In FY16 accounts it doesn't look like they hedge grain either, just FX and IRS.
Printable View
Does anyone know why this share has drifted lower?
Was just asking the same question.No announcements since the positive one on Aug 18th; s/p drifted down ever since.
Consensus outperform T/P $2 on 4 traders. Close to 12 days of 500,000 or more shares sold this month already. Insto selling down maybe?
Is there something I am missing? I know that Tegel are pretty unfavourably hedged for the recent upsides in the USD and lower feed costs, but this just means less upward pressure on the price.
The clearance for Aussie raw chicken market was probably overstated when the price went up, EBITDA isnt going to move huge on this.
Maybe some people are adjusting their valuation methods? Can't be Affinity right?
Who/whats Affinity OtL?
A friend has mentioned the coming Ingham listing .Possibility of manipulating the TGH price down for a better entry to Ingham?
On NBR pay wall now. And looking like the "indicative price range for the book build, which begins today, is $1.10 to $1.20 per share".
Under a $600m valuation now. Still curious as to why the drop.
Affinity is the private equity company that took this company public earlier this year. I know the other large holders, Claris, can't sell all of their holding.
Quote:
Originally Posted by Tegel IPO Prospectus
Hi all
Further to the above has there been any news on this share to drive the slump? It's dropped 10% or so in 2 weeks.
I have to say I'm a bit confused by Tegels share price performance. It was listed at the lower side of guidance at $1.55, beat prospectus information and has had pretty good news flowing through since the listing, yet the share price hasn't gone anywhere. It has a decent chunk of my holdings, but I'm a little concerned there doesn't seem to be a lot of interest since its listing. I notice most analysts have it at $2 within the next 12 month?
P.S. long time lurker but finally joining in the fun!
Welcome to ST Jeremy. I suspect there will be a question mark over this SP for some time due to quite a few factors such as;
1.) Investors may be waiting to see more info on actual financial results (runs on the board) and updated predictions v prospectus.
2.) October is generally a 'low' or 'risky' period for many shares on the NZX and with the USA elections looking very unpredictable, many potential investors may be happy to sit and watch from the sidelines at this time.
3.) IPO's are no guarantee of ever increasing SP's. Indeed the market is littered with examples where IPO expectations are not met. Early posts on this thread show some of the misgivings on this IPO, and perhaps some of these chickens are coming home to roost!
4.) Lastly much depends on your investment time frame. If your time frame is is only 6 months, then you may be disappointed. However if it is 5 yrs, then the current SP may be just a short term glitch.
I wish you well with yr investment.
(Disc - not a holder. Watching from left field )
Look back to recent sucessfull IPO's they all fell initially following listing: SCL, MEL (MELCA), MCY. Punters wanting to see pedigree before fronting up.
TGH share price now back to pre AUS fresh chicken anouncement levels. I could not see how this announcement justified a trading HALT.
DISC: stalking & becoming more tempted.
Thanks everyone, really appreciate the context. Makes a lot of sense now. I perhaps got a bit too excited by the AU fresh chicken announcement, but with "significant" opportunity written everywhere in the trading halt announcement it seemed tempting as a growth prospect!
At the end of the day you need to consider that this company is earning very low profits, saturated with debt and even if they are able to expand into different markets they may not be getting the best margins if expenses go up. You'd want to wait to see next financials and see if there are any improvements to warrant an investment, but as it stands this stock is overvalued for the value it will deliver for shareholders.
Above posted 16-4-2016
Since then there has been very little news.
The "Room for export growth" is proving right with the very positive announcement that Tegel will be able to export fresh chicken to Australia.
The Ingham float does give investors another chanal to invest in the chicken market,and may be one of the reasons for recent sp weakness.
The agm on 19th October should give an update of trading.
The reasons I brought into TGH remain intact.
Yes Percy, there will be a couple of announcements coming up and they will be really positive ones.
ASM 19 October - good time to say trading has trading has been strong and all that stuff and H1 will be ahead of prospectus forecasts. Come early November another announcement giving by how much more (possibly lots)
So good H1 result late November and a bullish outlook for the full year .....and share price will be 190/200 in December and Claris will be able to hock off 1/2 their shares. The other 1/2 go after full year announcement.
That's the exit plan - by hook or by crook they will make it happen
Can't lose from here ......20% plus to be made in a few months .....no worries
They say that consumer staples companies like Tegel are generally good investments - solid earners and non-cyclical
Every needs to buy the necessities of life eh is the reasoning
I went off believing that with Goldman Fielder - everybody needs their daily loaf and flour is an essential ingredient in many things
Now that wasn't a great investment
Big volume today and another blow to the stock.
