Hammer formation today. Could be an indicator for the SP bouncing back at the MA 30.
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Hammer formation today. Could be an indicator for the SP bouncing back at the MA 30.
FISHER & PAYKEL HEALTHCARE FY13A FY14A FY15A FY16A FY17A FY18F FY19F FY20F OPERATING REVENUES GENERATED - NZDm 507.3 568.6 644.0 818.5 869.5 1010.0 1175.0 1300.0 Cost of goods sold as a proportion of product trading revenues 58.00% 54.90% 50.70% 44.90% 44.90% 46.00% 46.00% 46.00% Corporate costs as a percentage of trading revenues 24.70% 24.90% 23.18% 25.30% 24.10% 25.00% 25.00% 25.00% OPERATING EBITDA GENERATED - NZDm 87.7 114.8 168.4 244.3 269.9 315.0 370.0 430.0 ADJUSTED NPAT 24.3 37.6 82.0 143.4 160.1 195.0 240.0 275.0 ADJUSTED EARNINGS PER SHARE 4.28cps 6.62cps 14.45cps 25.27cps 28.22cps 34.37cps 42.29cps 48.46cps
Moderate forecast in my opinion and if the market continues with its appreciation towards FPH I could see the below playing out... Can't forecast sentiment.
FPH.NZX - 2016/2021 FY17F FY18F FY19F FY20F ADJUSTED EARNINGS PER SHARE 28.22cps 34.37cps 42.29cps 48.46cps SP AT 52WK FORWARD EARNINGS MEAN OF 35 $12.02 $14.80 $16.96 $18.60
Just playing around here.
me an is mean.
....................................2016.......... ....2017........2018.........2019........2020
EPS www.4tradwes.com.. .25................29.5..........33.3..........39. 2........46.6
eps.growth................................18%..... ......12.8%.........17.7%.......11.7%...........me an/average.15.5%
EPS......Hardt.................25.27.............2 8.22.........34.37.........42.29......48.46
eps.growt.................................11.67%.. ......21.17%.........23%........14.5%...........me an/average.17.5%
Question.What is a fair PE for a company growing between 15.5% and 17,5%.?
The current PE is 37.5.
I would say a lot less then 35. Especially with the looming legal issues.
Agree.
I think we must also remember the current PE is 37.5, which is really thirty seven and a half YEARS current year's earnings.ie nearly 40 years?
Hardt's mean eps growth is 17.5% ,so FPH is trading at present time over twice eps growth.
W69 is correct that FPH has always traded on a PE between 30 and 35.
I would think 50% higher than Hardt's mean 17.5 % eps growth, which would be a PE of 26.25.may be fair or very fair value.
Litigation.Forest mentioned looming legal issues.These are very real and are going to be considerable.Have analysts accounted fully for them?
"An estimate of the financial effect cannot be made".
This in relation to litigation.
The financial effect is a total unknown it seems.
The litigation can be potentially profitable for them if they get payed for infringements or it could be very costly if they have to pay.
Something in between is more likely of course but the fact that the company state that it is not possible to make an estimate is a worry.
What we do know that just over $20mil was spent on litigation last FY and this FY FPH expect the same.
But the real cost might not be the $20mil a year spend on litigation or the possible payout, but the distraction those court cases create for management and directors.
So far FPH seem to be able to handle the distraction of litigation alright but will this continue?
Hypothetically speaking, let's say they lose the formidable rubber strap patent - which is used to fasten the sleep apnoea mask onto patients big ol' mugs... would this bring any operation of theirs to a grinding halt?
A hell of a lot has to go wrong before arriving at the worst case scenario... probability is subjective of course.
All of the broker reports I can see are mindful of the litigation, but have stated that the case itself will have barely any material impact on the underlying operations moving forward...
The litigation is worth a closer look, but the quants are supportive of a strong long term investment even when accounting for a year or two of larger one off costs...
hardt at the last ASM it was mentioned that it is typical of a litigation of this nature to take 10 years to get resolved.
This together with the unknown outcome and longterm distraction and high PE could make FPH a less than ideal investment.
Another way one can look at the litigation is that supplying medical equipment in the US is competing with the big boys and litigation is just a normal part of doing business.
Uncertainty is not enough reason for me to doubt the return on this kind of growth profile.
Sure the sentiment could take a blow, but the material impact would likely be minimal... as we saw the market back in Dec.
The previous lot of litigation thrown out by RMD was kaka, I can always re-evaluate when RMD file their next one.
I have been moderately generous with the litigation costs in the following years...
FISHER & PAYKEL HEALTHCARE FY17A FY18F FY19F FY20F CAGR OPERATING REVENUES GENERATED - NZDm 869.5 1010.0 1175.0 1300.0 14.35% LITIGATION COSTS - NZDm 20.0 25.0 30.0 35.0 * Litigation costs as a percentage of trading revenues 2.30% 2.48% 2.55% 2.69% * OPERATING EBITDA GENERATED - NZDm 269.9 310.0 370.0 430.0 16.79% ADJUSTED NPAT 160.1 195.0 240.0 275.0 19.76% ADJUSTED EARNINGS PER SHARE 28.22cps 34.37cps 42.29cps 48.46cps *
The stock has performed well enough so far, watching closely as it runs along.