion of that, she said.
The report said Te Rapa might be able to make a significant difference to how freight was transported in and out of the region but it required long-term contracts and significant investment by Toll and Fonterra to ensure its success.
Friedlander said the report's findings were based on population growth, dairy, manufacturing and freight to the ports.
It expected freight growth to be highest in Auckland, Bay of Plenty, Waikato and Christchurch.
The report noted that one of the main challenges was the lack of information about freight volumes and volume share on road and rail. There also needed to be more research on freight in the regions.
The share price is quietly getting on the business of maintaining the uptrend.
$6.05 [8D]
Phaedr can you please posted a chart on MFT lately current market price look like it is going under the trendline any time and the market price is over the forba valuation which is 5.70
Good grief lucky, are you sure you're looking at mft? It seems scarily terrific to me!
Still, a good idea to keep a close eye.
What valuation did ForBar have on Feltex[?]
Seriously though, it depends a little on perspective. I've never managed to get a confirmed trendline on MFT, which makes it a little speculative, but this is a stock that is not stressing me in the least.
Taking a slightly long-term look, I've plotted MFT here on a log scale (as that is more appropriate for such spectacular price growth). As you can see, in the long term, it is above both a tentative trendline and moving average that have seen some holders well over double their investments.
You will also notice a second set of lines on the recent price action. This is an ascending triangle, a formation that has a likely UPSIDE breakout.
http://img.photobucket.com/albums/v3...mft21aug06.gif
However, if you plot MFT over a shorter time period on a linear axis, then you could have some mild concern. However, it *still* looks like an ascending triangle. I think the most likely scenario is that MFT will break through 6.10, but there is some chance that it might retreat back toward 5.50, but I don't think that will concern long term holders of this stock.
http://img.photobucket.com/albums/v3...t21aug06_b.gif
Chickens. Hatching. Must. Resist. Urge.
Done a bit of revision and my current thinking is that NPATA for 2007 will be about 40cps which is about 15% growth. I believe that growth is sustainable moving towards 2008.Quote:
quote:Originally posted by Paper Tiger
Yes k1w1, you have done rather well in the few months you have been aboard.
The question is where to after this slendid rise?
Although my figures are notoriously inacurrate and subject to rapid restatement I will go on the record that I believe the full year for 05-06 will be:
NPAT $27m
NPATA $32.5m
and that a share price of $4.64 is my mid-point for the value of MFT at the end of this month.
A year out I hope NPATA will be $37.3, representing 15% growth, and the SP around $5.40.
Still happy and though I think the spectacular growth in SP of the last three years is coming to an end, I do not see it slouching around either.
So pick your P/E and determine your price, personally I think that this would be trading at a fair value today of $5.51 rising to $6.00 (P/E = 15) for the end of the financial year.
The market has been more enthusiastic than me about MFT and I am the MFT fanatic around here.
I have not actually bought any MFT for ages, I loaded up big time a while ago at an average buy of $1.92 and the damn thing has grown so fast that it keeps going overweight in my long-term porfolio :(.
Anyway fundamentally Mainfreight will continue to grow and improve it financial profits, technically it is still in favour.
I have not actually bought any MFT for ages, I loaded up big time a while ago at an average buy of $1.92 and the damn thing has grown so fast that it keeps going overweight in my long-term porfolio :(.
Anyway fundamentally Mainfreight will continue to grow and improve it financial profits, technically it is still in favour.
[/quote]
Apparently just like Fisher funds. FF Last bought late 2004 and sold back a bit during 2005. No ramping by FF then? ;) Thanks for the analysis PT [^]
TT
I have never sold a single MFT share from the long-term portfolio (why sell something while you believe that it has a good future?) and have tried to balance it up by buying other shares. However it still makes up more than up a third of the portfolio.
Glad to hear that you have confidence in MFT. I agree entirely with that principle above. A mere slip of the monkey's tongue to say you were just like FF! [:I] I mean't you bought at the same price/time. Shame they sold even 2% foregoing a much greater profit.Quote:
quote:Originally posted by Paper Tiger
I have never sold a single MFT share from the long-term portfolio (why sell something while you believe that it has a good future?) and have tried to balance it up by buying other shares. However it still makes up more than up a third of the portfolio.
I take from this that you have a trading portfolio as well. Do you do better or worse to trade rather than invest in general terms or is that too difficult to easily assess?
How do you decide exactly when to get out of an investment. I presume you have to have a better alternative lined up as well. With a third invested in one share you must watch it closely. Do you use a trailing stop, moving average and how do you decide? I have seen many different % trailing stops and moving day averages used. Or is fundamental value as important? Is there a principle based on volatility. It would be most helpful for us novices if you could give us some of your experience.
Thanks in advance.
Up again today I see. :)
TT
Oh no, not another new all time high today. ;)
Trading well above my valuation, so either me or the market is wrong. :)
Disc: MFT
Yes. Having resisted the urge to count my chickens before they hatched, it would appear that we did in fact have a nice upside breakout from the ascending triangle.:)
Disc: MFT
Down to $6.46, I hope it is not because of something I saidQuote:
quote:Originally posted by Paper Tiger
Oh no, not another new all time high today. ;)
Trading well above my valuation, so either me or the market is wrong. :)
Disc: MFT
Disc: I get a virtual can of tuna fish for every click on the link :)
Mainfreight continues to truck (;)) along nicely. Technically all the indicators are nice and positive. But I find the strength rather surprising and I notice that whilst a number of brokers have upped their full year forecasts some have down graded their buy to hold and there is even one sell [:0].
Wonder what use MFT are going to make of the Hirepool sale proceeds?
Disc: hold MFT and have no intention of selling.
Half year is out [:p]
This is a very good result from continued operations and better than I expected.
