https://nzx.com/companies/SKL/announcements/286611
More director buying..
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https://nzx.com/companies/SKL/announcements/286611
More director buying..
Match price this morning $1.37 ... spring is in the air and I see higher highs:), assuming the price holds for the day.
Maybe it is the latest PGW announcement ... if others can still make money in agriculture, why not SKL?
Maybe it is the early recovery of mining stocks (well, not up today, but most are now above MA200)?
Maybe the market likes the outcome of the latest milk powder auction?
Maybe the markets see the building industry moving into the next gear?
Maybe the markets just like director David Mair's enthusiasm and commitment for the stock?
Maybe somebody expects a great annual result (or knows more than we do)?
Anyway - I think SKL is well positioned to benefit from any of these phenomena ...
Discl: holding:
Yes, could be any of those reasons, Peter.
Or, maybe the market's got so high that investors are now turning their attention to the laggards and also-runs?
I hold a few.
Well Snoopy me ol mate, how's the hound feeling about this result ? I see they are confident about earnings growth this year....Hmmm How many times did they revise the forecast last year ?
Maybe let's back test that and have a look at what they said about earnings growth with last year's result.
Yet earnings declined this year. I'd suggest their credibility is very much on the line now...if they can't deliver earnings growth in FY17 then they're a no growth stock and deserve a lower PE. (I for one will not be giving them the benefit of the doubt as this hound has little patience for directors that make excuses not results). I suppose its some consolation the size of the dividend feed isn't changing.Quote:
"The economic environment is uncertain, however I am confident that our
progress and plans mean we are well placed to deliver a further improvement
in earnings in FY16."
I guess we need to put this somewhat into perspective. Given that two of the industries they serve are still scratching along rock bottom (Dairy and Mining), do I think that they did very well in achieving basically the same (respectable) result as last year. Revenue up 4%, and earnings basically unchanged.
https://www.nzx.com/companies/SKL/announcements/287383
Share price is as well looking into the future. Mining seems to take off these days (at least that's what the markets believe) and the noises coming from the recent dairy auctions seem to move as well towards "major". Add to that the benefits of the new factory (which we should see in the next financial year) - and happy days should be ahead.
Discl: not excited, but quite happy holder;
Almost exactly the same as 2012 as well.... However, I agree they have shown resilience when some of their end-users have struggled. I like that they are quite diversified and if all their ducks ever line up in a row, they could do quite well (that would be the time to sell I think). Am also holding.
Yes, it's hard to shine when your top two markets are struggling as SKL's are. I'd prefer that they acknowledge that fact and accept that they have limited scope to grow profits until conditions improve.
I agree to a certain extent although downturns and trends present excellent opportunities for businesses to become efficient operators. I currently hold the stock and will continue to (I haven't looked through the report in detail as of yet) but will look closely at management statements in months to come.
Great to see the new director Alan Isaac buying some SKL shares (20k) as well: https://www.nzx.com/files/attachments/242697.pdf;
I guess - he can't leave all the shares to the other directors :cool: - can he?
Sir Selwyn holds already 15.3m shares, David Mair more than 2.2m shares, Liz Coutts nearly 880k shares, Ian Parton 205k shares and John Strowger (another rather new director) 42k shares!
And hey - they all (but John Strowger) topped as well up during the last 6 months or so. I like boards full of directors who not just give lip service to their company but have lots of skin in the game!
Discl: holding as well ... though can't keep up with most of the board members ;);
Not to forget that at the time of the FY15 results announcement the directors were confident of profit growth in the year ahead just like they are this year. How much credibility can one attribute to this year's confidence ?, that's the $64,000 question. Directors buying is no guarantee that they know something shareholder's don't.
Even if FY17 is similar to FY16, i.e no growth, the NPAT and free cash flow will still allow them to maintain the same dividend and still have a bit left over for retained earnings. On that basis I calculate a SP Value of 1.68 With a buy up to 1.45, and hold up to 1.80.
