Sunday, January 31, 2010

VIDEO - Simon Moutter on Australian Airport Purchase


Source: ONE News, Thursday January 28, 2010.

Auckland International Airport [AIA.NZ] CEO Simon Moutter discusses the airport's strategy following its $166 million purchase of a stake in two Australian airports and its $126 million share offer announced on Wednesday.

Please keep in mind that Simon was the chief operating officer at Telecom New Zealand [TEL.NZ] for 12 years before becoming AIA CEO, so he and his cohorts at Telecom have a track record of a massive failure in Australia already with Telecom's ill fated purchase of AAPT, which continues to have negative financial ramifications for the Telco and its shareholders to this day.

He keeps talking about the Australian Airport as a "step out" from the ports main asset, their Auckland Airport asset.

As an AIA shareholder I don't feel as positive as Simon about our purchase and feel a little nervous considering all the business jargon he is using to explain his reasons for the buy.

Just a footnote, the new share issue at NZ $ 1.65 could provide the opportunity for new AIA investors to get in cheaper than the closing price last Tuesday of $1.92 as the share price finds a new level post capital raising.


Related links

Download the AIA offer prospectus and associated documents here.


Auckland International Airport @ Share Investor

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c Share Investor 2010

Wednesday, January 27, 2010

Auckland Airport Capital Raising a fair call

The announcement today that Auckland International Airport [AIA.NZ] is going to raise NZ$126.4 million from shareholders to pay for two hick town airports in the middle of nowhere in Australia should be no surprise to AIA shareholders.


AIA defends its Australian airport purchase

The airport borrowed heavily to fund the purchase and now shareholders must take the brunt of what I see as a poor decision and bail out AIA directors who apparently have money to burn or risk having their share holding diluted - boy I am going to have to eat dirt if this buy is a success.

Anyway, bad business decisions aside, the structure of the capital raising doesn't look half bad.

Allocations of new shares will be attributed on the basis of one new share for every 16 shares held and no extra shares will be given to institutions or any medium sized shareholder will be scaled down their allocation. Every shareholder big or small will be treated in the same manner and for that management should be handed a bunch of fresh pansies. This approach contrasts the many capital raisings of 2009 which favoured smaller and very large shareholders but largely ignored medium sized players like myself who had no choice but to have their shareholdings diluted because of an inability to get a proportional allocation of new shares.

Incidentally AIA is a small shareholding in the Share Investor Portfolio and at 5000 shares my entitlement will come to 312 shares, of which I will take up in full. At NZ$1.65 per share the cost to me will be just over 500 bucks.


The only gripe that I have (I am only happy when I am moaning) is at $1.65 it is a pretty hefty discount to Tuesday's closing price of $1.92.

The capital raising will be fully subscribed.


Related links

Download the AIA offer prospectus and associated documents here.


Auckland International Airport @ Share Investor

Auckland International Airport lands Australian Ports
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Is another Auckland Airport bid likely under a business friendly Government?
Latest Airport coverage
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

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c Share Investor 2010

Tuesday, January 26, 2010

Economy 2010: Taking the long way

Further to a post I made yesterday about opportunities to buy cheaper stocks, I touched briefly on the state of the economy.

Let me expand on that if I may today and we will forget it again for another 6 months, because I know it is easy to bitch and moan about this stuff as I have done on a number of occasions.

In my opinion the current economic downturn is going to take years to recover from. We have seen a relaxing of the fervour that started in September 2008, following the collapse of big financial institutions the world over and since then we have had an apparent lift in confidence due to trillions of dollars of borrowed and the printing of currencies (cheers China!) and a subsequent lift in various financial indicators; slow down in jobless growth, small GDP growth, global trade improving, etc, etc.

As I said above though, this move towards the positive is based on borrowed money and it has to be paid for, eventually.