Very nice of them to do a 28cps special dividend from the Hirepool sale proceeds, now that is a real surprise.
Up to $7.85 !!!
Although the Mainfreight share price has been going sideways, ignoring that very nice 35c divvy [:p], for a couple of months now I thing that I can safely say that technically it is still looking good.
Still looks over-priced to me, but I am willing to go with the flow for a while yet.
And ... nearly another four weeks of going sideways, but i suspect it may kick back to life soon.
today's close of 800 has been a resistance level since December, so it may become a support level.
The bollies are also starting to diverge, the macd is looking positive, the rsi's climbed and is now steady.
Parabolic stop and reverse has given the green light, and the 20- and 50-day moving averages look about to cross.
The on-balance-volume has steadily risen over the last three weeks, but is looking a bit soft over the last two days.
if one wanted to draw (dot-in in faint pencil) a downtrend from early december's peak, one could see that this faint and far-fetched downtrend has been broken.
anyway, scamper's waiting to pounce.... cheers.
Well! I never saw that coming!
i suppose if i had been more awake i would've known that results were due...
anyway, it has amply demonstrated that technical analysis can be thoroughly gazumphed by news of fundamental details.
silly-faced puppy.
Or alternately that you should be a little cautious with thinly traded stocks. Today's "plunge" is on a volume that is miniscule even for this stock. I could personally have triggered a 3% plunge with my laughable holding.Quote:
quote:Originally posted by scamper
anyway, it has amply demonstrated that technical analysis can be thoroughly gazumphed by news of fundamental details.
MFT has been trading in a very tight range for some time now (I wouldn't call it a downtrend). Technically, when a share "gaps" up, you expect that to be an area of expected support, and it has not dropped through that yet.
http://img.photobucket.com/albums/v3...mft22feb07.gif
And looking more long term, there's still a rising OBV, and today's price movement is volatile for the last 6 months, but not compared to other blips in its meteoric rise.
http://img.photobucket.com/albums/v3...ft22feb07b.gif
I have no idea if it is over-priced, but I see no reason to believe that the dream has ended yet.
Excellent analysis Limegreen,it's always good to keep the medium to longterm perspective in mind,and bear in mind the overseas expansion with this stock,they are actively looking for medium size acquisitions,especially in the states.
The offshore profitability is improving,this stock will continue to surprise I'm sure.:D
Not a holder though but have been watching to see whether it broke through resistance.
MFT has always been a little difficult to track with trendlines over the longer term. What is clear, is that it continues to make higher highs and higher lows. The current price drop may well just be a higher low, to be followed by a new high in a few months.
Mainfreight Announces Divestment
It works for me :)
A very satisfacotory result [^][^]
MFT
30/05/2007
FLLYR
REL: 0850 HRS Mainfreight Limited
FLLYR: MFT: Mainfreight Preliminary Announcement Full Year March 2007
MAINFREIGHT GROUP LIMITED
Financial result for the twelve months ended March 2007 (Unaudited)
The Mainfreight Group is pleased to report another record net surplus after taxation before abnormals of $36.4 million for the twelve months of the 2007 financial year. This represents a $7.4 million, or 25% increase when compared to the same period last year.
A further $19.2 million of abnormal gains is added to our net surplus as previously discussed, bringing total net surplus for the year to $55.6 million.
Consolidated revenues (sales) increased to $968 million from $887 million; an increase of $81 million. Excluding foreign exchange this is an increase of 5.5%.
This is a very satisfactory performance, where all divisions in all countries contributed positively to the result.
Our global interests have performed exceptionally well, particularly
Australia and the United States. In both markets this performance will continue to strengthen as we develop market share across the supply chain.
While trading conditions in New Zealand were challenging, we have been able to improve on our last year's performance and are confident of continuing to do so.
In this past year we have been able to achieve good organic growth as well as divesting our interests in four businesses, three subsequent to balance date, which has allowed us to considerably strengthen our balance sheet, pay increased dividends to shareholders, and position ourselves for substantial future growth, assisted in the short-term by acquisition.
Net surplus earnings before abnormals from outside of New Zealand now exceed 54% of our group total, and will continue to grow in significance.
Divisional Performance
New Zealand
Trading conditions in the New Zealand economy were certainly more difficult in the past six months, where domestic freight volumes were markedly decreased and export volumes diminished on the back of the New Zealand currency appreciation.
Our Domestic contributions are satisfactory in light of trading conditions, where EBIT improved 5% on static revenue growth.
The benefits of the Owens and Mainfreight International merger and increased improvement in LEP performance saw EBIT improve 43% to $3.8 million on revenue growth of 3%. Post year end "Owens" has been removed from the brand.
In our domestic operations we continue to build our range of service
offerings utilizing the intensity of our network and warehousing capability. These will provide further opportunities for us to grow our business, increasing the range of services for our customers across the supply chain.
With our International business, our focus continues on growth in our import products and airfreight capability. This directly reflects the changing New Zealand trade patterns. Our regional presence has been strengthened and we expect to open two new branches in Hamilton and Dunedin.
During the year we significantly increased our airfreight growth in both perishable and dry products further enhancing our number one IATA ranking.
Australia
Our growth and presence in Australia continues to rise. Domestically our operations maintained their momentum of the past year, with EBIT improving in excess of 137% to $9.9 million, on a revenue increase of 25%.
In our international divisions our overall result was dampened by the lumpy performance of the projects division, Pan Orient. However EBIT still improved to $13.9 million, up 8% on a revenue increase of 11% to $309 million.
Of greater significance was the performance of Mainfreight International where EBIT improved 34% to $6.1 million and revenues increased 11% to $140 million.