No, not a guarantee - just as directors selling isn't necessarily a sign of impending doom - but it, the buying, increases the odds that things are improving.Quote:
Directors buying is no guarantee that they know something shareholder's don't.
I hold.
Hi Roger ... "tit for tat" for my AIR remarks ;)? Of course are directors buying no guarantee for SP rising, but they hopefully will always know more about the company than even a good informed share holder - i.e. lower risk to buy if they are confident.
I guess if you want to compare SKL and AIR: SKL does not operate planes (i.e. less likely to crash), but more importantly ... they are just lifting off from rock bottom with 2 major customer groups (dairy and mining) both smelling spring air after a long and hard economical winter.
AIR on the other hand just started on the downward cycle.
Again - there are obviously plenty of other differences but industry and position in the cycle (both are cyclical, though);
A good time to swap my SKL against AIR shares might be when mining and dairy are both booming ... and after AIR reached its cyclical low (obviously - I can't guarantee that these two events will happen concurrently, but you can always live in hope).
Not at all BP. I started making some objective observations back in April 2016. The whole market is very fully priced and my 3 cents is this is a classic case in point.
Mining and dairy still scraping along the bottom of the cycle and could be for quite some time. OTOH possibly we've already hit the peak of new competition for AIR ? and with them trading on less than half the forecast PE of this company who's directors guided up at FY15 profit release and then again much later that year and then down 3 times..here's a company that got their guidance so badly wrong compared to AIR's that got it bang on the money first time last year and the year before, that one must truly wonder what credibility to apply to this year's confidence, especially so early in the new financial year, (change their mind many times again this year) ?...tell me that's not at least a possibility mate :p
Sure - everything is possible. However - all major mining stock I am following passed over the last 6 months or so the golden cross ... i.e. market seems to think mining's profitability is increasing. But hey - the market is not always right ... The other thing of course is a significant under-investment into mining (particularly research and preparing new mines) over the last handful of years. Always results in subsequent under-supply and with that increasing prices, but yes, I don't know whether this will be this year, next year or whenever. Obviously - new mines need a lot of new pumps!
Dairy ... well, the latest auctions looked positive, but one or two sun rays don't make a summer. Still - nothing is more effective in resolving an oversupply than low prices, i.e. I am optimistic, but again - an improvement might come through this year (at the moment it looks like that way), but only time will tell. Obviously - the under investment of the last handful of years in dairy farms will mean that farmers will need to replace more milking liners than normal!
We probably should move this bit onto the AIR thread ... so just short. As indicated, possible is anything, but this does not mean it is likely. Cheap fuel and less maintenance for new planes is nothing specific for AIR.
But just to stick with the SKL comparison ... they do have now a brand new factory in Wigram ... maybe this helps them as well to work more effectively and efficiently than in the past?
I would be the last to claim that any forecast is 100% certain (but the famous exemption of death and taxes) and this obviously includes all SKL forecasts. However - just wondering, are you saying that AIR never ever got their forecasts wrong in the past :p? Roger ...?
The current management team have a good record but aviation is a notoriously volatile industry as I am sure you know.
Lets just unpack what was said regarding the forecast and when last year.
20/08/15 Company announces an increased profit of $21.9m and says "I am confident that our progress and plans mean we are well placed to deliver a further improvement in earnings in FY16"
28/10/15 Market Update at Annual Meeting - Skellerup expects strong increase in profit and forecasts $24 - $26M for FY16 based on strong first quarter.
18/02/16 Half year result of a modest $9.6m down from 9.7m in the previous comparable period, (what on earth happened to Q2 financial performance if Q1 was so incredibly robust ?) but still forecasting $23m for the FY16 year, i.e. expecting 2H profit of $13.4m.
29/04/16 Lower commodity prices reduce Skellerup forecast earnings to $20-21m. Really, no kidding ! Commodity prices were low all year, directors would have known that. What changed so dramatically between 18/02/16 and 29/04/16 so as to reduce expectations from a second half profit of $13.4m down to $10.9m ? Commodity prices certainly didn't.