As many of you will know, including myself, a mortgage like that can be hard to pay back when your income might now be less than it once was and while you are paying that back other forms of spending will be cut back and clearly that impacts on the economy. This huge unprecedented debt is going to constrain the economy in New Zealand and in every other country deep in debt. Even China, who is the lender, will be impacted because we wont be buying as much of their quality produce - only a hint of sarcasm there.

Most of us, but not all, will need to be prudent to survive the next 5 years. Cut back where we can and pay down debt if and when we get the chance. More debt taken on during this time will merely postpone the inevitable hounds at the door. It aint hard, it just takes some discipline.

While we are not in a 1930s depression era economic downturn, we are going to suffer, I think, economically for as long as those folk in the 30s did, in our own way. Constraint, low or no growth and inconsistent and unsustainable upturns will be the order of the day, until that debt is discharged.

There are also other shocks to come from the heady days of economic growth during the 20 years pre 2008. Complex derivatives failures and commercial property shocks look set to come and spoil what confidence we may have gotten back.

This is all part of the economic cycle however and is nothing new and there will be opportunities to buy as others must sell cheaply to pay down debt levels.

On that last positive note, for me anyway, I will bring an end to my gloomy outlook - see you back in 6 months for an update.


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c Share Investor 2010

Sunday, January 24, 2010

Market Correction: Excitement Building!

Once again global stockmarkets are rightly nervous about the so-called economic recovery in the United States, with Obama acting like Robin Hood without an arrow and rumblings of credit clampdowns in China, the DOW has lost almost 5% in one week as a result.

It is bloody exciting!

I was getting sick of the disconnect between the reality of a debt led "recovery" and the fantasy of investors in stockmarkets like the DOW, who have pushed that particular market up by over 40% in less than a year -incidentally that is the largest bull run since the 1929 Wall Street crash and we know what happened after that particular market "recovery".

Yep 40%, does anyone think we are doing that much better now than we were this time last year?

Not this fellow.

I last bought stocks in July and haven't felt tempted yet until The Warehouse Group [WHS.NZ] shares took a dive recently, simply because some companies are overvalued compared to 12 months ago.

The excitement is building now for me as there looks like reality could have dawned on some and they could be rushing for the exits as I am happily ready to enter the market again at a better price.

One the economic outlook, there is anecdotal evidence on my part - I tend to trust that more accurately than what economic soothsayers are being paid to say - that the economy in New Zealand, while not completely buggered, is still hanging on a knife edge between growth and recession and it appears that any growth is going to be sporadic and a long time coming.

There just isn't any money out there.

A good time to buy assets if you do have some moola and the NZX is likely to take its lead from the US market where it dropped by over 200 points last Friday.

Happy buying.


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c Share Investor 2010

Reason to be cautious on Nuplex forecast

2009 was Nuplex Ltd [NPX.NZ] worst year on record, with a massive capital raising big losses and a huge dilution of value for their shareholders.

2010, according to Nuplex, is going to be their best year on record with an estimated profit of between NZ$120-135 million. This is after 3 profit upgrades in the last 6 months.

This is good news for the company and as shareholders you might be thinking that and you are probably right to think that but then I believe you must treat these results with an element of caution and this is why.

Like their worst year in 2009, management did not "foresee" that coming and according to managing director John Hirst the 2010 upgrade has been:

"...proving as difficult to forecast the upside of the post global financial crisis period as it was the downside at this time last year..."

In addition to management's inability to forecast accurately, their current forecast is expressed as, earnings before interest, taxes, depreciation and amortization (EBITDA). This measure of accounting practice can be used to hide detail that should be known by the shareholder and is pretty much the accounting equivalent of hiding nuts under shells. Unfortunately it is used far too often by lazy, ineffectual accountants directed by lazy dishonest directors to hide bad figures from shareholders - look deeper Nuplex shareholders!

Given the inability of the company to accurately forecast results over the last 2 years and also given that the same management who governed the company into their worst ever year in 2009 and left them on the brink of bankruptcy (they would have gone down the tubes if not for generous shareholders) are still at the levers of power, one would have to take a closer look at Nuplex forecast for 2010, especially when one considers their "cavalier" attitude to accounting practices and therefore their shareholders .