Domestically, our high quality, next day transport services in the express freight market continue to attract customers. We have established a very
The market seem to react positively on the result announced this morning~ perhaps its time to break the side-tracking trend~
By the way, the 25% increase in profit is before the abnormals. If we include the abnormals, their net profit is a gain of 91% [:0]:D
After having a look at the provisional accounts for last year I think that the normalised NPATA is 43.5cps, which was ahead of my expectations.
I can see no reason to consider selling any yet. :)
Arrived back in the nearest thing Australia has to civilisation (i.e Melbourne) today to find the Mainfreight annual report waiting for me.
If you are an existing shareholder then presumably you have read it and are suitably encouraged.
However if you are NOT an existing shareholder, Why not?
You can download the report here and I suggest it is well worth your monthly data allowance to do so.
Whilst I can give you no guarantee as to the future (but then who can?) I have, over the years, come to appreciate that Mainfreight is one of the few companies who tells it like it is and is definitely focussed on the long-term.
You will realise from the research you undertake after reading the above report that the current high value of the dollar is beneficial to the company from a short-term acquisitions and a future earnings point of view (if you accept the wisdom that the NZ dollar is overvalued)
So if your timeframe extends beyond the end of the year you do need to consider Mainfreight as a medium and long term investment.
On the assumption that they will meet their targets at the long end of Don's statement then you may consider the current SP a little high but I believe you want to put or keep this on the watchlist.
If you want a TA perspective then ask Phaedrus
regards
Paper Tiger
Disc: Lots and not a seller.
gosh PT!
strong talk after a crappy 6 months, but was very grateful for the short version -- still in a rainy french summer. cheers, Scamper
Gee, thanks P! rainy french summer just got rainier. and tomorrow am off for a full-day tour of WW1 trenches in the Somme. [B)]
rethinking the wisdom of these 3-month absences is made easier by a haunting sense of fiscal responsibility... cheers!
Hi Phaedrus
The OBV shows a strange leap or two in May on my free charting program Big Charts. I wondered what you think that meant in this context. Big investor getting in in a downtrend low hoping it was the bottom?
Hi TT, The jumps in OBV that you noticed mark significant buying activity and as such can only be viewed as Bullish. To put these 2 days into perspective, consider this :- The average MFT daily volume is around 120,000. The first atypical step you noticed was of 3.4 million, the second 2.7 million. These were no ordinary "high volume" days and these are not buyers of our calibre, TT. A "Big investor getting in in a downtrend low hoping it was the bottom?" Maybe - we will never know their thoughts. Another view might be "Big investors with insider knowlege buying up large". Some say "Jumps in OBV should be ignored." Not me though!
The MFT OBV did not stop rising when the uptrend ended. This means that it was and is still being accumulated. If MFT had reached the highest value that insiders knew it was worth, they would be selling down, distributing their holdings to smaller players that know a lot less. This is not happening here. Technical conclusion? MFT has further to run and the current downtrend should be monitored closely with a view to buying back in.
Thanks again Phaedrus for an informative reply. [^] Will be watching. I had an order in the day that big jump occurred and missed by a whisker.
Thank you, Master Phaedrus [^]
I am holding and with a view to bag some more~
Waiting for lcr@nzx.com to send me a copy of todays speeches from the AGM. I can not find them on the MFT website either.
Anyway today the announce that they have nearly bought one and maybe it will be three US freight forwarders as part of their plan for world domination.
Doing the right stuff, day after day for year after year.
Agree PT.
An example to others on how to do it right.
Proud to be a shareholder is this one.
Also good to see Bruce Plested taking a pot shot at the Govt....."A growing bureaucracy at local and national levels [is] feeding off valuable GDP growth and slowing our ability to react quickly and efficiently to world markets..."
Unfortunately, I think his statements will fall on deaf ears.It has for the past 7 years or so.
PT
Us praising MFT's this morning must have put a hex on it ..down 18c
:):):):(
From my somewhat basic fundamental analysis of this company, MFT look like good value based on their long term prospects and strong history. I recnetly bought my first MFT shares and plan to buy more.
I notice that of late the share price has been dropping and would very much appreciate a view from the more experienced as to whether there is anything behind this.
My thoughts are:
1) An increase in exchange rate again resulting in a decrease.
2) Soem news that is about to surface (or that I have missed) - I read into an announcement today that their CFO Tim Williams is selling shares (245k down to 200k units). I'm new to this so maybe I'm interpreting this incorrectly.
any replies much aprpeciated.
Cheers
GT
Over the last week the share price has been dropping so I have bought my first shares in MFT. They are have dropped further and . Coud
the chart for mft is all gloom at the moment. as a TA person i would recomment staying well away. it has just broken its 3-year up trend.
there is hot debate at times on this forum about analysis of fundamentals vs technicals (charts of share price behaviour). both have their times in the sun.
but if, as you suspect, the fundamentals are good, FA lets you into this share too soon.
as i already mentioned, TA would have you standing well away from this. cheers.
Welcome Gravy Train to the forum.
Scamper has said it TA wise ...this is not a good time to buy MFT at the moment, even though it had a upward flutter today.
Fundamental Analysis using PE Ratios .... a quick glance MFT looks good e.g PE Ratio 11.6 (11 is considered reasonably low compared to the market average and comparing MFT with FRE which as a PE 19 and both in the same business one would consider MFT as good buying....however looks are deceiving.
Each company has its own natural PE range (the Norm) and that PE Norm only changes if the company changes structurally/management wise...or for some other reason it gets re rated by the investment market.
MFT has had a good stable PE for many years. In 2005-06 and 2006-07 there was an abnormal growth surge, espec 2005-06 where the growth nearly doubled. With companies that have large growth rates i.e 100% a PE value of 50 is seen as not unreasonable, Rakon (RAK) is a good example of that.