Could it simply be a classic case of company directors needing to learn some basic conservatism with their forecasting ? Whatever happened to the old adage of under promising and over delivering...certainly Sir Selwyn has been around long enough to know about this basic principle of good corporate communication ?
Interesting contrast. When the current directors and senior management of AIR occasionally have issued profit forecasts they have no need to revise them over and over again and have delivered on what they promised. Could this be the reason why some directors win prestigious awards at the Deloitte top 200 business awards and others don't ? :p
The $64,000 question is what credibility to attach to this years confidence of profit growth in the light of what happened last year ? I will leave investors to decide that for themselves but for this hound, I expect better forecasting skills from highly paid directors especially for a relatively stable industrial type company for whom it was well known all year that dairy and mining are scraping along the bottom of the cycle. Fact is at the interim result announcement in late February 2016 the directors were forecasting a 2H profit of $13.4M and delivered only $10.9m, nearly 20% less. Interestingly that $10.9m in 2H compares to $12.2m for 2H last year so Fy16 trading was down over 10% compared to FY15 ? Implications going forward ?
Seeing as their earlier forecasting for profit growth in FY16 was articulated as being based on a strong 2H15 result what does this relatively weak 2H Fy16 performance suggest going forward ? Profit growth confidence misplaced again this year ?
What went so wrong in the second half FY16 compared to the business plan ? Surely this cannot be explained simply by ongoing low commodity prices ?
So, yes, they got it wrong this year - nobody contests this. Was it the worst forecast error ever happening? Not sure, maybe you should discuss this with WYN or RAK share holders ;).
Lets see - so you say on a sample basis of one year the AIR board is forecasting much better than the SKL board and therefore you prefer to hold AIR? Fair enough, if this is your strategy, though obviously one data point is not a trend.
Actually - not even sure AIR's prediction was much better (I remember the result fell well short of analyst forecasts, but not sure, whether analyst expectations have been supported by company forecasts), but yes, they obviously had a spectacular result.
However - one of the reasons AIR delivered well is as well one of the reasons SKL fell short ... both of them didn't expect resource prices to stay that long that cheap. For AIR this is good (lower fuel prices), for SKL this is bad (less income for one of their major customer groups).
So maybe the performance of AIR and the underperformance of SKL is at the end not related to the performance of the respective boards at all? AIR was lucky with fuels staying cheap (and yes, I realise that there are other factors as well) and SKL was unlucky for mining to stay unprofitable for the most recent financial year.
This begs the question ... do you believe resources (and fuel) will stay that low? If you think yes, than staying in AIR might not be the worst strategy (though their competitors obviously benefit as well from low fuel, and the largest margin was obviously during the time when fuel prices went down but flights still have been dear). If you believe however that resources will come back in the foreseeable future, than the better choice might well be different.
Your guess on the future development of resource prices might be as good as mine ...
Good question. I assume that they expected an earlier recovery of commodity prices, but who am I to know. The old Latin saying "errare humanum est" might be applicable as well. Anyway - I might ask this question in the upcoming AGM ...
While you're at it you could ask them what happened to Q2 last year ? For them to say Skellerup expects "Strong increase in profit this year" on 28 October 2015 based on strong first quarter and then report a reduced profit in the first half compared to the year before Q2 financial performance must have been a real shocker !
Then as noted above 2H performance also woefully undershot expectations so in reality it looks like they had a very strong Q1 and then Q2, Q3 and Q4 of FY16 were all poor ! Now in Q1 FY17 and beyond it looks like the currency is about 12% higher and maybe headed even higher and taking into account recent dismal performance exactly what specific factors are directors basing their confidence of profit growth in FY17 on ? Yet another good question for the annual meeting ?