Beware.

Nuplex @ Share Investor

Nuplex rights decision a dilemna for shareholders

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c Share Investor 2010

Thursday, January 21, 2010

Cadbury Acquisition a good deal for Kraft

I am still following the Kraft Inc [KFT.NYSE] acquisition of Cadbury PLC [CBRY.LSE] . A conditional deal for sale of Cadbury to Kraft has been approved by Cadbury management but it still needs the approval of both Kraft and Cadbury shareholders.

Nearly 10% shareholder of Kraft, Warren Buffett, publicly came out against a deal on Jan 5 and today on CNBC indicated that he would have voted against the acquisition.

The latest comment, if it isn't just being made to blow off some steam, appears to suggest that Kraft is paying too much for the maker of Dairy Milk, Jaffas, Chrunchie , Moro and other well known brands but this is where Buffett and myself part company.



Cadbury is a global brand and has dominance in the majority of the markets that it operates in, New Zealand is no exception.

Because of its strong brand position globally, its potential to grow in all its markets - especially in Asia - and the largely untapped market for Cadbury in the United States -where Cadbury is a minor player - the price to be paid for full control of the company must show a healthy premium to its recent trading activity. Cadbury has a strong economic moat - good brands, with high cashflow with a reasonable barrier to entry by competitors.

Warren Buffett seems to be ignoring this fact and it seems contrary to previous indications by him that in order to gain control of a company during an acquisition a premium is more often than not paid.

The price being paid by Kraft for Cadbury isn't the deal of the century but it is approaching fair price - on Kraft's part - considering what Kraft are getting for their shareholders moola.

Locally, New Zealand media have been speculating that Cadbury's Dunedin factory maybe the subject of staff cuts and that local brands maybe for the cut. While this is of course possible because of Kraft's high debt levels due to the acquisition and pre-deal debt levels, it would be folly on Kraft's part to repeat the recent mistakes of Cadbury in New Zealand and in other global markets.

I am having sugar overload over this deal. The Kraft acquisition of Kraft is not yet a fait a compli however, so there is still room for a diabetic attack. There is still time for other Cadbury tyre kickers like Hershey to make a higher bid for some of the sweet brown stuff.


Cadbury @ Share Investor

Bitter - Sweet Chocolate Business
Cadbury could learn a thing or two from 1980's Coca Cola Experiment

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c Share Investor 2010





Tuesday, January 19, 2010

Stock of the Week - Reprise : The Warehouse Group



In this Stock of the Week we are going to be looking at New Zealand's dominant general retailer The Warehouse Group [WHS.NZ].

I picked it in June 2009 as a Stock of the Week and am including it again in 2010 for much the same reasons.

It has been trading at a pretty steady share price for the last 12 months (marking time until news about its sale is forthcoming) at a range between NZ$3.00 - $4.55 and represents value whether you want it for a quick buck for its probable sale or if a sale falls through and you want a good solid company for the long term portfolio.

It approached around the middle of that range, closing at $3.88 today.

On its long-term merits the company has a dominant position in its sector of the retail market and a great cash flow that helps contribute to a gross dividend north of 8%. Spectacular in these days of 3-4% returns for term deposits or 5-6% for rental property.

Retail is struggling these days but that isn't going to last forever and The Warehouse is coping well with the current recession. It historically does well in recessions because of its low price perception.

Its 2009 Christmas trading period was flat in terms of sales and that is no surprise as other retailers experienced similar trading. The key will of course be the margins.

The company has recently met its own forecast for profit in its October release of its 2009 full year profit (see 2009 annual report for details) and its forecast for FY 2009 is on track to meet last years profit of $90.76 million.

I am looking at taking the plunge again to add to my holding.

Good luck!