Now MFT at the present day.. it's growth has slowed back to nearly its "norm" so we now expect its PE values to come down back it their "norms" as well
To get what is the PE norm for MFT we go to its history
Year ending 31 March 1996 PE 9.5
1997 9.6
1998 7.9 (depressed shareprice due to Asian crisis.. time to buy!!!!)
1999 9.0
2000 9.1
2001 11.6
2002 11.9
2003 9.8
2004 29.0 (shareprice increases in anticipation of large future growth..Buy!)
2005 18.0
2006 15.3
2007 12.6
Now 11.6
So I suggest the PE norm is around 9.5 to 11.5 range
Therefore target price range as at 31-9-2007
Target price (TP) = PE x eps
Growth rate running at 6% at present
Therefore 57.65cps (31-3-07) x 6% = 61.1
TP Range = 9.5 x 61.1 = 580cents
=11.5 x 61.1 = 702cents
Latest share price 5.00pm 679cents up 12c
As there is still modest growth with MFT a PE of 9.5 seems rather low (harsh) at todays perpective..however one has to be reminded that we have had some moderate corrections rippling through the market recently and this bull market is mature and chances are that it may falter with a major correction or two.
As seen above in 1998 with the Asian crisis ..that severe correction bought MFT PE back to 7.9. So from that perpective 9.5 sounds generous.
So to be conservative I used a TP range using a PE norm range of 9.5 -11.5 for my decisions.
Therefore from a FA point of view MFT shareprice is neutral with a possible downward price bias
As there still is growth MFT's target price (TP) is increasing. If the shareprice lags behind the TP....use TA charts to time the entry to buy in.
** eps figures used differed slightly in various reference texts. The resulting PE ratios may be a couple of decimal points different depending on which reference one uses.
Disc:
Bought MFT July 2006 @ 593c
Sold 27 Aug 2007 @ 705c
The company is too good not to be on my watch list.
Thanks Hoop -- never really worked my way through an FA indicator with such clear points.
and, you ended up with my rule: use TA to time buys and sells, FA to pick the stock.
now, all i need to do, is follow my own rule...
Hi Gravy Train -- use the search button for posts by Phaedrus -- he outlines TA triggers with similar clarity. good luck!
Thank you Hoop, this is quite enlightening for me :)
Great analysis Hoop.
One thing you haven't mentioned is the change in the market conditions. while 11.6 looks high compared to their long run average of around 9.5, wouldn't it also be correct to suggest that the long run pe of the market is higher now than over the period you are looking at?
If the market pe is higher now by say 2-3 then perhaps the stock is undervalued.
Of course you could say the current market is overvalued or alternativey the historic market prices were undervalued, however what is a fair p/e for a market may also be heavily influenced such things as interest rates etc.
Thanks Guys. Rif Raf yes a higher market PE may influence the PE of a company, I know a lower market PE does affect a company PE ,the Asian crises was proof to that.
I would say that there are many mathematical equations floating around accessing the short term company values in relation with it's market, however when it gets too complicated I give up :) that is why I tend to be a long term investor by nature, its easier.
I have noticed that an overall PE for a market has its "norms" as well.... may work on one for the NZX one rainy day.
I think I read somewhere that the Hang Seng has an average PE of over 26, this may seem high in relation to NZX but they have high growth so is that market overpriced? maybe not.
I think you'll find that the average pe for NZ companies was extremely low through the 90's compared to overseas bourses. This is because the NZX was hit so hard in the '87 crash that it took many years to properly recover lost market confidence. In short the NZ market went from one xtreme to the other. Only in the last 3-4 years have we actually properly caught up and in some cases overtaken others in terms of valuing companies without applying a discount (because it is an NZX company).
I guess what I'm saying is that if MFT was trading at a PE of around 10 in the late 90's when perhaps the market pe was averaging say 12, then as the market pe is now possibly around 15, then all other things equal MFT should be at say 13.
I'm just guessing these numbers to illustrate the point. At a pe of 11.6 I wouldn't be losing too much sleep if I owned this stock.
You all seem to be basing the current PE for good old Mainfreight on last years total profit of $55m6. However that included a significant abnormal (one-off) gains of $19m2 mainly from the sale of the Hirepool stake.
Mainfreight themselves were very keen to make this clear in their results announcment.
So a better EPS to work with would be the 41.1 from continuing operations which at todays close equates to a PE of 16.4. [Note this is based on NPAT under GAAP]
Further more in the first quarter of this year we have a nice little abnormal of $61m2 from the sale of LEP and Pan Orient.
So the headline end of year profit for the 2008 year should be north of $100m0, but the profit from the every day business of logistics and stuff is very likely to be less than of this headline figure and the forward PE is possibly 15.
This in my book means MFT is currently fairly priced.
best wishes
Paper Tiger
Thanks to all for the views & pointers.
While I'd read the annual report enough to share Paper Tigers view of a current PE of 16.4, I wasn't aware of the Pan Orient Abnormal (thanks PT), I hadn't considered the natural PE range (thanks Hoop), or the market PE (thanks Rif-Raf), or in fact using (proper) TA to time my buy (thanks scamper).
All good things to be aware of I'm sure, as I find an investment approach that works for / suits me.
Again, as I'm looking to learn by doing - with training wheels on (exit strategies), and greatly appreciate the input from the experienced.
I guess time will tell for MFT.
Cheers
GT
Hello GT et al.
i notice that your query on 1 oct, and my response the next day, mark the lowest lows in about a year!
in the last two weeks, a number of TA indicators have taken a sharp upturn: relative strength, stochastics, moving average convergence/divergence, the price has poked through the 30-day MA on reasonable volume, and if today's 707 holds, it will have nudged through the short-term downtrend, but is still within the year-long downer.
at the point in the chart, a buy would still be considered risky, but do-able for someone with sharp eyes and strong nerves.
scamper's a holder. cheers.
