I am sure that this has been debated since TEL and CNU split, but for someone who is not in to either yet....what is the best way to go. Is it either or or, or both for dividends?
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I am sure that this has been debated since TEL and CNU split, but for someone who is not in to either yet....what is the best way to go. Is it either or or, or both for dividends?
I do not see the future of digital communication as an either/or situation.
The ability of mobile to offer higher data speeds will continue as will the ability of copper/fibre optic to do likewise. Research continues in both these areas.
Consumers will consume as much entertainment, information, services, lots of things we have not yet thought of, as long as they can reliably download and upload them and provided that the price is affordable. They will have both fixed and mobile connections (even I have both!).
Chorus can be a nice little earner provided that it is managed well and the regulatory environment lets them invest in the necessary technologies. Might be a bit capital intensive though.
Best Wishes
Paper Tiger
Disc: do not hold CNU
Chorus will continue to make money for those that are awake ...
Technology is gaining speed.. Read the other day about an experiment in Germany.. A trial over about a kilometre..
A DVD transmitted in one second..
I live in a time today that was only fantasy.. When only began school..
Have always understood that mans total knowledge doubles every seven years..
Don't believe me.. ??.. Cast your mind back seven years !!..
Copper and Fibre.. ??.. Nah !!.. Take your profits and run..
But your definition of a great business has been proven wrong by Schumpeter since 1942. If investment is future-oriented, then at least you want to bet on something that has a future. By definition, future is not easy to predict; and the further away the harder it is. For example, it is a lot easier for you to predict what is going to happen in a day time then a year time.
When you say that CNU is a great business because it is easy to predict and almost in a perpetual sense, that doesn't not worry me because we need you with this kind of thought in the market. However, it worries me if the employees working in CNU think the exact same way. Google is a great business because it is not just a search engine; Amazon is a great business because it is almost no longer an online store; IBM is a great business because it is actually not in computer business anymore... it is the unpredictability which makes them great, because that what future means. It is creativity and innovation of their people to lead everyone else to the future.
Again, I am happy for people to limit their thinking and stop at certain point, I may even envy you because you don't have the urge to look beyond the obvious. Sure that saves a lot of time, and brain cells.
I take your point, futurist but draw the line at limiting the definition of "a great business" at those which have successfully evolved from their original purpose and are constantly looking to evolve further. If that is, in fact what you are proposing. I hesitate to introduce that much-referenced Warren Buffet into the debate but he has often emphasised that his criteria for investment relies heavily on finding companies with dominant positions in their markets and who concentrate on their core competence - think Coca Cola.
Google, Amazon and IBM all achieved dominant positions in their markets before branching out into other areas - which I guess only goes to show that there is room for different approaches to successful investing!
Apologies for probably taking the thread even further off the CNU track!
I'm not trying to argue that copper/fibre is dead as everyone will migrate to LTE/4G. But Telecom's 2 biggest costs are staff and Chorus costs...they're actively addressing the former, you'd have to believe they will also try to do something about the latter.
So the scenario I'm talking about is more like Chorus losing 10-20% of their lines (rather than 100%)
Got in again at 2.55..cant see it going too much lower (he said hopefully)!
Chorus is on the move upwards with low volumes up for sale so could be interesting for all holders.
There's still plenty of sellers around though, at least they aren't pushing the price down like few days ago.
CNU SP pushing upwards here now....tried to get more at 2.55 but got shoved aside by eager beavers. Might be ready for a small climb.
Ouch, looks like it broke the 2.50 mark, how low can it go?
It looked like it was going to close at $2.51-2.52, but at 4:58pm, there was a huge sell order of over 300,000 shares placed at ~$2.46.
This pushed the closing price down to $2.49. Someone big was desperate to get out aye.
Well I was right with my prediction to be sub $2.50 by months end, how much lower now???
JMV
There is certainly a great willingness for certain parties to be out of this stock, but with no new information from the company, surely they must be very good value at these levels. Maybe it's the case of some big fish wanting out and a chance for the tiddlers to have a cheap feed.
