Cracking along nicely...
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Cracking along nicely...
Wow - all this BEFORE the property sale is announced.
Happy days.
I kept an eye on the SP till about 1pm yesterday, when it was still $2.42 so didn't expect much action. Very impressed with the closing price before any significant update too. SKY is different from other shares I used to own, where after significant rise you see a lot of profit taking and it'll typically take a while before SP climbs back up.
Sky is a NZ50 index stock.
Institutions have been hugely underweight the stock for the last few years. That had been the right thing to do as the stock had been a serial underperformer (to put it mildly).
YTD however (with 2 weeks trading to go before year end) Sky has outperformed the index by over 50%!
Now that the stock is starting to perform and indications are that better times are ahead, institutions are imo scrambling to move to at least market weight so that the performances of their funds are not impacted by SKY outperforming the NZ50 index.
Problem for the institutions is that most of the stock has gone to retail punters (many here on ST) and the value funds like Osmium - so they are going to have to pay up to get volume.
So $3.00 looks a realistic level for the sp to level off by June 2022 imo when the property sale, the capital management initiatives & resumption of dividends are likely ro be announced in the next 6 months.
Yes I suspect you are right.
And the further up they push the price by purchasing stock, the bigger percentage it becomes of the NZ50...and so more buying needed to get them to at least maintain market weight.
Then other instos (who are not just blatantly tracking the index) may want to have a touch more exposure given earnings are more certain now, revenue growing and healthy dividends will be paid soon after some kind of capital managent event.
I would not be shocked at all if we hit $3 before Feb 24.
Be great if it hits $3.00 by Feb 24 but I will be happy with $3.00 by June 2022 plus a dividend.
Look at the way that the offer side gets gobbled up when enough volume is available? Classic sign of institutions competing for stock.
Ogg will be feeling rather relieved not to reading this thread?
Capital distribution aside, forget $3.00 per share, the stock should conservatively be around $3.50 per share based on ultra conservative EV/EBITDA comparisons. The insto's probably know this and need to creep without the share price running too hard too fast. Well, fat chance now. The cat's out of the bag. Everyone knows this stock is still significantly undervalued.
Starting to sound like the sp run in August /Sept when everyone here got over-excited?
Don’t forget that Osmium & the other value funds could decide to provide stock & take their profits if the stock runs too hard & too fast.
Steady as she goes is best. $3.00 by June (20% gain plus a dividend) will be an excellent outcome after the market busting gain of 50% so far this year!
Yes, Sky TV should conservatively be valued at $600M based on earnings. That would be a PE of only ~13 or ~8x FCF.
Right now $440M is only a PE of ~10 or ~6x FCF.
Add to this the injection of $50ish million from the property sale and the valuation seems even crazier.
Plenty of scope for the re-rate to continue...but it will go up gradually - kinda like what we saw with NZME (only even higher upside potential with Sky because price to underlying earnings has been way low for a long time in our case).
I think that excitement was more driven by speculation that Osmium would buy 19.99% of Sky like they did with NZME. If they did that it would have pushed the SP up further, but also would have raised more speculation about a merger between Sky and NZME etc.
This sustained price increase is based on the back of a solid earning guidance revision and confirmation that the campus sale is almost wrapped up.
I wonder if the SP would have shot up like this without the share consolidation. Really miss having millions of shares. :p