Disclosure - I own WHS shares in the Share Investor Portfolio

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The Warehouse Group @ Share Investor

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c Share Investor 2009 - 2010

Sunday, January 17, 2010

Bitter - Sweet Chocolate Business

The scramble for a king-size block of Cadbury PLC [CBRY.LSE] by Kraft Foods Inc [KFT.NYSE] fascinates me. I love business and investing but I have to confess also to be somewhat of a chocoholic - doctor it has been 3 minutes since my last bite. In a protracted bid that has been going since a formal offer by Kraft was made in November 2009 after it telegraphed interest in the Dairy Milk maker in September the takeover process has been full of harsh words, threats, finger pointing and egos from all sides of the chocolate vat.

Since then Kraft has been rebuffed twice by Cadbury and those harsh words have been flowing like Cadbury Creme eggs between the CEO'S of Kraft and its sweet milky target Cadbury. Meanwhile Kraft's biggest shareholder, Warren Buffett, has issued a press release urging Kraft not to pay too much for the company.



In this sickly mix of nuts and fruits comes interest from just about every major chocolate company in the world. Ferrero Rocher, Nestle', and Hershey have all been on the radar but all seem to have been dismissed as having short pockets or not serious, save for Hershey which seems to be mulling over a formal bid of its own according to some sources.

The problem for Kraft is that Cadbury contend that its shares are worth more than what they are offering and Kraft's bid significantly undervalues the long-term prospects of the company and they will have to increase their bid before the January 19 deadline if they want to take a chip off the Cadbury block.

I have to agree with Cadbury. The company has a strong presense in most parts of the world and its brand and products - no matter what some might think of its sweet milky almost chocolate free taste - dominate the minds of consumers and their sweet ways when they make a decision to buy a quick convenient snack.

This brand awareness has made Cadbury one of the worlds most successful chocolate makers in the past and that is unlikely to change any time soon.

For these reasons alone Kraft need to raise their offer and any other company considering a move on Cadbury must also take into account the company and its fine pedigree.

Warren Buffett, as a 10% holder of Kraft stock, was against Kraft's bid principally because of its intention to issue new shares in Kraft to help pay for the purchase. I have just been reading Warren Buffett on Business: Principles from the Sage of Omaha, a collection of Warren Buffett's letters to Berkshire Hathaway shareholders and he makes it very clear in a number of his letters that he is against the dilutionary effects of such transactions for the predator company if it doesn't present value for the predator. Of course the price paid for the company is a key factor as well and if the price is right for the takeover then the preferred option of purchase for Buffett is cash and preferably non -borrowed cash at that.

Cadbury would be a great company to own. Good cash flows, strong brands with a competitive moat and profit to boot.

Any suitor will have to pay a premium to take control of the purple one and Buffett has stressed he doesn't want Kraft to be that suitor but if he wants a piece of it - and I think he does - then Kraft and any other buyers are going to have to sweeten the deal beyond the current valuations put on Cadbury's assets.

I cant wait for the next move!

Cadbury @ Share Investor

Cadbury could learn a thing or two from 1980's Coca Cola Experiment


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c Share Investor 2010

Friday, January 15, 2010

Share Investor's 2010 Stock Picks

This article was originally published 13 Dec 2009

Fishpond

It is that time of the year, to pick stocks for 2010 and time for my stock picking monkey to come out of a self imposed 12 months hiatus for another stab at the stockmarket pages.

It is a bumper edition this year and I started it 1 week ago in between feeds for my time consuming wee girl - she had no say in what the stock picking monkey chose this year but could be encouraged to throw a dart or two at the end of 2010.

In the face of a global recession, an uncertain economic future that had a big impact at the end of 2008 and continues today, with dwindling share values, even for good assets, it is going to be hard to pick winners for next year.

2009 was a tough year for stocks, perhaps one of the worst in a generation

Please keep in mind dear readers that the picks are my own and they reflect my investment philosophy and not necessarily anyone else's.

My picks are based on a long-term view, regardless of the current short to medium term market turmoil and economic uncertainty.

NB: Since I think most of my portfolio consist of the best stocks on the New Zealand market, I found it difficult to pick stocks outside my realm of self interest.