Got out on close today.
This was meant to be a slow and boring stock in my long term portfolio, but too big of a fall on large volume for me not to do something. No news to back up the decline = follow the money (exiting the stock in this case).
Will watch from the sidelines now.
Record low that 155 and previous lowest close was 158
ASX still got a more hours to go and price still falling - but on pathetic volumes
And some of us were all so bullish this morning
Probably not a bad buy to be honest. I think people are seeing the drop and are panicking given this is supposed to be a slow moving stock and its recently slumped. Everyone selling this at the moment will be making a loss on the stock so I think I'll weather the storm unless it drops below $1.40 then I'll start to get worried. I don't see any reason to be concerned reading over the annual report and guidance announcements.
Maybe the right course of action.?
I will wait a month for the agm.
I never like buying/selling without a company announcement to base my decision on.
So far the only announcement has been the very positive one about them being able to sell fresh chicken into Australia.
Currently about 5% of our portfolio.
Last June the price spiked down this low it was back up in the 160's in a day or two
Time will tell if I have made the right decision, and selling at a loss is never easy but sometimes necessary to preserve capital.
Listening to the market in the past has rewarded me a lot more than it's taken, and in TGH's case if I'm wrong I can always buy back in.
Will be interesting to see if something comes out from all this downward pressure on the price, otherwise look forward to reading the AGM presentation.
Well... not even half a year since my posts above and TGH isn't looking to fabulous...
I would have thought TGH would be more of a 'safe haven' during times of volatility, not one of the stocks most affected by it.
If it slips below listing price (ie 1 more cent down)... things will get "extremely interesting" (will it bounce or will it crash further)
Lets hope that TGH's "unique position" allows them to deliver on their ambitious export plans... and pay an ok dividend
On another note, anyone watching the Inghams IPO? (could be good for comparative purposes)
Disclosure: not holding, and have no intention to
How can we measure performance of a company within the short period? We should study its performance at least for a period of five years.
On what basis we buy stocks?
On valuation
On the basis of creating long term share holder value
On the basis of creating positive cash flow for number of years
On growth
On trend etc………………………………
What type of strategy and criteria we have?
How about its business model?
For me this is a long term play and it is wise to buy on the basis of value and future outlook. More we know the company more we will benefit in the future. Currently, I have kept this under my radar. It is wise to buy any stock after doing some good research.
Lets not forget it was 1.78 a couple of weeks ago so it's not like things have been dire since the listing. It has consistently been above 1.60 until this week. I don't think people ever expected Tegel to take off after the listing but all things considered it seems like a sensible enough investment. Time will tell.
Enjoy your gloat tj.
Obviously it is not something I would ever do :p.
But, I still do not see any particular attraction to this share even at this price which I guess is getting down to the range from the valuation I did.
Best Wishes
Paper Tiger
More fun than a Briscoes one day sale.
Over 2 mil shares traded at $1.55 already this morning.
No substantial change and/or announcement since IPO as far as I’m concerned so we’re just being given another change to buy some more at the current price of 155. I’m certainly doubling up on what I got initially. Sold out on RBD so what I got from frying is just going to killing those chicken instead :p
No I am not buying.The wife and I both got reasonable allocations at the IPO,.I then brought more on market.taking our holdings to where I wanted,about 5%.I would consider buying more once there are more runs on the board,in a year or twos time.
I have seen two brokers research on TGH ,with target prices between $1.90 and just over $2.I think they are correct.
Averaging down is dangerous.May be safer paying a bit more once the selling pressre is over.It looks as though a fund manager is doing a quarterly book balance.Maybe they are getting a good allocation,or being an underwriter for Inghams float.
I would repeat the Tegel brand is No.1 and well repected.The chicken market is growing.The fresh chicken to Australia was a pleasant surprise,and the ratios are very modest;with a FY17 PE of 12.9 and a gross yield of 7.2%.
We should know better????
I can only guess the big seller has spooked the market.Ever one now thinks the seller knows something we do not know.?Possible,yet somehow I don't think so.But no news can make people see shadows,like the sp falling below the 100 day EMA..
Maybe a lot of truth the market overshoots,and undershoots.!
Great for traders.
A couple of days ago the agm was only a month away,now it has stretched out to be four weeks away..lol.
Puzzled by the sp drop also.
IMO the biggest long (5-10yr) risk I see for TGH is the international grain price. It's been at the floor for the last 5years and due for a rebalance - though how near that is I'm not sure as there is still a glut in supply. Know of a few importers who have found it profitable to import grain all the way from Bulgaria.... TGH may hedge the $ (and that is the other risk with it being traded in USD) but with razor thin margins it wouldn't take a massive swing in these input cost to do some massive damage to the balance sheet.