Looks like Scamper's risk is pay off steadily~ these last couple of days.
Dsic: Viking's a holder, too.
Yes, and in the last two weeks, all sorts of TA indicators have become quietly positive after the great dump at the end of september.
Relative strength, stochastics, macd, bollinger bands, and even the on-balance-volume are looking good.
however, the ytd downtrend is not confirmed as broken until a close above ~740. soooo, the charts indicate a buying time is at hand depending on one's risk tolerance.
Best wishes.
Mosting of the shipping company in the world is experience profit boom in the last couple of years. Our parent company (a shipping giant) has been paying the equivelent of 10-12 months bonus to its employees for the last 2 years (so jelous of them).There are simply not enough vessles out there to carry all the cargo at the moment. Wonder if that would have an on-flow effect towards MFT?
Whats happened to MFT? My wife has a small long-term holding and I haven't really been following, but see that it has been trending down for the last 9 mths since its top of ~$8 last April . Is there something that I have missed?
thks
PM
thanks limegreen. Yeah, might just stick it out and 'tuck away'. Hopefully next time I have a look it won't be a dollar ;)
This thread seems pretty quite...
Third quarter result is out.
Disc: :)
The MFT chart gave many clear Sell signals when MFT's long uptrend ended. The subsequent downtrend has illustrated the folly of blindly "buying and holding" stocks - even good ones. Those that ignored the fact that the uptrend had ended have given some of their gains back to the market and had money tied up going nowhere for over a year.
On 12/2/08 MFT gave a Buy signal at $5.94 (light green arrow) when the confirmed trendline was broken. To my mind, this signal should have been ignored for the following reasons :-
(1) No confirmation from other indicators.
(2) No volume increase.
(3) Below previous resistance at $6.00 (round figure - remember?)
(4) You would be buying into a downtrend.
This morning, MFT trades have been going through at around $6.05. This has triggered another Buy signal (dark green arrow) :-
(1) Break above resistance at $6.00.
(2) Uptrend begins.
Conservative investors might like to wait for confirmation from a break of the OBV trendline before buying.
The really conservative might like to wait for the longterm QStick indicator to trigger a buy signal.
The chart shows the latest price of $6.05 - I'm sure you all realise that the Close may well be different. If it is below $6.00, this post is rendered irrelevant, but at least I can't be accused of posting signals in "hindsight"!!!!!!
http://h1.ripway.com/Phaedrus/MFT222.gif
Hah! but you are not giving us an un-equivocal buy either with your 'conservative investors' remarks.
The obvious trick here is buy in with one of those wonderful 5% stops to guarantee our profits :rolleyes:
Fundamentally I would say that this a reasonably priced stock with good medium to long-term upside, but in the current climate I would be wary of buying it.
See, even us fundies can sit on the fence. :)
regards
Paper Tiger
Just telling it how it is, PT. Basic Dow theory dictates that you can't have an "unequivocal buy" recommendation in the absence of confirmation from volume increase or other indicators as mentioned.
You guys are hard to please - I get stick for "early" posts and I get stick for "late" posts! I can't win!
PT's reference to the use of a 5% stoploss is probably tongue-in-cheek, but even that would be better than no exit strategy at all - and of course you can do a lot better than using a simple fixed percentage. Stocks vary tremendously in their volatility and to use the same value stoploss for all is misguided. A more logical approach is to place your stop just beneath recent support. I have written more about this topic here, should anyone be interested.
Thanks for drawing attention to your article, Phaedrus.
It took me many years of FA investing to latch on to the use of Technical Analysis. Even now, I'm no expert and employ only basic TA techniques but the use of stop-losses based on support levels is a must.
The point was well worth re-visiting!
;)
You're a genius, Phaedrus! Time now for even the more conservative of us to take the plunge?
Colin, very conservative investors would not be in this market at all. They would have cashed up last November and would still be out.
Here is an update of the February chart posted above. You can see that the QStick has now triggered a buy signal as did the OBV trendline break back in February. Do these now constitute the "unequivocal" buy signal that Paper Tiger is demanding? No they don't - here's why.
The NZ market as a whole is weak and globally this is a time for great caution. Markets might have a long way yet to fall.
The OBV broke its trendline by just tracking sideways, without any clear rise. Volume is NOT flowing into MFT. All this recent activity has been on low (and falling) volume. Without volume, any short-term rises will remain just that.
Since peaking in November 2006, MFT has been in a "longterm" downtrend. You can see that it is still making lower highs and lower lows - it is still in a downtrend.
These are times of opportunity though, and good MFT entries can be made, but these need to be carefully monitored. To treat them as "buy, hold and forget" (unequivocal!) positions would be foolish.
Fast oscillators can be used for monitoring stocks at times like this. The Williams'%R indicator (inset) is a good example. This oscillator gives a Buy signal when it rises above the green "OverSold" line, and a Sell signal when it breaks below the red "Overbought" level. This indicator would currently have you holding MFT, which, while technically "overbought" is still well clear of triggering a Sell.
http://h1.ripway.com/Phaedrus/MFT416.gif
Once again you have saved me from myself, and I will stay away from MFT for the time being. Many thanks for the time, effort and patience you display towards those of us who are not au fait with the more advanced concepts involved in charting. (The charts I use were left behind on HMS Endeavour by Joseph Banks!)
Yes, I wish I had ditched virtually all of my various holdings in November last, but I only offloaded a few that I considered were heading into the abyss. I have paid the price for not being more ruthless at the time but am slowly recovering lost capital - for instance by paying more attention to oils and minerals, both here and in Australia, as well as some "Special Situations." (NZO is an essential play for anyone wanting to enjoy the presence of some light in the darkness of the abyss.)