Nice foresight there Edger did you get that crystal ball of trademe :)
STC ~ would you be in accumulation mode if the yield & dividend dropped significantly or the CEO decided to change the rules due to higher costs involved with UFB Rollout.......we hope not. It's always concerned me a CEO investing in the company, a wise paper animal did state earlier that CEO's don't make the best investors and was this even his money???
Chorus in this position I doubt will be able to hold this level of divi for long which will reflect the decline in SP. Id be looking to see what happens in December when the two year mark is up from demerger. Now that will be interesting to watch in the proceeding months.
It was before your time but there was a much revered technical chappie on these forums who has now moved on to better things* and one of his endearing little habits was collecting little snippets of posts like the above.
He would then paste a little picture showing the downtrend of the stock in question with those little snippets marked in the correct places.
It was quite amusing provided you had not made the quotes.
Best Wishes
Paper Tiger
*believed to be France.
I have been misquoted :ohmy:
Best Wishes
Paper Tiger
This share has certainly had some interesting posts and strong opinions over the last couple of weeks. I have been accumulating believing it will be a grower as soon as the weak willed get burned off. Always impossible to buy right at the bottom however and revisiting new lows always tests the belief systems. Big sale on Friday also has to be seen as a big buy by someone(s) very keen. Half full-half empty. As Sparky says nice divies in the meantime and this alone will drive buyer interest.
Chorus one of best places to work in nz
Highly engaged staff lead to superior shareholder returns the lady says
Well done chorus
So guys ...no worries ...the staff are looking after you
http://www.nbr.co.nz/article/three-b...2013-dc-140828
Sorry about the smiley... wrong button.
"In-house, out of house..on top of the house"... You are playing with words here.
It cost bugger all for the Into's to to re- domicile their holdings. The 'relevance' I
refer to is exchange wise. Note I did not say NO relevance. I said "Very Little".
If these trades (SP) are in house then only effect in the market place is the change
to the volumes & VWAP, the shares have gone nowhere. If they have changed
real hands then thats different.
Do you know between who?, Brokers etc do, there again is that what you are ??;)
249 649,708 17:08 SP
IMO. this sort of exchanges of shares should be a lot more transparent to us folk.
How about SPIH = Off Market, In House.
INSP = Intn.Crossing, offmarket.
etc.....
BB:)
Broker ..no broken ..somewhat. Yes agree the transparency as to details is a mystery to me. From my uneducated point of view, it "looks" like either CNU bought some of their own stock back as it "appeared too cheap"?? However I was under the impression that this needed to be declared to the NZX ..so maybe not. Or one of the brokerage houses "thought was too cheap" or "too volatile. However at its simplest level someone exchanged a large number of shares for something....why?...I have no idea...who? have no idea. Would be interested in finding out the facts as opposed to us speculating about it.
FBU is a good one to look at
All after the bell !!
837.3 7,955 17:24 WA 837 4,787 17:24 SP 837 10,512 17:23 SP 837 10,512 17:22 SP 837 94 17:22 SP 837 204 17:22 SP 837 7,345 17:16 SP 837 717,211 17:08 SP 837 112,802 17:07 SP 837 50,000 17:06 SP 840 378,000 17:06 SP 837 3,000 17:05 SP 837 15,329 17:05 SP 837 15,800 17:05 SP 837 8,368 17:04 SP
What the hell ?? not really a level playing field for us ordinary folk.
In fact it is distorting the data, thereby misleading I fell.
Maybe the NZX could/should be held to account ??
BB
I have sent the following email to DB to see what they say. They are probably constrained by privacy concerns for particulars but it would be nice to get a general idea.
Hi Direct Broking Team,
A/c xxxxxxxxx here. I have a question regards the after and before market share transactions shown in the Depth.. So for example CNU showed @5.08 a parcel of 649,708 @2.49 with a “SP” under “cond” heading. Do you have a breakdown of what these associated acronyms stand for? Thanks for shedding some light
I have a list on my office wall. Cant think where the hell I got it from.
SP stands for = Off market transaction
IN = Internatonal Crossing
OL = Market Trade (too small for price setting)
LT = Late Reported
PF = Portfolio Marriage
SS = Short Sell
XX = Extra Ordinary
Now the ASX have some interesting one's :-
BK = Buy Back
BP = Booking purposes Only
BV = Book Value Switch
BZ = Board Broker Sale
to name a few.