Disc: Not a holder....
$1.50... wow, on heavy volume to... seems as soon as it went under $1.55, it was a straight staircase down... but stepping closer to Paper Tigers valuation?
If we know their business very well and their business model, we should not worry about volatility in stock prices.
Are they going to have strong balance sheet in the future?
How about their market share here and abroad in the coming years?
Can they generate strong cash flow in the coming years?
I have seen some worst drop in stocks. Later they rebounded strongly breaking not only 52 weeks high but also all time high. If a company has strong fundamentals it is better to ignore short term gyrations. Market will recognize later.
Factors to watch:
Lower grain price
Their market share
New markets
Future outlook
Finally, globally chicken stocks have more legs and their major uptrend is very strong. In addition,it is wise to guard our portfolio with some defensive stocks as well. In my portfolio, I have kept some defensive cash cows.
Hope Aleida has started - and getting ready to pump out some good news
Job really about schmoozing up to analysts / fundies though - sounds almost indecent eh
https://www.nzx.com/companies/TGH/announcements/290045
Thank you percy.
How about TGH today? Up by more than 0.67% on a above average volume. Similarly, there were good demand for different type of food stocks including chicken stocks globally.
Day's Range: 1.50 - 1.51 52wk Range: 1.50 - 1.80 Volume: 2,067,878 Avg Vol (3m): 689,627
Some days I am slow.Other days I am very slow.Today I was extremly slow.!!
Rang my broker this morning enquiring about the Ingham's IPO.He had no details yet,but thought the intos may have been driving TGH sp lower, so as to make Ingham's strike price lower. He told me to add to our TGH holding.Told him I would see what happened this afternoon.!..lol.
sp up 6 cents or 4%.So have the pass the parcel intos shot themselves in the foot?
The buildup has stoked concerns over a glut of meat, poultry and other agricultural products in the U.S. Producers are on track to send a record number of hogs and chickens to slaughter this year, and beef production is rapidly increasing. Dairy farmers are spoiling excess milk in their fields as warehouses pile up excesscheese. Also, corn, soybean and wheat growers are preparing for a fourth consecutive year of bumper harvests this fall....
http://www.wsj.com/articles/cattle-hog-prices-fall-to-multiyear-lows-on-production-concerns-1475516851
Back to $1.50 - that was a short burst of enthusiasm wasn't it getting to $1.60
Surely can't go any lower - they will not it will they .....but their job of getting it up to $1.90 in December sothey can start selling is getting harder and harder as sentiment sours
Seems sentiment has really turned foul on this one and its hard to see the SP taking flight until the Inghams float is done and dusted.
Private equity tapping the market for so much in such a short space of time on both sides of the Tasman in this sector almost makes me wonder what they know about this sector that punters don't ?
Hopefully the shareholders meeting can turn around the worrying sentiment building. What's the expected dividend percentage for Tegel?
http://www.smh.com.au/business/marke...30-grscgg.html
Any of this sound familiar ? Tegal promotors also sold and leased back significant property before floating.
With the float not set down until November and such a large capital raise on the cards there appears to be plenty of scope for Tegal shareholders to have their feathers ruffled as a byproduct of this Ingham float process.
Want 17 times profit for Inghams - that makes TGH cheap as
Interesting that the promoters are using Costa Foods as a great example of what happens with IPO
Costa their Scales and great IPO - Inghams their Tegal bound to be as well
But then those TPG guys dressed up Meyer to look like Jennifer and that wasn't the flashiest outcome (Jennifer did OK though)
Danger then is is if Inghams are failure Tegel will be tarred with same brush?
Yes yes yes always a lot of noise.
Look I could have gone on and on and on about SCL.I was a SCL shareholder when South Canterbury Finance were the major shareholder.
You would have had to been mad or a Percy to have go near them after that carry on.
As for Meyer and Dick Smith I think I ,and a number of others, posted that they were a train wreck in slow motion.
Lets see what PE these private equity guys really get.
The other thing about forecasts, companies build credibility over time as you know, over many years in fact. Just because the promotors issue a forecast, (huge vested interest anyone ?), doesn't mean its credible.
I for one treat private equity vendor issued forecasts with extreme caution.
I'm interested in Tegal at the right price in due course...but I am cautious and would prefer to see if they can lay a golden egg or two and actually meet next year's forecast first.
One question,from ASB security site NTA is -25cents,i think the private equity firm in order to push down IPO price to $1.55 they have to increase debt leve,seems quite tricky.
