Wednesday, May 20, 2009

Schroder Investment Management takes big Fisher & Paykel Healthcare Stake

Back in August last year I wondered whether Schroder Investment Management, a large multinational investment company, had added to their large Fisher & Paykel Healthcare [FPH.NZ] shareholding (they didn't) but they have been making large share movements in that area this year.



After ditching about 25% of their holding on March 19 (PDF) to take their position to 4.7% of total FPH shares issued, today in an NZX disclosure (PDF) it was revealed that Schroders have taken their holding to just under the magic 10% mark, their biggest shareholding in the company to date.

I make no bones about it, I see this company as one of the NZXs stars and pick it as one of the best long-term performers for the next ten years if the last ten are anything to go by. Having Schroders take such a large stake certainly gives pause for thought that I actually might have known what I was doing when I bought shares in the company but as I pointed out in that August article Schroders share the same investment style that I do so it is no surprise that both of us would make the same pick:

We are long-term investors: establishing the fair value of a security takes the discipline to avoid being caught up in market fashions and the confidence to be contrarian when necessary. We focus on the ability of a business to generate sustainable value and earnings growth. We look at the quality, as well as quantity, of earnings and we meet company managers and ensure that we fully understand their marketplace and business strategy. We believe that, over time, the mis-pricing of stocks versus fair value will be recognised by the market, and that our long-term approach to research will lead to long-term outperformance.

Having said that, Schroders did sell a small portion of their holding in March and I have no idea as to why (one can only assume for a short-term profit) but increasing their holding to just below 10% is certainly an interesting move.

As their statement above suggests they have been buying FPH at relative bargain prices compared to historical values and to be sure any serious "mis-pricing" of this stock in comparison to its concrete revenue and profit results will see this small shareholder take advantage of that situation.

Fisher & Paykel Healthcare will be reporting its Full Year 2009 profit results Tuesday May 26, 10.00am (NZ Time) - A conference call will be held at 1.00pm to discuss the results and you can listen to it here.

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Related Links

Schroder Investment Management Australia
Schroder Investment Management Home

Fisher & Paykel Healthcare financial data


Related Amazon Reading

The Business of Healthcare Innovation
The Business of Healthcare Innovation
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c Share Investor 2009