Why Cant the NZX have the same or similar
I like the "BK" (buy back). Tell volumes would'nt it
So here's my non existent favorite SPIH = Off Market In House
Will be interesting to see how DB will respond
cheers BB
If you navigate to the bottom of the main website and click the “Help” link, it will display a pop up box. From here, click “Glossary”, then scroll to “Condition Codes”.
DB condition codes as below..as per Johnny at DB
Condition codesCondition codes apply to the Course of Trade display available on the depth view and denote any unusual trades. Note that some conditions may not apply to all Exchanges.
The following details the various conditions for NZX trades:
- IN
- LT
- OS
- OL
- PF
- SP
- SS
- WA
- XX
- International
- Late Reported
- Overseas
- Market Trade (too small for price setting)
- Portfolio Marriage
- Off Market
- Short Sell
- Weighted Average
- Extra-ordinary
The following details the various conditions for ASX trades:
Transaction Types
- AM
- BK
- BP
- BV
- BW
- BZ
- CT
- CO
- CX
- DR
- EC
- EP
- LN
- LR
- PO
- PR
- PS
- PT
- IA
- ASX match facility trade
- Buy back
- Booking purpose only
- Book value switch
- Buy write
- Board broker sale
- Combination trade
- Standard combination trade
- Centre Point
- Direct reporting
- Exercise of Call
- Exercise of Put
- Loan
- Loan return
- Permitted Trade During Pre-Trading Hours Period
- Prompt re-booking
- Prompt Sale
- Put through
- Interstate Accounting
Time or Location
- LT
- ON
- OS
- Late
- Overnight
- Overseas
Delivery
- EF
- FD
- OF
- OR
- BL
- Delivery of a future
- Forward delivery
- Overseas delivery
- Overseas resident
- Blocked from transaction netting
Market Information Only
- MI
- Market Information
Crossing/Special
- XT
- IB
- SP
- CS
- SX
- SO
- SA
- Crossed trades
- Index replicating special crossing
- Special sale
- Contingent special
- Special sale portfolio
- Other special sale
- Special crossing sale
The share price is still tanking on no news with net yield above 10%, is this going too far or the regulatory impact is just so huge that no one cares about anything else?
I believe its just worry. but i dont think the comcom will go through with the original plan. they will most likely meet them halfway. So there should be a jump in the share price if it keeps sinking ill probably buy in on friday
The only relevant info I found are two new research reports (both chargeable) released recently:
31-May-13 Reuters Investment Profile: Chorus Ltd: Business description, financial summary, ........
2-June-13 Thomson Reuters Stock Report - CHORUS LIMITED (CNU-NZ)
maybe there is something in these reports causing the decline?
If somebody here has access to those reports, what do they say in a nutshell??
Right. Ive also heard that there may be Japanese investors pulling their funds back home.
ending diagonal triangle?
hammer
capitulation?
That's called " Yen Carried Trade". International companies borrow nearly zero from Japan, converting into other currencies to buy shares, bonds and equities. When the Japanese RB increases the interest rate, distaster would happen. Foreign investments have to retreat back to Japan and cause huge global financial turbulence. Nowadays, US and other countries joined this game. The monetary policy did help domestic banking system after 2007/2008, but brings more pain in the long run and make larger bubble later.
BoJ plans to double the money supply and they are buying all the government bonds. So not sure why you would suspect an increase of the interest rate. They want inflation very badly.
Money returning home is a myth because it is foreseeable JPY will continue to go down. That means their loan actually gets smaller. It makes sense to keep money in other currencies or foreign assets. That actually is the fear of Japanese government and BoJ of the down side of their crazy economic policy right now.
This is just the beginning of their reform. Don't forget the coming election which it is very likely Japan will be completely ruled by one party again. That means the government could push even more radical ideas.
There are two endings here, either the economy picks up with an inflation, or the economy still dies plus the government defaults. Both situation warrants a downward trend of JPY.
RE CNU, I thought it is mostly a long term investment. I wonder why people are so concerned about the everyday movement of the share price?
