Friday, July 2, 2010

Long Term View: Michael Hill International Ltd

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Michael Hill International [MHI.NZ] has been a spectacular investment for those who have been shareholders since its listing in July 1987 at 65c and even better for its founder Michael Hill who established the company with one store in 1979. We will use financial data from 1996 to make our comparison. (Figures for 1987-1996 are not easily obtainable so annual and overall returns are likely to be higher)

With $1.85c in net dividends (excluding the NZX listed period 1987-1990. No data can be easily found for dividends) and 30% more in tax credits (see chart above) plus 5 share splits; two 11:10 in 1990, one 11:10 in 1991, one 11:10 in 1992 and one 10:1 in 2007 gives MHI a slightly more than 1415% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends and tax credits in its calculation) over the nearly 20 year listing of MHI (again, the period between 1987 and 1990 is excluded because no share price or dividend details are available so the return will be higher than stated here for this period), an approximate annual net return of over 70%.

This is approximately a 470% better return when compared to the average of all NZX indexes.

Disc I own MHI shares in the Share Investor Portfolio

Long Term View Series

Auckland International Airport
Air New Zealand
Briscoe Group Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Mainfreight Ltd
Metlifecare Ltd
New Zealand Refining Ltd
Port Of Tauranga Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd

Michael Hill International @ Share Investor

Hill Family makes Clayton's Takeover bid for Michael Hill International
Michael Hill International: 2010 half year profit commentary
Michael Hill Makeover kicks off
Michael Hill International: 2009 full year profit commentary
Toughen Up: What I have learned from the hard times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
Michael Hill takes on the windy city
Why did you buy that stock? [Michael Hill International]
MHI has defined growth strategy
MHI profit sparkles

Discuss MHI @ Share Investor Forum

Download MHI Company Reports

Buy Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up -

c Share Investor 2010