Friday, March 11, 2011

Share Price Alert: New Zealand Stock Exchange Ltd



Somehow the recent meteoric rise in New Zealand Stock Exchange Ltd [NZX.NZX] has passed me by.

In the last 10 days alone NZX shares have added 49c or 30% and are well off a 52 week low of $1.39 reached back in September 2010.

Quite honestly I am scratching my head as to why this might be.

The 2010 full year net profit result was underwhelming and the outlook isn't as near as promising as the share price might indicate.

The stock is thinly traded, with mostly brokers holding the bulk of shares but clearly the share price has gotten away from the realities of company performance and its current price might be a good place to say goodbuy.

A 30% rise in share price is not a sustainable one.

For short-term investors you might want to sell for a quick buck and for those of you wanting this stock for your long-term portfolio best be patient and wait for the share price drop.


Share Price Alert

Mainfreight Ltd
The Warehouse Group Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
Fletcher Building Ltd
Restaurant Brands Ltd
Mainfreight Ltd
Tourism Holdings
Goodman Fielder Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
NZ Refining Ltd
Freightways Ltd
Xero Ltd


NZX @ Share Investor

The NZX continues to lose ground with retail investors
NZX Share Split good news for profit takers
New Zealand Stockmarket: A History from beginning to Present
NZX needs competition
NZX sneaks out embarrassing carbon disclosure after dark
Bruce Sheppard: Mark Weldon - "The Sheriff of Nottingham
Bruce Sheppard: Explanation Received
Bruce Sheppard: Please Explain
Mark Weldon Strikes out on Carbon Trading
Mark Weldon now in two minds about Carbon Trading
Quote of the Year

Discuss NZX @ Share Investor Forum
Download NZX Company Reports

Recommended Fishpond Reading

Crisis: One Central Bank Governor and the Global Financial Collapse

Buy The Intelligent Investor & more @ Fishpond.co.nz



Fishpond


c Share Investor 2011

4 comments:

  1. Hi Darren, a great post; but I feel your evaluation is somewhat unfair towards nzx. To start with NZX started with a 10 million dollar turn around 7 years ago and are now at $50 million that’s 400% growth of turn over so far, phenomenal if you think about it. Compare it some of the retail businesses like briscoes, pumpkin patch which just have flat growth year in and year out. One might argue that, they are in the retail segment which tends to be cyclic and it is unfair to compare it against NZX.

    Sure the recent merger of the Singapore exchange with the ASX has cast a shadow on the viability of NZX; But if you really think about it, NZX have diversified a lot over the years, they started the milk and dairy futures market place last year and with the all the talk of selling portions of the state owned enterprises and listing them on the NZX will only bolster its income. Also I don’t think it’s just the brokerage houses that own NZX. ACC own greater than 7.5% of NZX + many of the big investment funds hold a decent chunk.

    oh yes there been a great deal of interest in the stock in the last two weeks and that has bumped the price up in the short term, but that shouldn't be no indicator to sell it! I can find more compelling reasons to sell PPL and other bung stock than NZX. From a birds eye point of view, it is a our national stock exchange; With all its new products it is becoming a more of a niche/specialist player, It had an acquisition offer form the ASX 5 years ago (blocked by the labour government then), and it still looks very attractive for an acquisition.

    ReplyDelete
  2. Hi RG,

    I am only basing my opinion of sell based on the meteoric rise of the NZX share price in such a short time.

    You can always buy again if you like the company and where it is headed as the share price drops, which I think it will.

    There is no material reason for the share price to rise 30% in 10 days.

    I agree, there are other stocks that are worse ones to own. PPL, (which I own) could be one of them but that company has a good long term outlook in the right hands.

    Note: I changed the last line of my post.

    ReplyDelete
  3. Probably up on rumors of a take over. Highly unlikely that many exchanges will be able to remain completely independent. There will be continued mergers and acquisitions, and eventually NZX will get taken over by one of the bigger players.

    ReplyDelete
  4. SB, Why would any other exchange bother. Ours is so small.

    I could see the ASX maybe interested. That would probably be a good thing in relation to its profile and operation.

    ReplyDelete

Comment on Share Investor Stuff