By contrast Air forecasted at the AGM last year $400m plus operating profit before tax for !h FY16, didn't need to revise it and achieved it. At the half year result they forecast $800m plus operating profit before extraordinary items and tax, didn't change the forecast and achieved it with $806m. Not too shabby for such a volatile industry and they were good last year too, so what degree of confidence can investors have that they'll achieve their forecast range this year ?, pretty good chance I reckon.
Keep in mind the old bugbear with exporters BP, Currency. Averaged about 65 cents U.S. for most of last year, now ~ 12% higher, headwind for SKL for FY17 ? What if leading economist Tony Alexander's forecast of high 70's low 80 cents U.S. comes true in 2017, impact on SKL and other exporters ? Anyway good luck with it but know that Selwyn Cushing was buying in volume last year too, didn't translate into any meaningful lead indicator then so why should it now ?
Conclusion - I agree there are some shocking miss's on forecasts with a range of other, shall we say politely "less than blue chip companies" and for that matter some blue chips as well, some worse than SKL but I didn't expect to see SKL to be one of the biggest forecast miss's for FY16, did you ?
Should name this company SKELLAIRUP ;) Some good banter and discussions BP and Roger thanks
So Roger - are you suggesting SKL forecast an extremely wide range (Like AirNZ) so as to hit within that range. The bottom of the Air NZ announcement forecast $400-$600m. The forecast top end is 50% higher than the bottom. Should SKL forecast something similar, say $18m and $27m?.
Looking at the earlier post, with this forecast they wouldn't have needed any revisions.
SKL's forecast of strong profit growth issued in late October well into the year. AIR to the best of my recollection have never issued a forecast this early in the financial year and aviation by its nature far more volatile than what's supposed to be a relatively stable industrial company. I for one am pleased AIR have been so forthcoming with guidance and note by way of comparison that QAN by comparison declined to give a forecast for FY17 other than noting headwinds with competition and yield.
Just a heads-up folks. SKL is being removed from the NZX50 index during the close of trading match process on Friday 16th Sept. Likely to see significant downward pressure by index tracking funds exiting this stock. I also note that ACC who have a superb track record of investment returns have been reducing their holding lately.
Couldn't agree more PT. I'd say its a unique / golden opportunity to top up / buy in if you think the companies optimism about its future prospects is soundly based, (I stand by my previous comments in that regard, see previous page). Fact is entry / exit from the NZX50 can have a dramatic impact on a companies share price as we saw with CVT when it was granted entry and bolted up 20%.
On the other hand there might be a golden opportunity for those with a more neutral view "hold approach" to sell now and repurchase as part of the closing match process on Friday.
Opportunity knocks depending on one's viewpoint. DYOR. Disc Not holding or contemplating purchasing on Friday afternoon.
Hmm, yes - there was a bit of volume in the close of trading, but it didn't really seemed to have a huge impact on the SP. 1 cent down is not too bad for getting out of the NXZ 50 - isn't it? I guess it just shows that people want to own it, not just because it is in the index:p.
In some ways they are a little one dimensional.. Mining.. Dairy.
But in others; worth looking at..
Disc. Hold.
Building in NZ is not going to stop until immigration comes to it's senses..
Where are all of these highly qualified Forecourt Engineers going to get their next job as digital takes over. ??
Automotive.. The top end.. Always some one at the top end wanting to boost their ego's....
Mining/Dairy.. Same boat .. Commodities. Commodities will always be needed. That is why they are called commodities..
Buy in the dips.. IMHO..
Well I 'DMOR' as Roger advised.
Closing price on 12th September (date of Roger's post) was $1.33 (the indicative sell price).
Closing price on 15th September (date of exit from NZX50) was $1.35 (the indicative repurchase price).
Throw in another couple of percent for buy and sell brokerage and I get a total loss of 4.7cps on this sure fire trade. Which only goes to show that no matter how sensible a trading opprtunity seems, there is no sure thing on the market.
SNOOPY
sizeable off market trades going thru this morning, presume its nzx50 reshuffling.