Picks from the NZX

Fisher & Paykel Healthcare
[FPH:NZ]

Image

I will kick off my picks with a company that I consider will be one of the big successes of the next 5-10 years and one I included in the 2008 and 2009 Share Investor stock picks, Fisher and Paykel Healthcare, the health care products provider.

I had it as a pick for 2009 and it has been one of the better performers this year, as it was in 2008, even though it is still well off its highs share price wise.

Company profit forecasts to March 31 2010 have been estimated at NZ$65-70 million - which is down from 2009 - and revenue is also set to grow as it has done for the past decade.

Any significant movement in the value of the NZ dollar means a substantial rise or fall of profit, as the bulk of company revenue are in the US dollar.

Fisher's profits are largely immune from the current market turmoil as buyers simply have to have the products that the health care company makes regardless of a global recession.

A future global player in the sector they operate in.

Fisher & Paykel Healthcare @ Share InvestorStock of the Week: Fisher & Paykel Healthcare
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Fletcher Building Ltd
[FBU.NZ]

Image

Fletcher Building has had a tough 2009 and 2010 looks to be a similar year but there is promise in the winds through a shortage of new housing stock in New Zealand and Australia and a large number of infrastructure projects on the go in New Zealand and across the Tasman and a similar list on the books ready to start.

The commercial sector will be a problem for the company but that will be an opportunity for prospective investors in Fletcher to get cheaper stock based on bad news for this sector.

Management haven't given much indication of profit for 2010 except to say that they are happy with analysts indications to the market of NZ$261-340 million. At their Nov 2009 AGM Directors indicated uncertainty in their business for the coming year.

Accumulate on share price weakness of which there will be for this stock in 2010.

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The Warehouse Group
[WHS.NZ]

Image

Retail has been tough in New Zealand and globally over the last 16 months but there are signs that retail in NZ is on the improve.

The Warehouse has had a year of stagnant growth but has seen a slight improvement over the last half year when it even advanced a special dividend to its shareholders.

This confidence by management will only be underpinned by tangible results over the all important 2009 Christmas shopping period and any increase on last year will be a sign that improvement could be on the cards for 2010.

This stock is a good long term play and any increase in sales and cashflow will benefit shareholders with increased dividends.

An added bonus is that the company is still in play to some extent pending a decision by either Foodstuffs or Woolworths Australia making an official bid for the company.

Accumulate on weakness.


The Warehouse Group @ Share Investor

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Discuss this topic @ Share Investor Forum - Register free

Sky City Entertainment Group
[SKC.NZ]

Image

Sky City Entertainment has had a great 2009, with increased FY 2009 profit at the hands of an inspirational leader and a number of strategies planned and executed to produce pleasing results for shareholders. The share price of the company has not however tracked its increased fortunes, plumbing the depths of below NZ$2.50 and settling of late in the low 3 dollar range.

There is promise however for 2010. The loss making cinema division is set to be sold in February with almost $60 million to be returned to the balance sheet in some form - either a special dividend or a paydown of debt.

Momentum from paring back running costs has been built up over 2009 and in addition to that a capital raising and paydown of substantial debt has left the balance sheet open to more flexible capital management during 2010.

Look for improvements in profit during 2010 based on the above and once again buy on weakness if this company has already been in your sights.

Sky City Entertainment Group @ Share Investor

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Xero Ltd
[XRO.NZ]


Xero Ltd is a company in a state of transition. At present this online accounting software company is a niche player in an industry dominated by global players like Quicken and MYOB and appears to be gradually increasing its customer base among a very loyal following of clients.

Those in the tech industry who know intimately what the company does and how it does it say it is a company to look out for and that it could be well a big player in time to come. I have no idea whether that is true or not but the buzz created by this company within the industry is something that should be taken notice of.

It has yet to make any money but those in the know say it is close to breaking even and should start to see some profit in the next few years.

It is presently building its customer base to get "critical mass".