On the general question of when we may expect the turnround in the global equity markets to occur, I was encouraged to read the following statements tonight in the latest Annual Report by the fund manager for the Foreign & Colonial Investment Trust (which by the way was founded in 1868 as the world's first ever investment trust, is now one of the largest global growth trusts, has had an increase in dividend every year for the past 37 years, and its NAV total return has beaten the weighted average of its close peer group over one, five, and ten years):
"Short of a significant further deterioration in the economic fundamentals, we believe that equity markets are looking more attractive than at any time in the last five years. WE PLAN TO INCREASE GEARING THIS YEAR TO TAKE ADVANTAGE OF THE RECOVERY IN SHARE PRICES WHICH WE EXPECT TO OCCUR BEFORE THE END OF 2008"
Admittedly there is a proviso there, and the comments are all of little interest to TA investors, but I take more than a little heart from this statement - enough heart to prevent me from ditching the likes of my base longer-term holdings such as FBU, EBO and IFT holdings at this late stage.
Full Year Out
As a company they just keep on moving. :)
I put in a buy order this morning, at 685, but missed by a mile.
Phaedrus, you're supposed to give us a pre-warning!
Latest probably acquisition announced.
Currently back in favour with the market but at $7.20 a throw (or even $6.85) it is over my buy price.
Two tigers escape from Auckland Zoo and are crossing Western Springs Gardens, one turns to the other and asks "It is a lovely sunny sunday afternoon, why is it so empty?".
Bgt today at 530 ... seems a decent discount from 6mths ago. Long term future looks good. Beats paying $7+ !!
i don't understand!! the price was about 650 cps at the end of the full year, since then a 9.5% increase, and today the price is 428 cps...
"Financial result for the six months ended September 2008 (Unaudited)
The Mainfreight Group is pleased to report a net profit (before non-recurring
items) of $17.22 million for the first six months of the 2009 financial year.
This represents a $1.49 million or 9.5% increase when compared to the same
period last year.
"Consolidated sales revenues for the period were $625.02 million compared to
$383.33 million, an increase of 63.0%. Excluding foreign exchange
adjustments, the increase is 59.4%.
"EBITDA performance improved to $35.36 million from the prior year's result of
$28.72 million for the same period; an increase of 23.1%. Excluding foreign
exchange adjustments, the increase is 21.3%.
"Sales revenue improvements were achieved in all businesses, in all countries.
The upturn seen in our operations in the United States of America reflects
the contributions of the newly acquired business of Mainfreight USA, and the
ongoing improvements being achieved by CaroTrans.
"EBITDA results also showed continued strength with improved performances from
our New Zealand Domestic operations, Australian International and all
divisions in the United States.
"Dividend
The Directors of Mainfreight have approved an increase in the interim
dividend from 8.0 cents per share to 8.5 cents per share.
"This dividend will be fully imputed and will be paid on 12 December 2008,
with books closing on 5 December 2008. A supplementary dividend will be paid
to non-resident shareholders."
sooo, the announcement of an increase in div is met with a 0.9% decrease in shareprice, and that is just today, presumable in knowledge of the above news.
or maybe, someone is just desperate for some cash...
It is a different world now, scamper.
The irrational exuberance that saw $8 for this one a couple of years ago has long gone we now have the fear that things will only get worse.
Also 10% growth is only moderate you know, and below the stated long term target of 15% pa.
In the current climate no price is too low but when those that must have all worried themselves into an early grave and out of the market then the share price will once more start trucking in the same direction as the company.
Till then
regards
Paper Tiger
DISC: MFT Shareholder
They seemed reasonbly confident about the outlook going forward , well cautious but at least they were not banging on about severe market headwinds
Having sold last year..bought in and sold during a bear market rally this year all for an overall sell price average of $7.00 .
Now seeing a bigger and better company and still increasing their profits during tough times... and this growth company is at a PE of 10 .........
Temptation too great...bought back in today.
Does anyone know what MFT dividends for this year are likely to be? They pay out in July and December, but I haven't been able to find any statement about how much in the 19/02/09 results - or on the website, which is flashy but uninformative.
2007-2008 Half year 8.0cps
2007-2008 Full Year 10.0cps
2008-2009 Half year 8.5cps
2008-2009 Full Year. Your guess is as good as any tigers :eek:
regards
Paper Tiger
Update for those interested ...bought in gave in to temption at that time of posting av 427c.. market kicked me out for a 7% loss in beginning of Feb 2009 at 400c. (should've sold when MA 30* crossed (470c) but didn't) That 7% loss is less however as I got a 8.5c dividend..so nearer 5% loss.
Bought in again between 380c and 395c (av 394c) at the MA 30* cross in Mid -March so far so good this time around ...up +15.5%.
Hard to not have this quality stock in ones portfolio.
*From chart history The MA 30 indicator seems to work well for this stock.
It might appear that way for short time periods, Hoop, but over the long haul, such a short ma gives very poor results. Backtesting shareprice data since 1996 tells us that trading MFT using a 30 day ma would have resulted in an average gain of 3.7% pa. It would have triggered 136 entries of which just 31 were profitable. Simply buying and holding over the same period gave an average of 34% profit pa.
It is hard to beat the simple basic TA shown in this chart. You can see that the broken OBV trendline was first to trigger a buy signal, followed a few days later by a break of the well-confirmed trendline. While this signal happened to coincide with a 30ma crossover, note how the new (confirmed) trendline is much closer to the price action and could well give a more timely exit signal because of this.
There is simply nowhere else that any of the 3 confirmed trendlines shown here could have been drawn. It would be easy to add a raft of other indicators, but why bother? Often less is more.
http://h1.ripway.com/78963/MFT54.gif
This chart includes today's latest price, but of course the Close may be different.