Righto, cheers. I trade with ASB Securities less regularly than once every 3 months but that's good to know.
This gives you trades throughout the day .....for free
http://stocknessmonster.com/
http://www.stuff.co.nz/business/farm...-by-50c-to-525
Looks like the turnaround is coming with share price showing modest gains this week
So, I gets this email that says Wont a 'Annual Report? Tries this link to there or this other link to here.
So, I tries the link to there and I gets a list of reports but the 2016 'Annual Report for this year is a flipping flip book it says. Well, that's not a lot use to me is it? Like I wont to download the thing don't I?
So, I tries the link to here and, blow me, if I don't gets that flipping flip book again. Like if I had wonted that I would have stuck with it the first time right!
So, I thinks this ain't good enough, I wonts to register a complaint, how does I does that?
So, I goes to the front of the website to find the contact us stuff and there is a bit half way down the right hand side that says Latest releases and under that it says Annual Report (flip book or PDF).
Well that looks promising I thinks to myself, I will give it go and see what transpires so to speak.
So, I clicks on it and this box pops up and says do you wont a flip book or a PDF or a Cancel.
So, I goes for the PDF like and then the window goes all back and a little blue line starts wandering across the top of the black from the left to the right and when it hits the right end the Annual Report appears in PDF like from nowhere!
So, I hits the download this to you puter before it goes away again arrowy thing and it says Where you wont it? and I says Put it there with the other ones and it does.
So, thats how you gets what you wants but it is a bit of bother and why they didnt put that in the flipping email in the first place beats me.
Happy Reading
Paper Tiger
SKL expects "consistent earnings".
http://news.iguana2.com/skellerup/NZX/SKL/291496
Last Year at this time of year the board predicted a more significant profit increase than 7% by miles and got it horribly wrong as the year unfolded. At the time of the annual result this year they exuded confidence about a profit increase this year "The Board is confident that we will deliver an improvement in earnings in FY17." Now they're forecasting $20 - $22m, obviously the mid point is $21m just a fraction better than last year's disappointing $20.5m.
Extract from last year's annual meeting "28/10/15 Market Update at Annual Meeting - Skellerup expects strong increase in profit and forecasts $24 - $26M for FY16 based on strong first quarter.
At that time they were projecting at the mid point a profit of $25m and only achieved a very disappointing $20.5m.
Since then we have the above expression of strong confidence in August 2016 of profit growth this year but that has now been watered down to more or less steady as she goes.
In my opinion, beware ! This is is definitely not a company that under promises and over delivers.
I remain underwhelmed. Disc: Don't hold.
While all this is true, the combination of the stated expectation, the strong balance sheet and the almost-completion of the costs of the new facilities, suggests to this amateur plunger that the dividend should be maintained at least for the near term. Happy to be a holder at these levels.
Shiny new factory obviously worth a few cents on the share price.
Hope that translates to a few extra dollars on the profits.
Best Wishes
Paper Tiger
http://www.stuff.co.nz/business/farm...-trade-auction
The new plant might have come on just in time, confident farmers with opening wallets.
Sir Selwyn buys another easy 500.000 shares - wish I had that sort of money.
https://www.nzx.com/files/attachments/248748.pdf
Definitely looks like he puts his money where his mouth is ... A total of 15.7 million shares is probably not even for him petty cash ...
American investment management firm First Pacific Advisors has lodged a Substantial Shareholder's notice, with an interest in a shade over 5% of SKL's shares. A vote of confidence in SKL but nothing more, I hope!
well, looks like you did beat me to it:
US Fund (FPA - First Pacific Advisors : http://www.fpafunds.com/about-us) buying into SKL and issued SSH notice.
https://www.nzx.com/files/attachments/249817.pdf
They do own now nearly 10 m shares (spread about several of their investment funds). Looks like some US investors still see value outside of the US.
Does not look like they are collecting foreign companies ... so I assume its just an investment ...
