Wednesday, August 31, 2011

Energy Mad IPO: A Closer Look

The Energy Mad IPO (see the prospectus for detail) is a coming listing that will be welcomed by the NZX but what can investors expect from this company, why are they going to the market with an IPO when all they want is 5 million bucks and what about intense competition from large multinational electronics companies who pop out the bulbs this company makes in their billions.

Lets have a closer look should we.

Management at Energy Mad [MAD.NZX] have put an IPO value on the company of $37,677,684 million, $32,677,684 million of that figure will be held by existing shareholders pre-IPO and up to 10 million shares will be available to the IPO if it is oversubscribed. The shares offered are a dollar a piece.

Lets see if that value holds up.

The company say they manufacture a unique energy efficient bulb for the retail mass market (they sell them to power companies and the like who then on-sell to consumers) and that the technology used in them is protected by patent. The company places a large emphasis in this technology to justify their business plan, sales, revenue and profit for the next few years but a quick google of energy efficient bulbs will tell you that not only are other companies making similar claims for their bulbs but there is emerging LED technology for bulbs that puts the power savings well above the compact fluorescent light bulbs (CFLs) that Energy Mad are selling.

The company tackles the issue of emerging LED technology on page 34 of the prospectus and naturally they are skeptical for its uses, cost, light output and LEDs other benefits over CFLs but it is worth pointing this out.

On this count alone a potential investor would have to question the company and its claim to have "unique technology" that has few competitors. They do presently and have future competition from emerging and future technology.

Lets move on to some of the facts and figures.

The company has not made a net profit since 2007 (accounts do not go back further than that in the prospectus) and revenue has been very patchy in the last 5 years with only a tiny increase since 2007.

The company has made much of a dramatic increase in futures sales but its past performance certainly would not be a good indicator of a future bonanza.

Their two year projection below maps out an ambitious revenue and net profit that increases
substantially on previous years. The 2012 projection is more than $5 million higher than the just over $8 million sold in 2011 and this sort of increase has thus far never been achieved.



The company carries just over $1.07 million in borrowings and some of the IPO funds will be used to pay that debt down.

The Energy Mad IPO will not be for everyone. It is a high risk proposition in a company with a patchy track record and high expectations for its future. The $37 million in value placed on the company is over the top given the company lost over $80,000.00 in 2011 on revenue of $8.6 million and the company itself only expects a $2.1 million profit for 2012 on revenue of $13.6 million. Perhaps half that value would have been more appropriate given the company's patchy financial past.

If you think this company will be able to satisfy their own high expectations and defy their past operational history then this IPO is for you. If you are skeptical for reasons of questions over the uniqueness of their technology and the competition that is coming from emerging and new technology then just buy an Ecobulb instead.

Footnote

The final nail in the coffin for me is that the company is involved in trading tooth fairy carbon credits to make its product look more appealing to the green conscious public in an attempt to curry favour with governments so they can sell their "green" bulbs to government backed environmental agencies with a taxpayer subsidy not far behind - in fact a small portion of the company's revenue already comes from the taxpayer.


Energy Mad IPO @ Share Investor


Energy Mad Prospectus
Discuss Energy Mad @ Share Investor Forum

From Fishpond.co.nz

Every Bastard Says No: The 42 Below Story

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Tuesday, August 30, 2011

Sky Network Television Ltd: Time for some Stripping!

After the latest Sky Network Television Ltd [SKT.NZX] profit result current shareholders are in for an early Christmas present in the form of a hefty and very attractive (like the completely in context photo to your left)dividend.

SKT have had a very good 12 months to June 30 2011 and on top of their 10.5c regular dividend they are paying a special dividend of 25c as a bonus. If you are eligible for the tax credits this is just under 50c per share or an approx 8% return on the current share price of $5.80.

What I am surprised about is that the share price has been stagnant since the announcement last Friday given the hefty return this would give the average investor and the fact that one would be stretching to get a third of this return if they left their green stuff in the bank.

The company is likely to have a another good year for full year 2012 with revenue gleaned from increased Rugby World Cup subscriptions so either I am missing something or potential investors are asleep at their computers.

If you look at the SKT share price (see 1 year chart below) it has been trading around its current level since May and is up about 15% since January so the stock price has mirrored an overall increase in stock prices for that period so you couldnt really say its share price has left the realities of its fiscal performance for the previous 12 months.

http://chart.bigcharts.com/custom/fairfax-com-nz/chart.asp?rnd=0.8138642738007774&style=2242&symb=SKT&size=1&type=64&time=1yr&freq=1dy&comp=&compidx=&ma=&maval=&lf=&lf2=&lf3=&uf=16384&arrowdates=&arrowlegend=&country=NZ&sid=2035389
1 Year SKT Chart

Investors have until 7 September to qualify for the payout and will get the green stuff in their banks just a week latter.

I good move for you dividend strippers out there.


Sky Network Television @ Share Investor

Share Price Alert: Sky Network Television Ltd
Long Term View: Sky Network Television Ltd
Watching Sky Television
Market Quickie: Sky TV Worth Watching

Discuss SKT @ Share Investor Forum
Download SKT Company Reports




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

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

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Sunday, August 28, 2011

Share Investor Portfolio: Value @ 26 August 2011

The Share Investor Portfolio is down over the last week after further global market jitters. In the last week of August the portfolio was down 2.06% or $4733.91 on the August 19 update .

The fall was bolstered in small part to a profit result and attached dividend from AIA.

For the first 33 weeks of 2011 the portfolio has increased by 7.8 % or $18816.53. Small falls right across the board - apart from one or two stocks - led the fall with SKC and MFT making up the biggest contributors to the portfolio negativity.