RE CNU, I thought it is mostly a long term investment. I wonder why people are so concerned about the everyday movement of the share price?[/QUOTE]
No concern, love watching it head upwards at the moment though. $2.56 and climbing
No concern, love watching it head upwards at the moment though. $2.56 and climbing[/QUOTE]
You mean from the height of $3.40 a year ago where it goes in opposite direction with the index in one of the best performing years?
I know, it is a dividend share and hence no one should care about the share price. In fact, the dividend yield just goes up when the share price goes down so it is always winning one way or the other.
Am I the only one who cannot figure out what's going on with CNU? It dropped a lot last two weeks on no news and now it is bouncing back very strongly, again no news came out either.
Nobody see the news last night? CNU has a !% uptake among homes - that is 1% of the homes where it is available. The other fast option, a coppper competitor is cheaper and several times faster than the normal broadband. I can trade successfully without stuff faster than the speed of light and I suspect that that is a common attitude out there. If I had money in CNU it would go back to TEL - at normal broadband speed - rather than sitting there, waiting for the second coming.
It is a chicken and egg problem at the moment. With existing services, you are right, copper is more than enough, but with new video services (should they ever arrive) fibre is essential.
Another issue is has been rolled out in areas that are not naturally early adopters. They should have focused on richer suburbs and other key demographics (student areas, businesses). Instead, they have gone for a hodgepodge of towns.
I plan to get it once available in my area.
Sparky do you know where we can get a roll out timetable for West Auckland
Mine should be in my June 14. I am not sure whether the current works in my area are Vector or Chorus, having seen both vans parked up.
Agree with the Clown - the government wont let their 1.5B investment go to waste. They need more people connected and the only way for that to happen is to ensure the existing solution isn't priced to favourably.
Thanks for this Sparky. Very informative. One additional issue I need to add here is that on my recent travels, I have become painfully aware how ridiculously slow our "broadband"really is.
In simple terms, NZ is being left behind.
There is no question that NZ needs to move onto very fast fiber if we want to be serious, especially with the increasing business with China that is fast growing and will be demanding fast and immediate access to our products via internet.
One example is that today we had NZ Pure Shop going live where Chinese consumers can buy NZ produce on line, backed up by serious businesses like the Talleys,, Sanitarium, King Salmon and more. This is the sort of stuff that will move NZ ahead and we need very fast fibre connections to do it.
DISCL: Despite NZ Pure Shop being in Nelson like myself, I have absolutely no interest or connection to NZ Pure Shop but am excited and support the initiative wholeheartedly
Thanks for the analysis STC. Keep it coming.
Not sure if this is old news....
http://www.stuff.co.nz/business/indu...ups-after-deal
Thanks for the post, very interesting
It is new news but it was expected. It was a technical block to being able to sign people up.
I hope we see more of these news items to come such as comcom decision, govt funding of connections etc which are all technical/cost blocks to being able to sign people up.
Sparky The Clown: An example of the mismanagement of this Fibre Optic Cable was layed down my street in West Auckland yesterday. No notification or other contact to ask if we were interested in connecting up to this facility. A check on the internet said the earliest possibility of connection was June 2015. You would think if they were laying cable they would be looking for customers to connect to it.
CJ a bit silly laying a cable that is not going to be used for at least Two Years.
Sparky The Clown maybe it confirms what I have all ways thought. That John Key's National Government is the most useless IMHO we have had to put up with for many years. It would not matter if it was coming out of the politicians personal pocket. Why are they complaining about the lack of uptake from places that the cable passes then.
Also remember that there has been a limited advertising push so far.
Sure only 1% of the 100,000 homes have connected, but only 100,000 homes out of a total of 2,000,000 have it running past their front door so why would you do a multi-million dollar ad campaign.
I always thought it was a strategic mistake not to rollout quickly in Auckland (esp righ suburbs) first as they are more likely to subscribe. Having said that, in 2 years time, fibre will be the only advertising you will see.
CJ why would they pay for an advertising push? When the cable is running past the door less than 15metres away & they tell you it is over two years away. This is 2years revenue down the drain.
I was refering to Telecom/Vodafone/etc.
You dont know the install timetable for your area. A far as you know, you are the first 100m of a 10km network, and you want them to spend money on all the feeders now. Like building a 10km motor way and putting in all the lampposts as you do each 10m bit of tarmac. I dont know the timetable either but I am guessing it is at least a year till that piece of fiber gets lit.