Good to see a woman (Liz Coutts) taking the Chair on the (still overly male-dominated) SKL board. Interim result out 16 Feb. Like the way they present their reports on their website. Too often online reports are irksome to read.
To get the best you have to be able to select from the best. If the result of your selection is constantly turning up a clearly non-representative sample, then there is some bias somewhere that is excluding potential candidates. That should be understood and addressed, otherwise you cannot hope to get the best.
SKL share price approaching $1.60
hasn't closed at this level since August 2014
The market must have gone nuts
Has there been an upgrade on their 'consistent earnings' guidance of a few months
That said F17 earnings would be about the same (maybe up 7% Selwyn said) as last year
Must be having a record year
4 cents ahead of analyst consensus now and given that no one is picking great growth in earnings for the next few years you have to be in it for the dividend and dream of a takeover bid.
Best Wishes
Paper Tiger
Sorry, just can't resist when looking at Skellerup's nice and steady uptrend.
Remember the (I think more lighthearted) discussions we had 5 months ago (around August 31/ September 1) on this thread about the relative benefits of SKL and AIR? Just pulled a comparative graph showing both stocks - and hey - SKL is the blue line and AIR the yellow one:
Attachment 8629
I know - the discussion was 5 months ago (and the graph starts 6 months ago) ... however given the lines meeting at the time we had the discussion - I think it is a valid comparison. As well - both companies paid since the discussion dividends - and while AIR's dividend was XXL vs SKL just L ... the difference does not make good for the lost capital gain.
I can't help to think that both SKL board as well as AIR management knew exactly what they were doing when the SKL board accumulated SKL shares and AIR management sold their shares as soon as they could get their hands on them. Always pays to watch the share transactions of board and management.
Discl: holding SKL and feeling smug ;) ...
There's no way on earth I would hold the same value holding in SKL as I do in Air, the difference being in the confidence I have in the two companies as a long term hold.
BP does the graph include the 35c AIR dividend?
Read the post ...
but no, it does not. It does not include the SKL dividend either. However - if people insist ...
If anybody would have invested at September 1, 2016 (day of the discussion) $ 10000, this is what they would have by now:
AIR SKL # of shares 4348 7353 dividend per share 35c 5.5c total dividend $1,521.80 $404.42 capital worth (26/Jan/17) $9,522.12 $11,544.21 total value (26/1/17) $11,043.92 $11,948.62
Easy to see - SKL is still winning hands down
Early days to be crowing BP and yes your chart gave quite a disingenuous view. Given SKL's truly appalling record at forecasting that we saw last year, suggest we compare notes Sept 1 2017.
What's that old saying that springs to mind...oh yes, "pride cometh before a fall" :p
Ah well, just look at the numbers in the table above - they include the dividend.
I remember as well various times where AIR was well out of their forecasts .. and made quite ridiculous investment decisions. Actually - the only reason AIR is still around is that the taxpayer is typically paying for their mistakes.
In SKL's favour: they do have a board which trusts in the company they run AND they put their money where their mouth is. As well - they clearly lost over time less planes than AIR :p, no reason to be smug about a less accurate forecast ... but sure, lets keep this wee race running - and hey, I don't say that the tables might not turn at some stage, but by than I am likely to have sold out of SKL;);
Oh dear ... why don't you just enjoy your holding instead of rubbishing fellow posters ;)?
AIR would not have got the money from the banks - wouldn't they? This means this was a high risk investment which well could have been lost.
Yes, great it worked out for the taxpayer in this case, but this does not change the fact that they would be dead in the water if the tax payer would not have put their money forward.
You tell me. The difference I highlighted is that the SKL directors have a lot of skin in the game and are accumulating. I didn't mention the AIR board, but AIR management is selling as soon as they can ...
BT. I wasn't rubbishing "fellow posters", I was saying what was written was rubbish.
And my SKL holding is larger than my AIR holding.