If those insiders are right 2010 could be a good year for this company and early buyers might be in for a windfall should the company succeed.

Buy on weakness and if you are ready for a bit of risk with a 50/50 shot.


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Xero @ Share InvestorStock of the Week: Xero Ltd
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Contact Energy Ltd
[CEN.NZ]

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Contact Energy Ltd has had the year to end all years in 2009, with their FY profit in 2009 down by 50% to NZ$117 million. It has been a stinker but there is sunshine on the cloudy horizon.

A CEO gaffe at the end of 2008 led to the loss of over 40000 customers and weather was also against the company, affecting bulk power prices and increasing running costs because of the use of more expensive generation.

These things are unlikely to occur again in 2010, more customers have come back to Contact and management appear to be focused on cutting business costs. Management will give no indication of 2010 profit but it is likely to be higher than 2009 unless something unexpected should visit them.

With the share price at the time of writing well below NZ$6 the company is a relative bargain considering its long term prospects for growth and the possibility that the company is still a target of Origin Energy Ltd [ORG.NZ], its Australian majority owner.

Buy on weakness should you be interested in any listed NZX utility.


Contact @ Share Investor

Stock of the Week - Reprise: Contact Energy Ltd
Not so fast Davy Boy
Still Watching Contact Energy
Beam me up Davy
Stock of the Week: Contact Energy
MarketWatch: Contact Energy - June 2009
MarketWatch: Contact Energy - Jan 2009
Contact Energy looks bright during dark times
Share Investor's 2009 Stock Picks
Follow the Monopoly Board

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Mainfreight Ltd

[MFT.NZ]

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Mainfreight is a dominant player in the logistics sector in Australasia and has businesses in North America and Asia. It has designs on becoming a global logistics player and has surpassed 1 billion in revenue this year. It has a stated aim of doubling in size over the next 3-5 years.

It is one of the best managed companies listed on the NZX.

Mainfreight has had a bad 2009 by its own admission, with profit significantly down and its share price has suffered as a result. There were signs in the last quarter of 2009 though that things were picking up and Mainfreight is likely to a benefactor of any improvement in global trade, especially in their United States operations.

2010 is by no means going to be one of the best years for Mainfreight but it is more than likely that they will come back stronger than any other business sector if global trade improves as they were one of the first and hardest hit when the downturn came.

Mainfreight is a good barometer as to the health of the rest of the economy and if you are looking for one of the best long term investments on the NZX this is it.

Buy on any weakness with a view to hold a minimum of 5 years for superior returns.

Mainfreight @ Share Investor

Share Investor Interview: Mainfreight's MD Don Braid
Stock of the Week: Mainfreight Ltd
Questions to Mainfreight's MD Don Braid
I'm Buying: Mainfreight Management delivers the goods
Mainfreight Annual Report Packs a Punch
Analysis - Mainfreight Ltd: FY Profit to 31/03/09
Mainfreight VS KiwiRail: The Sequel
Long VS Short: Mainfreight Ltd
Why did you buy that stock? [Mainfreight Ltd]
Mainfreight 2008 Annual report worth reading
KiwiRail will cost Mainfreight
Mainfreight keeps on truckin
A rare breed
Share Investor's 2008 stock picks

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Picks from the ASX

Caltex Australia Ltd
[CTX.AX]

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Caltex Australia Ltd is Australia's largest refiner of oil and oil based products and has one of Australia's largest networks of filling stations.

Its share price has suffered over 2009 but the company still remains a dominant player in its sector with good long term potential for recovery.

The retail sector for petrol in Australia is undergoing consolidation at the moment and Caltex could be set to benefit if its bid for Mobil retail sites in that country can overcome competition watchdogs.

Buy on weakness for good long term gains.

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Coca Cola Amatil
[CCL.AX]

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Coca Cola Amatil is the dominant player in the carbonated drinks market in Australasia. It sells its iconic Coca Cola brand as well as a large number of other well known brands in New Zealand, Australia, Indonesia, Fiji and a number of other markets in this part of the world. Their 5 year financials to 2007 show a steady increase in revenue and profit and their 2008 Annual Report shows a record profit of just over AU$ 400 million on strong revenue growth.