[quote=Phaedrus;253690]It might appear that way for short time periods, Hoop, but over the long haul, such a short ma gives very poor results. Backtesting shareprice data since 1996 tells us that trading MFT using a 30 day ma would have resulted in an average gain of 3.7% pa. It would have triggered 136 entries of which just 31 were profitable. Simply buying and holding over the same period gave an average of 34% profit pa.
It is hard to beat the simple basic TA shown in this chart. You can see that the broken OBV trendline was first to trigger a buy signal, followed a few days later by a break of the well-confirmed trendline. While this signal happened to coincide with a 30ma crossover, note how the new (confirmed) trendline is much closer to the price action and could well give a more timely exit signal because of this.
There is simply nowhere else that any of the 3 confirmed trendlines shown here could have been drawn. It would be easy to add a raft of other indicators, but why bother? Often less is more. [quote]
Phaedrus yes agree that 30ma can give poor resuts and too many people rely on it as a good indicator (possibly because it is on nearly every free chart available).
Agree simple can be better on a well behaved chart such as MFT
Surprised about your 30ma figures overall dated back to 1996....yes rather low and a bad indicator used in isolation.
However:) ....my quote
*From chart history The MA 30 indicator seems to work well for this stock.
my term "history" I used was a 3yr graph ...ok not exactly total history ...but in my defense probably a better worded phase should have been e.g..*From 2006 -2009 chart history The MA 30 indicator seems to work well for this stock.
This is what I observed
I kept it very simple as it was a casual visual glance on a very basic chart.
I have attached that chart with my amateur paint (apologies;) sadly not an artist) to verify my argument.
http://i458.photobucket.com/albums/q...3005052009.gif
green is 30ma cross to buy
Red is 30ma cross to sell
brokeage fees are ignored
prices approximate only..and based on theory..in practice buying and selling at the ideal prices may not be possible.
Lets analyse this 30ma crossovers a little deeper
Theoretical purchase of 1000 shares in May 2006 Orginal outlay $4600
Trade 1 460 - 780 = = +320c/share.......$ 3200 profit +69%
At end of trade 1 capital gone from $4600 to $7800
__________________________________________________ __________________
Line is drawn here .. all trades from below this line happens within a severe Bear Market Cycle Market cycle.
__________________________________________________ ___________________
Purchased 1068 shares outlay $7800 at beginning of Trade 2
Trade 2 730 - 730 = zero........................zero profit
Trade 3 720 - 740 = +20c/share..............$217
Trade 4 700 - 720 = +20c/share..............$229
Trade 5 600 - 610 = +10c/share..............$137
Trade 6 610 - 700 = +90c/share.............$1237
Trade 7 650 - 700 = +50c/share............. $740
Trade 8 400 - 460 = +60c/share.............$1554
Trade 9 370 - ??? With the accumulated money of $11914 the investor has bought 3220 shares at $3.70 Unrealised capital as of now today ($4.59) is $14780
Using 30ma only for the last 3 years on the MFT chart original purchase of 1000 shares outlay $4600
At the end of trade 1 (in a bull market) exit $7800 A tidy profit of 69%
Now the tricky part we enter a Bear market cycle where we see the MFT share price gets a severe hiding from 810c high down to a low 340c. A buy and never sell long term investor takes a hiding ..big time.
The ma30 investor starts off at trade 2 with the $7800 and buys 1068 shares
After each trade the investor reinvests all the gains so its accumulating capital.
At the end of trade 8 that $7800 has turned into $14780... +89% profit during a Bear market cycle on a share with had lost nearly 2/3's of its share value ( 810c high to 340c low).... Damn good eh
This has been dropping consistently for a while now. Especially this week, following the negative article in the Sunday Star?
Most people still have MFT valued mid to High 5's. I was keen at 5, now they have dropped well well below that.
Comments on - How much further this drop will carry on? If those brokers are dreaming with 5.50+ valuations? In general - Any good reason not to buy MFT right now??
Fundamentally, then, for most people, MFT must be a Buy. For them it represents value.
No one can say. MFT has previously found support at $3.96 and $3.30 - this may happen again.
To some extent, all valuations are dreaming, Buns, in that they attempt to calculate what a stock is theoretically "worth" - what it ought to sell for. The market sets their real value. Something is only worth what you can sell it for.
Yes. The sharprice is falling. No-one knows how far it will fall. Why not wait?
MFT has nice tidy trends and performs very well with TA. You can see from the attached chart how the On Balance Volume indicator gave good Buy and Sell signals that preceded those derived from price trendline breaks. Volume changes generally precede price changes, so the OBV is usually a leading indicator.
You sound like a staunch fundamentalist, Buns, but I'm sure you can see the value in a nice clear simple chart like this one. (Green arrows mark Buy signals, Red arrows mark Sell signals)
http://h1.ripway.com/78963/MFT610.gif
Just a quick question Phaedrus:
On both the OBV and price charts you posted for MFT, the price touched and in the case of OBV seemed to go below your green trendline. In theory this should have had you selling out at these points yet your graphs imply you stuck with the trade.
The hog wondered if you had any thoughts you could share about when to get out of or into a trade when the relevant trendline is touched or breached.
The Hog has the eyesight of a hawk! Maybe his screen is running at a higher resolution than mine. Either way, I'm impressed. I have redrawn the OBV trendline with infinite care. It should never have crossed (even slightly) at the point you noticed, because that was what it was being set to. I have noticed that sometimes points can jump a pixel either way when I reduce the chart size for posting - maybe that is what happened here. Maybe my sight is failing. I'll shift my chair closer to the screen. Lucky it is LCD otherwise the radiation would likely see me off.
Re the price touching the trendline - that would never be taken as a sell signal. It is, in fact, confirming the trendline. You can easily see that all 3 points of the price trendline are perfectly in line. With trendline breaks of any sort, you want a clear, obvious break. Some people specifically wait for the trendline to be penetrated by a certain percentage before acting. Others only act when the trendline has been broken for 2 consecutive days. If in any doubt at all, my preference is to bring in another indicator.