Attachment 4596finally done this for you....
Cj I can not understand this reasoning. You do not establish the branches of a tree then grow the trunk. Would it not be logical to make a lot of the household connections when the workforce was there. As comeback maybe 100 or more different times to connect each household as they apply for connection. At least in my opinion, I would jump at the chance provided they could give a reasonable date to go live.
Thanks for the link Sparky, much appreciated.
What a poor environment to try to manage a business under.
Cheers, RTM
If worse case did happen and there was a $160 EBITDA hit, would that cause a breach of banking covenants? This would likely trigger a capital raising? A capital raising would dilute existing shareholders reducing eps and dps?
Still, I can't see them being hit too hard. This is political and John Key won't shoot himself in the foot.
Good luck to holders.
Everything we already know, but still interesting to see this on the motley fool aus page.
http://www.fool.com.au/2013/06/12/joining-the-chorus/
I told you so
Yeah but...... If a 160m drop equates to a 2/3rd reduction in NPAT, why would you assume only a 1/3rd drop in divi?
I still think the cavalry will come charging over the hill to the rescue, but gee, I also understand why offshore holders are throwing the towel in.
oh, the tiger already picked up the anomaly
Is anyone at the conference? The share price for CNU has tanked but I can't seems to locate any news relating to this today.
the hammer shows support at the 2:45 level moosie. but if broken.....!!
Trend is down but on min vol?
"If the incoherency in the framework is not reconciled, it will impact every New
Zealander:
International investors will simply walk away from New Zealand - Chorus’
proportion of international shareholders has declined from around 55% to around
45% since the draft UBA decision. At the time of demerger, around 75% of
Chorus shares were held by international investors so there has been a dramatic
flight of international capital out of Chorus and NZ."
In my view it is a good thing so many overseas investors have sold out of CNU. CNU is a domestically focused share. It is ridiculous that foreigners should own more than 75% on NZs own local network. No objection to foreign ownership as a general rule. But on a domestically focused share like this, it seems more likely that local investors will be in psychologically better place to control the future of our own broadband roll out.
SNOOPY
ON the one hand, I understand what you are saying but in reality, this is exactly the sort of share the overseas investors like (in theory).
Infrastructure shares provide consistent returns with relatively low risk <- every pension funds managers wet dream.
And then the ComCom comes along and complete changes the playing field. If the prices they are proposing are correct, then the prices they previously signed off pre-demerger on were incorrect. If that is the case, they sat on their hands for over a decade while old Telecom ripped of the New Zealand consumer.
The public are not buying the service, never mind the hype. Remember Claytons Whiskey? it had exactly the same problem.
Superior yield, based on what, gut feeling? Is NZ doing better than .. I dunno Hong Kong or even Turkey? Is the NZD more trustworthy than the dollars? And how regulatory uncertainty means different things to transparency? If you cannot see through something, isn't that being not transparent?
CNU is a NZ company with a local focus. People do not need 3 or 4 internet connections to their homes and so the business of CNU depends on upgrading the equipment and infrastructure every decade or so. Also it relies on the assumption that there will be no direct competition for the foreseeable future due to the cost involved. What if competitors come from an indirect source? Where is the upside that many of you willing to put your faith in? Oh yeah when foreign interest is walking away, you don't see that as a problem of the business but just regulatory uncertainty. If CNU itself is a by-product of regulatory uncertainty, how could it ever be separated from that?
Stupid question but does Chorus have an obligation to continue providing copper services in areas where Fibre has been rolled out.
This is a duplicate network and at some stage they must be able to phase out copper, provided there is an alternative. If the pricing is all wrong, then that phase would surely be earlier rather than later.
Hi Sparky, if the government doesn't step in (I believe it will) how does Chorus look now that we have a possible worst case scenario of $14.00.
I'd try to work it out but would no doubt get it horribly wrong. cheers
Thanks Sparky
Yes, but in a world of global investment all of those points apply equally as advantages to New Zealand investors. In fact NZ investors will get the better deal cf over seas investors if they can properly utilize those Chorus imputation credits.