Still stalking, still interested.
Attachment 8351
"Inghams Group's initial public offering price range has been set at 13.5-times to 15.5-times forecast profit, sources told Street Talk"
"The company is preparing to come to market with $98.8 million in proforma net profit after tax in the 2017 financial year, up 18.9 per cent on last year. That IPO price range values Inghams' equity at up to $1.53 billion."
Read more: http://www.afr.com/street-talk/ingha...#ixzz4MkwW2ubT
I think Tegel was listed at 15.0? (rock bottom of their range)
If Ingham was listed, like Tegel, at rock bottom of the indicative range, would a ratio of 13.5 implying Tegel to be priced at just under $1.40?
If I have done my math/thinking right (may not have!) Tegel could be still trading at a "reasonable" premium, despite falling under listing price.
Disclosure: Getting more attractive now that we're under $1.50, but still not sure so am not holding.
Interesting article on NBR behind the paywall about the chicken glut in N.Z. at present. Makes me wonder if its really any different to any other form of commodity / agri stock. I use a standard PE ratio of 10 for agri stocks and that's held me in good stead over time. I suppose one could attribute a slightly higher PE because of population growth and maybe a continued shift toward more white meat over more expensive red meat.
Maybe a PE of 12 - 13 is reasonable...but who can say reliably what the E will be !
Why chicken is about to get pricey
Chicken prices are expected to rise.By Christopher Adams
Enjoy cheap chicken prices while they last.
That's the message consumers can take from a sharebroker's report that says a glut in New Zealand's favourite meat will shortly come to an end.
Average prices for fresh chicken pieces were 9 per cent lower in August than in March, according to the First NZ Capital research.
And whole frozen chickens were.........read on....
http://m.nzherald.co.nz/business/new...ectid=11727574
Lot of words before you get to the important part -
The shares recently traded at $1.47.
"In our view this represents a buying opportunity," said First NZ, which has a target price of $2.10 on the stock.
Jeez - potential 40% gain with hardly any risk
They will make sure its over $2.00 by the New Year
I won't get offended but no need to shout (caps)
Prices often get close to where I reckon ..... Can't win them all eh
Vested interest - maybe too excited sometimes, probably from knowing and being swayed by too many guru analysts
At least I am not too outrageous this time around - First NZ Capital and percy seem to be more bullish ....maybe caution is needed
One of the metrics I like about Tegal is the consistent low wage and salaries cost when expressed as a percentage of revenue.
2016 23% and only varied one or two % over the last 5 years except for 2012 28%
OK, just misunderstood
Claris / Affinity must be getting a bit worried - long it stays under IPO price not a good look
From an old article "The private equity firm will be allowed to sell up to 50 percent of its remaining stake before then if Tegel's shares spend 10 straight trading days at least 20 percent higher than the offer price, once the first-half results are posted."
Whatever that means but they will be desperate to get the share price up to $1.86 by hook or my crook. Plenty of good news story coming up I reckon
Given the sudden drop and fall from grace it's started to hold up pretty well so I think it will start to creep up again. The Shareholders meeting next week should answer a lot of questions and I could see it regaining some steam then. In saying that I can't see this going much past $1.60 until the Inghams float is over.
From the IPO docs
Claris, the senior managers, and the directors who purchase Shares under the Offer are subject to escrow arrangements with Tegel under which they have agreed not to sell, transfer or otherwise dispose of their existing Shares (and any Shares issued to Claris or the senior managers under the subscription agreements referred to in Section 2.13.3) until at least the first day after the date on which Tegel releases to NZX its preliminary announcement of its financial results in respect of the financial year ended 30 April 2017.Claris is able to dispose of up to 50% of its Shares prior to this date if the volume weighted average price of Shares on any 10 consecutive NZX trading days following the date on which Tegel announces its results for the half year ending 23 October 2016 is at least 20% higher than the Final Price.
I just read an article in stuff which had a different headline, came across it on facebook.
Chicken the cheapest it has been since 2007
Chicken prices have fallen to their lowest level in nearly a decade.
A kilogram of chicken breasts fell to $13.52 in September, having peaked at $16.60 in late 2014.
Statistics New Zealand said last month's fall in chicken prices meant they had dropped for each of the last 16 months, and were now at their lowest level since October, 2007.
Poultry Industry Association executive director Michael Brooks said the general drop in chicken prices was the result of expansion in the local industry, as the chicken you buy in New Zealand was locally produced.
"With supply decisions being made one to two years ahead, temporary periods of under- or over-supply can occur and affect prices accordingly," Brooks said.
