Originally Posted by
malus
Hmm…. Dropped back to $9.75 by days end… relatively minor volume for the day, around 1.2m(0.2%) of the company’s shares… but price wise admittedly this equity is stretchingis legs, and so Jim how far do you think it can go is your question to we fellow punters (I’m taking it that you are a fellow punter too?)
Craig’s have it as a buy at $9.63 and are expecting it to continue to grow earnings at around 20% with this year projected at 25 c/share and 2017 at 30c/share. At $10per share that gives us a PE of 40 and 33 respectively.
So what’s changed since BIRMANBOY’s post #32 when he bought in to this equity which he believed well priced because with imputation credits he was the getting a 6.4% dividend return on his holding. Incidentally BIRMANBOY bought at $1.95, earnings were 11.7 c/share, PE around 17. (Lizard rightly pointed out at the time that the Company was paying out slightly more in dividend than it was earning and likely adding to debt in so doing).
Well a major tail wind has been favourable currency adjustments with NZD losing the strength it had back then (also interesting to read the currency comments back when BIRMANBOY purchased). Also, back then, a majority of their earnings were $US.That has changed with sales to 120+ countries (99% of revenue earnt outside of NZ).
The Company has positioned its products well and put the continued R &D effort in to ensure market leadership to the point that they have taken over direct distribution to the their US customers.
Debt is under 10%, net margin around 17%, return on assets 18% and return on equity of 24% (from the 2015 annual accounts)… Warren Buffett likes these in a company he owns, he likes a moat too… but is there enough growth in the company for him topay $10 per share. I think if he were to already own it he would be highly unlikely to sell given the Company’s continuing prospects… but in terms of buying it, would it be on his watch list?… so that begs the question at what would Mr Market have to offer him FPH at given its current prospects?
Perhaps someone like Snoopy might like to have a go at answering that.
I trust that BIRMANBOY still holds and is enjoying the ride!! :)