When things are going well, I agree that from a customer perspective there is little difference, that is connected with whose capital is used for the construction.Quote:
I don't believe Chorus is any less desirable to other investors simply because its market is wholly NZ based. It has become less desirable because of regulatory uncertainty.
I simply don't believe that local investors have any better claim than foreign investors in controlling the NZ broadband rollout when
- the fibre rollout is in partnership with the government (who clearly are the customer)
- the Commerce Commission is the one currently in the driver's seat because of regulatory creep
- the govt will set future direction by virtue of the impending Telco Review, potentially overriding the ComCom (fingers crossed)
Down the line I believe that local capital is more likely to be aligned with local interests. A sell down by overseas investors due to some shock in their home market might mean it is more difficult to raise capital to fix any structural problems Chorus might have in the future.
SNOOPY
So not an argument either way.NOt necessarily. The dividends received may not be taxable income in the foreign jurisdiction so they would receive the same net yield. If it is taxable income, the tax credits (IC's) may be recognisable. Don't assume the same double taxation as NZ.Quote:
In fact NZ investors will get the better deal cf over seas investors if they can properly utilize those Chorus imputation credits.
HOw did you decide on 8.5%.
VCT has a gross yield of about 7.3% which would increase the share prices in your model further.
Do you have a different yield for VCT (I used ASB) and if not, why do you draw a distinction between them since they are both regulated lines companies (albeit, one is comms and the other is elec/gas).
The market doesn't seems to agree with your analysis though, it tanked back to 2.56 now.
My point is the market has determined 7.3%(ie VCT) to be the yield on a regulated business that has gone through (most) of its regulatory uncertainty.
The question for me is not whether 7.3% is the right yield to use but what is the correct eps and therefore cps to apply it against. For some reason, the market is betting on the ComCom winning.
CNU price came crashing down again.
Its pretty clear an Insto or two is happy to offload at anything $2.50+ and its matter of letting some support build and then hitting the bids - likely some of the Aussie funds who have been quitting. As such I think a $2.45-2.65 tight range is likely until some new news so to speak.
After staying at the 13 months worth of available accounts, and the using the claims by CNU that a drop from the current $21.46 to the proposed $8.93 for the monthly UBA price would cost them $160M a year in revenue and make them reconsider whether it was worth getting up and going to work in the morning I have arrived at:
If the UBA price was settled at $16.00 then EPS would be $0.303 and maintaining a dividend of $0.25 would mean either:
cutting new investment by a third;
increasing borrowing (currently they seem to be maintaining debt levels);
getting more Crown funding.
My bet would be that the dividend would be cut to $0.18 or less as part of the balancing act with a slowed rollout of this fibre thingy.
A UBA of $14.00 would result in an EPS of $0.255 and further cuts all round.
Given this is all about providing high-speed internet to the masses to watch soccer and has a political aspect it will be interesting to see what is actually resolved.
Best Wishes
Paper Tiger
Downgrade to sell from Craigs today.12 month price target $2.29. P M me an email address if you want to look. JT
I use ASB Securities and now wonder if the Morningstar analysts are perennial optimists with CNU valued at $3.60 accumulate and MRP$2.70 hold.
I heard on the radio in Australia a comparable charge for their old/copper telecom network was over $20. Now might be a good time for the govt to compare CNU's situation with what is happening in Australia.
The loss of Premier League football by Sky will have some interesting effects on fiber uptake in the medium term.
My flatmate watches a lot of sports, but decides to illegally stream them online as no sports package tailors itself to the games he wants to watch, and nobody provides a way to pick and choose legitimately (the operator also chooses which game wins out if there's a clash, and with his weird mix of teams he follows in rugby, league and football this happens frequently with subscription packages).
The public is seeing the beginning of the move to digitally provided content and the demand this will have on internet providers to sell larger data packages, and the flow on effect of the lines companies to provide them.
Good timing for the debate around that inevitable 'next step' to get a little more in the public mindset. Even with a bit of div fluctuation I'm still with Sparky on this one, even if the SP comes down I'll just scoop up some more. It's a long term thang.
I take no pleasure in guessing correctly though...., finally had enough and cut my position at a large loss, good luck for anyone still holding CNU.
So why the big drop today?