Don't really keep tabs on TGL here's the link for the article, it's from stuff lol http://www.stuff.co.nz/business/8528...een-since-2007
"Covered in winners post #488"
Sorry I bothered.
So when Tegel went through the whole IPO thingy, did the PE firm that listed it disclose that there had been years of oversupply in the market (leading to weak prices that will recover... in theory [hopefully?]) or was this just brushed under the mat while we focus on the ever increasing export opportunities Tegel has to offer?
(I have probably missed something so please excuse my ignorance if this is the case)
Mentioned a few times
Said Fy16 growth would be 'partly offset by the mix effect of increased volumes on major contracts and a supply / demand imbalance on certain products in the domestic channel during FY2016F which is forecast to rebalance in FY2017F"
So all above board and honky dory - punters were told
You should read their book - quite educational even if you not interested in buying Tegel shares today
Well I hope the agm tucka is a bit more exciting than the speeches.
"On track to achieve their PFI forecast for the full FY17,and will update the market on the first half of those results in mid December."
Well looks as though the divie is still on track to be paid in January.
I went to the AGM today.
The tucka certainly did not disappoint! A wide variety of chickens on offering.
There were: various nuggets, golden crumbed tenders, panko & quinoa crumbed tenders, chicken fries, lime and chilli chicken kebabs with an assortment of sauces.
It was all very greasy and I think they ran out of napkins, because I couldn't find any to wipe my filthy hands.
Will post more about the meeting later today.
Would love to hear your thoughts on ghe meeting Percy!
http://www.sharechat.co.nz/article/d...are-price.html
Hard to soar like an eagle when its so heavily weighed down with escrow shares for Africa...
My observations from the Tegel AGM.
They were about to play a video about Tegel's story in the middle of CEO Phil Hand's presentation, but the tech guys couldn't get the video going - there was no sound. After about a 1 minute silence, someone in the back got impatient, muttered he was deaf and told Phil Hand to move on.
Phil Hand was shaking his head at the tech guys in disappointment and moved on with the meeting.
Questions asked by shareholders.
A question about Ighams IPO and how this is affecting the Tegel share price, it's been heading down. And what are you going to do about Ighams and other competition?
James Odgen: Tegel has been dealing with competition for many years and will continue to do so. We aren't in a position to comment on Ighams IPO, Ighams are just doing their own thing. The NZX has gone down by about 7.9% since early September, so it isn't just Tegel share price going down.
The guy replies, but Tegel shares have fallen by about 20%, more than the NZX!
James Odgen: No, Tegel hasn't gone down by that much.
James then tells the shareholder to see one of the Tegel guys for a broker report to assure him of Tegel's worth.
Then they moved on.
A lady asked about chicken feet.
Before her question, she said she paid $1.68 for her shares and was happy with paying a higher price (presumably because she's happy with the company).
What happened to the Tegel chicken feet?
Phil Hand: We are still selling chicken feet. It is a valuable revenue stream.
Will you be exporting chicken feet to Hong Kong?
Phil Hand: Yes that is on the plan.
The lady then goes on to say, don't add condiments to the chicken feet, because chinese people prefer plainer chicken feet.
And if you want the right chicken feet to sell to chinese, check the chicken feet in Hong Kong yumchar, make sure they aren't too big or too small.
James Odgen: I'll get you to meet with a products exec after morning tea to discuss this.
Drew a few laughs in the room.
A shareholder expressed concern about the Affinity excrow of shares, how Affinity will be allowed to sell when it goes over WVAP $1.86 for 10 consecutive trading days after the half year result. And if this sell off will affect the Tegel share price.
James Odgen clarifies the shares escrow period. Afinity own 45.8% and are happy with the company. They won't neccessarily sell their shares when it goes over $1.86.
Another shareholder questioned why Kang Tok Yew and Brett Sutton, why do they not personally hold shares in Tegel?
Kang Tok Yew explains because himself and Brett are fund managers in Affinity and there is a rule in place that doesn't allow them to personally hold shares in Tegel to prevent conflict of interest with shareholders. Otherwise, they would own Tegel shares.
After question/answer time, the tech guys got the video going. Phil Hand comments that the AV guys are doing a great job. A hint of sarcasm? Good that the tech guys sorted it in the end anyway, saved a bit of embarassment of their earlier blunder.
It was a nice video. Gave a good overview of the Tegel story with pretty pictures of their products. 95% brand awareness in NZ and 35% of shoppers will go for Tegel products before their competitor's. All their birds are not caged, free to roam about in the shed or free range outside in the paddock. No birds are injected with hormones too.