HY results out tomorrow...dipped in my toes on this few days back. Anticipating good result and also commentary from new chairwoman....
And the struggle continues.
No surprises there.!!
Share price sill 20% higher than a year ago
That's good
With ostensibly no growth that suggests either this company is 20% overpriced or the market as a whole is :eek2: Probably just that Overseas fund manager building up their stake and doing everything they can to extricate funds from the "Trump Zone". I think the free business lesson here for the day from the information release is the reminder if we needed it that the currency is really hurting exporters.
Todays 1H report was slightly down on revenue and profits but full year for cast is unchanged.
The company has made very steady profits of around $20mil for the last 6 years, this was through a difficult time were their manufacturing plant in Chch was effected by the earthquake. SKL has recently rebuild there manufacturing plant this is now running to expectation.
All this would have taken a lot of management time.
Chair Liz Coutts said Skellerup’s results and financial position represented a solid performance and robust position and noted the Board and management are focussed on earnings growth.
Any reason why we should doubt Liz Coutts.
Remember SKL has paid about 8% gross dividend the last few years.
Current PE is 14.27 .
...........2015.........2016.......2017.........20 18........2019...thank you www.4-traders.com
eps.......11.4...........10.7........9.8.......... .11.6.........12.4.
The struggle continues.
Maybe a realistic PE would be between 7 and 10,taking into consideration their low debt, and high dividend.?
I don't know.
percy an faster growth would be nice but consistent dividend of 8% gross and the low debt makes me think that the PE at present is ok.
Four Directors of SKL bought shares in the company during the first halve of the financial year which seem to be positive as well.
However its interesting to hear your take on it.
Pretty clear to me its a cyclical company, check the SP from 10 years ago. Talk of growth is just that, talk, it isn't happening and hasn't happened. Talk last year was of profit of ~ $25 which proved to be a nothing but some dream they had at one point. Cyclical companies deserve a PE of no more than 10 in my investment playbook. For what its worth, yes I also acknowledge AIR is a cyclical company. The difference is AIR's PE is half what SKL's is.
Roger there are many ways one can look at this. Air is likely at a different point in it cycle compared to SKL. But if one takes AIR last nine years of NP the average is about $190mil. Using this 9 year average profit will give you a P/E of about 12.3 doing the same for SKL is about 14.3, AIR still better but not by that much.
You are right that SKL for cast have been too positive in the past, however with less distraction of having to rebuild their plant and the comfort as mentioned before of directors purchasing shares in the 1H17 I remain positive.
Forest, not sure including the GFC period and aftermath, (which has a notorious effect on discretionary purchases like air travel), is especially appropriate in any averaging comparison between the two companies.
An interesting exercise you might like to do is to have a look at how the two companies are growing or not as the case may be their top line sales over the last five of six years.
AIR's sales in 2010 were $4.0b, this year well over $5b. Question you might like to consider taking into account all AIR's operational and fleet enhancement efficiency's is this, Is one company growing its business across the cycle and growing top line while the other is treading water and what does that tell you about their relative PE's ?...just food for thought mate, I'll leave it at that and good luck to you.
Agree. The result is only disappointing for people who stopped reading after the first 2 paragraphs. Otherwise - they kept their FY guidance (which is an, though small, increase compared to last year), they have now their brand new factory up and running and their major markets are pointing upwards.
Sure - the high NZD won't help, but SKL is not be the only company struggling with this particular issue ... hits all agriculture, all tourism (including AIR) all manufacturing and whatever else we might have on our stock exchange.
Steady as she goes ...
'As a 'older of some Skellerup shares I am disappointed in the drop in price on the half year result.
It is not off from my expectations and if they achieve the bottom end of full year guidance I will be contented.
Even with the current lower price I do not see it as a bargain, and have no intention of buying more.
But I ain't selling yet.