A strong history of profits can be a good sign that there is more to come in the future and the fact that its customers are largely addicted to its products makes this company a great long term bet.

Buy on any weakness for superior long-term returns.

Coca Cola @ Share Investor

Coke is it!

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Domino's Pizza Enterprizes Ltd
[DMP.AX]

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Domino's Australia has had a great 2009. It increased store numbers by 35 to 776 and also increased profit in 2009 by 29% to AU$15.4 million.

DMP is the dominant pizza chain in Australia and New Zealand and has grown considerably since its May 2005 listing on the ASX. The company also has 250 odd stores in 3 European markets.

While the company has been growing well in Australasia during the global recession their stores in France, Belgium and the Netherlands have been powering ahead.

Same store sales have increased across their various markets and costs have been carefully managed.

Management have an aggressive approach to expansion and have manged to achieve this growth without incurring any significant debt or diluting the all important same store sales.


Dominos @ Share Investor

Dominos poised for another slice of Pizza Hut
Domino's Australia Dominant in Australasia
The dots get the hots

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Other notable quotables

NZX

Auckland International Airport [AIA.NZ] A good monopoly at historically cheap prices.

Kathmandu Holdings Ltd [KMD.NZ] A new listing from end of 2009. Value below NZ$1.50.

Port of Tauranga [POT.NZ] New Zealand's leading port company with good upside on increased exports.

Michael Hill International [MHI.NZ] A very well managed jewelry chain poised for global expansion.

New Zealand Refining [NZR.NZ] The country's only refiner of oil products, it is currently having a bad second half year. The share price should recover on a lower Kiwi dollar and therefore better margins, an increased global demand for oil and refurbished, expanded plant closed in September 2009.

Telecom NZ [TEL.NZ] Value in the company as a hedge against investment inflation. Dividends are over 10% net PA at current share prices (low NZ$2.30 - 2.50 range) and stock worth buying at these low levels for the return and a possible recovery in share price.

Nasdaq

Yum ! Brands Inc [YUM.NASDAQ] A target of 10% sales growth for 2010 after a 15% profit growth in 2009 and more good growth to come from China make this company a tasty treat.


Conclusion

2010 should be a better year for stocks than the anus horribilusness of 2009 although it is by no means any guarantee that a good year should follow a bad one except to say some confidence seems to have entered the stockmarket, albeit with a tinge of nervousness over the uncertainty of what is exactly happening to the global economy - is it getting better, or is it going to get worse, who the hell is right?

I think there is more bad news in relation to the global economy to come, but that is only my opinion.

That aside if you can, some listed companies have done well in 2009 and will continue to do so in 2010 but others will find the going tough as credit lines are exhausted and interest rates rise.

There are a number of companies that have had a poor or hum drum 2009 and any real upturn in the global economy will see a better 2010.

If there is no upturn in the economy, stockmarket share price weakness will have me poised to buy further shares in some of the companies I own in the Share Investor Portfolio with any surplus cash rather than with borrowed funds. I am also looking at buying Coca Cola Amatil [CCL.AX] and Yum! Brands [YUM.NASDAQ] shares on weakness, which would be my first foray into international shares - 1000 Coke and 250 Yum!

Remember, the stocks I have picked above are based on my investment criteria and may not fit yours or of course you could have a different opinion. I would love to hear your opinion and any picks you may have.

Have a look at what I have to say, take it on board or not and then do your own research to see if you might agree with me.

Lastly, I wish you all good luck and a prosperous 2010, we could all use it!


**Just an added footnote. Please feel free to post your own stock picks for 2010. The only requirement is that you say why and declare any financial interest. Post them below at the bottom of this piece or click here.


Disclosure
: I own FPH, FBU, WHS, SKC, MFT, AIA shares in the
Share Investor Portfolio.


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