Don't worry about my red "Sell" arrow, JK - it was way back in May and has no bearing on whether you should buy MFT now or not. Let's rephrase your post....
"For any of those whom are foolish enough to buy a downtrending stock on a falling OBV, a 10 cent dividend will be paid this month with an ex date of 17 July."
Question :- How much do you think MFT will drop when it goes ex? Maybe 10 cents? 2.5% ?
http://h1.ripway.com/78963/MFT72.gif
12th of june looked fairly significant , what happened then?
Don't worry about respect, YK! "Is it safe to say some support should be expected at the $4.05ish level?" Just change the should to could. It is either still there or it is not. We don't really know until it is tested.
"DB charts don't offer OBV. Is there a formula so RSI can be converted to OBV" No. There cannot be, because volume does not come into the RSI calculation at all. You can get access to OBV on BigCharts.
"RSI has been increasing for 2 weeks?" I don't think so. The RSI has been tracking the price ever since the Bearish divergence back in early May. See how the March Bullish divergence was also an excellent signal.
http://h1.ripway.com/78963/MFT72b.gif
Ever so tantalising close to a Golden Cross a week or so ago .... that 50MA line getting away from the 200MA line not good
I'm hooked on these Golden Cross things
dear winner and sir P.
in spite of devoted reading of this forum, i seem to have missed the education sessions on Golden Crosses. Please could you help
Your ever humble puppy, scamper.
Scamper....you can blame Macduffy;);):) on bringing up the Golden Cross subject on the DOW thread 24-06-2009 Post #479 There was another page of discussion after his post.
Enjoy
Yankiwi...It sounds like you have been seduced by the dark side. Did you average down (an investment no no in a downtrending stock) just for the 10c Dividend ??
You quoted my post and an update on that post is that I sold nearly all on the MA30 cross and the sudden other indicators sell signals on the 28th of May/ early June for between $4.50 and $4.45 when they released a downbeat forecast with their Full year report.. I booked a 15% profit for those 10 weeks I had MFT
Yes a good company, good management, but the time to invest back in is not yet for me ...From where I sit the Technicals still look bad... OBV is still falling 7 weeks after the forecast announcement..... Phaedrus may not be happy with you especially after posting his TA indicator charts.
Some good news for you...I occasionally go through the Avalon Dr Mainfreight in Hamilton..the place seemed emptier and lacked activity during the Autumn months but was surprised last week when I went in to get some firewood pallets, the place was full again and busy..a good sign... eh.
Well timed Yankiwi...good on ya.... your early entry was too much risk for my discipline...but hey, we all have different investment strategies and if they all work who cares :)
The buy signals for me came in last Thursday (23rd) so I bought back in Av $4.30 ...and for good measure I bought some more this morning at $4.39.
Its amazing isn't it.... when I posted 10 days ago the TA looked like dog tucker and I wasn't interested at all...5 days after that post, I'm in and today accumulating further.
Interesting article in the NBR this morning
Bridges not up to 50-tonne spec
---------------------------------------------------------------------------------------------------------------------------
Quote ...."...............It could be years before transport operators are able to take advantage of a rule change allowing them to increase load weight limits.........................
..............Mr Joyce was expected to confirm the rule change later this year, boosting the weight limit from 44-tonnes to a maximum of 53-tonnes for some trucks on specific routes.
Permits would be written for operators covering a specific route, a little like airlines filing a flight plan. Any bridges on a proposed route not able to safely carry 53 tonnes, would likely lead to a permit refusal.
And, with more than 300 bridges identified in the NZTA study as requiring work worth an estimated $85 million, permitted routes face the prospect of being cut short...................................."
--------------------------------------------------------------------------------------------------------------------------
..and you can bet your boots this won't be high on Transits priority list...and even if it is, my personal view is that the way Transit operates it will take years.
Hit the $6.50 barrier today, but no obvious dents in the bodywork.
The trading volume on Mainfreight picked up a couple of months ago, and the OBV is running away.
As far as I can determine those buying now are factoring in some strong growth over the next couple of years.
Although I believe this is one of the best companies on the NZX currently, as is often the case, I feel it is a tad overpriced.
regards
Paper Tiger
Disc: MFT is my single largest shareholding.
Gee..PT...You've had this stock for a while now.
A marvelous stock to own and get a good night sleep as well ....steady uphill mover... uninterrupted by economic recovery concerns ...the uptrend not even impacted by the recent market correction...great stuff.
Yankiwi..8 month old question...Still in Hoop?
Ooohh yes
So profit of $36M4 or 36.9cps, which is a P/E of 16. This provides a moderate increase in the headline profit.
Dividend stays the same at 10cps.
Usual stuff in the commentary a number of satisfactory's and a disappointing.
The good thing is that some bonus as been paid and I would have been happy for them to provide a more extensive one. It is important to keep your employees motivated.
Anyways a definite 'not too bad' in the circumstances. My faith in the management remains and I look forward to the time when the US and Asia operations really start to contribute to the bottom line.
Yes I agree PT..not too bad a result.
A good bounce back to solid growth in the last half year up 11% sales / 58% earnings from that of the bad 1st half...This momentum has continued into this 2010 financial year so the PE being at 16 seems justified. Management did the necessary cost cutting stuff during the 2008/2009 hard times as all good management should. Incentives to boost production ..all good management strategies.
Nothings changed in my book ...PT like you have faith in the management.
The market seemed not to like the result though down 14c**...get the feeling the price fall is not warranted FA wise. TA wise the Charts don't look good so maybe the fall is technical rather than fundamental.
**price bounced up as I wrote now down 8
Disc: own MFT shares