Best Wishes
Paper Tiger
BP when you say 'Otherwise - they kept their FY guidance (which is an, though small, increase compared to last year),' it could just as easily be less than last years $20.5m
Especially when H1 is 7% behind last year to start with eh
According to www.4-traders.com that [a wee bit] lower is 8.4%.ie eps reducing from 10.7 cents ps to 9.8 cps.
The higher NZ $ is great for the likes of HLG and TNR and has no affect on EVO.
NPAT guidance today was between $20m and $22m. They do have 192.8m shares, which calculates to a lower boundary at 10.4 cents EPS and a higher boundary at 11.4 cents.
And yes, I consider the difference between 10.7 cents (FY1016) and and a lower boundary of 10.4 cents (FY2017) as "wee".
If there are up to date company forecasts I prefer them to somewhat dated 4-trader estimates.
Even at that lower boundary they can still match last year's dividends and still have retained earnings to either reduce debt or aim for growth. Matching last year's dividends at the current price is an after tax return of 6%, equivalent to a taxable return of 9%. As far as I'm concerned that is better than money in the bank. :)
4traders just represents average analyst forecasts which I suspect will be downgraded somewhat after today's interim results.
This time last year with the release of the half year results the company gave guidance of $23m and still forecast profit growth compared to the previous year but only delivered $20.5m which was a material profit decline and a huge miss considering all they were forecasting was the second half, (and that after one and a half months of it having already transpired).
Regarding the analysts expectations apparently differing from company expectations for FY17...food for thought, maybe analysts have good reason to be conservative considering last years forecasting fiasco.
http://www.4-traders.com/SKELLERUP-H...38/financials/ Note average analyst view of divvy yield this year grossed up assuming full imputation credits = 7.82% gross.
Better than money in the bank, yes as long as the SP doesn't go down, but better yield than what's on offer in other cyclical companies ?
Collecting dividends is only one of the factors I look at. I also look to ensure that the earnings support those dividends with some to spare, and that the dividends are not one off, but have been sustained or have grown for some time. Also that the the company is operating on a sound asset base and not overgeared.
SKL - the company that's always gunna to do wonderful things ......but financially it's doing no better now than it was 10 years or so ago .....and the share price today is inflated (as it was in 2006) above reasonable value because punters believe that these gunna things are actually going to happen.
The only way to look at SKL is for its dividend.Yes they have been pretty consistent
But today might not be the best time to buy SKL for it's dividend - a decent capital loss is possible if what has happened in the past happens again.
Here's one of those guru investor charts (forgot his name again) that shows the actual SKL share price and what it would have been if it traded on a PE of 12. Over the time period on the chart the average has been 12 nd it has for many years tracked this nicely - the times the share price has got ahead of itself it has ended in tears. And today is one of those times as SKL is on a PE of 15
Won't comment on the cyclical nature of the SKL share price
Just an update on my morbid fascination of another company that's always gunna do wonderful things but never delivers - Selwyn should recognise this and stop talking about growth (gunna things) and accept that SKL is just a steady earner with no growth over the business cycle that pays a reasonable dividend most of the time.
I believe your post Winner hits the nail squarely on the head.
An interesting chart. But generally when a share is on a cyclical low the PE goes up (because the earnings have gone down) and vica versa. In Other Words, when earnings are high, then the share price isn't bid up in accordance with the earnings, because shareholders know a cyclical earnings fall is coming. So is it realistic to assume a PE of 11 all through the business cycle? I prefer to interpret the chart as saying that we are now at a cyclical earnings low for SKL.
Dairy Farmers looking at profit again, but the extra cash hasn't arrived in their bank accounts yet. Iron Ore producers raking in the money again, but they need to pay down debt with the excess cash first. It will come right. Not too much to worry about where I sit, provided you didn't pay too much for your SKL shares in the first place!
SNOOPY
discl: hold SKL
How does your Dividend thingy work out for Skellerup, Snoopy?
I bet you can get $1.51 at 7.5% gross out of it.
Best Wishes
Paper Tiger