The total of unspent dividends and interest in the bank as at 19 August from the 2010 - 2011 earnings years is $$29,904.51 at close of reporting season for 2010 and at the mid -part of the 2011 2nd half reporting year. There are also approx $60000.00 in tax credits earned from the portfolio since it began in late 2002.

The Share Investor Portfolio has increased in value by 12.53% or $32573.67 since I began tracking it for this blog on October 11 2010

Track the Share Investor Portfolio 2.

Share Investor Portfolio as at 17:30:00, Friday 26 August, 2011 (NZT)

Stock
Quantity
Cost price
Total cost
Market price
Market value
Change
%
AIA

2,000 $1.700 $3,400.00 $2.260 $4,520.00 $1,120.00 32.94%
AIA

2,000 $1.510 $3,020.00 $2.260 $4,520.00 $1,500.00 49.67%
AIA

674 $0.000 $0.00 $2.260 $1,523.24 $1,523.24
AIA

638 $2.150 $1,371.70 $2.260 $1,441.88 $70.18 5.12%
ASBPB

3,109 $0.000 $0.00 $0.725 $2,254.03 $2,254.03
ASBPB

6,891 $1.000 $6,891.00 $0.725 $4,995.98 $1,895.03 27.50%
BGR

619 $0.000 $0.00 $1.370 $848.03 $848.03
BGR

2,381 $0.990 $2,357.19 $1.370 $3,261.97 $904.78 38.38%
FBU

303 $0.000 $0.00 $7.720 $2,339.16 $2,339.16
FBU

811 $9.750 $7,907.25 $7.720 $6,260.92 $1,646.33 20.82%
FPH

3,000 $2.350 $7,050.00 $2.210 $6,630.00 $420.00 5.96%
FPH

1,365 $3.720 $5,077.80 $2.210 $3,016.65 $2,061.15 40.59%
FPH

635 $0.000 $0.00 $2.210 $1,403.35 $1,403.35
FRE

6,405 $3.630 $23,250.15 $3.150 $20,175.75 $3,074.40 13.22%
FRE

2,226 $0.000 $0.00 $3.150 $7,011.90 $7,011.90
GFF

586 $0.000 $0.00 $0.990 $580.14 $580.14
GFF

1,414 $2.330 $3,294.62 $0.990 $1,399.86 $1,894.76 57.51%
HLG

299 $0.000 $0.00 $3.350 $1,001.65 $1,001.65
HLG

701 $2.530 $1,773.53 $3.350 $2,348.35 $574.82 32.41%
KIP

763 $1.480 $1,129.24 $1.000 $763.00 $366.24 32.43%
KIP

237 $0.000 $0.00 $1.000 $237.00 $237.00
MFT

1,000 $7.960 $7,960.00 $9.700 $9,700.00 $1,740.00 21.86%
MFT

1,838 $8.000 $14,704.00 $9.700 $17,828.60 $3,124.60 21.25%
MFT

1,375 $4.200 $5,775.00 $9.700 $13,337.50 $7,562.50 130.95%
MFT

787 $0.000 $0.00 $9.700 $7,633.90 $7,633.90
MHI

1,646 $0.860 $1,415.56 $0.920 $1,514.32 $98.76 6.98%
MHI

7,000 $0.630 $4,410.00 $0.920 $6,440.00 $2,030.00 46.03%
MHI

209 $1.050 $219.45 $0.920 $192.28 $27.17 12.38%
MHI

1,145 $0.000 $0.00 $0.920 $1,053.40 $1,053.40
PPG

31 $0.000 $0.00 $0.220 $6.82 $6.82
PPG

1,500 $0.440 $660.00 $0.220 $330.00 $330.00 50.00%
PPG

1,004 $0.800 $803.20 $0.220 $220.88 $582.32 72.50%
PPL

1,000 $3.090 $3,090.00 $0.900 $900.00 $2,190.00 70.87%
PPL

1,000 $2.870 $2,870.00 $0.900 $900.00 $1,970.00 68.64%
PPL

939 $4.200 $3,943.80 $0.900 $845.10 $3,098.70 78.57%
PPL

975 $0.000 $0.00 $0.900 $877.50 $877.50
PPL

1,086 $1.530 $1,661.58 $0.900 $977.40 $684.18 41.18%
RYM

555 $0.000 $0.00 $2.590 $1,437.45 $1,437.45
RYM

4,445 $1.970 $8,756.65 $2.590 $11,512.55 $2,755.90 31.47%
SKC

5,750 $7.430 $42,722.50 $3.430 $19,722.50 $23,000.00 53.84%
SKC

2,750 $7.700 $21,175.00 $3.430 $9,432.50 $11,742.50 55.45%
SKC

1,431 $8.750 $12,521.25 $3.430 $4,908.33 $7,612.92 60.80%
SKC

781 $7.600 $5,935.60 $3.430 $2,678.83 $3,256.77 54.87%
SKC

26,203 $0.000 $0.00 $3.430 $89,876.29 $89,876.29
STU

99 $0.000 $0.00 $2.550 $252.45 $252.45
STU

301 $4.740 $1,426.74 $2.550 $767.55 $659.19 46.20%
WHS

4,500 $3.730 $16,785.00 $3.400 $15,300.00 $1,485.00 8.85%
WHS

6,979 $6.000 $41,874.00 $3.400 $23,728.60 $18,145.40 43.33%
WHS

15 $3.710 $55.65 $3.400 $51.00 $4.65 8.36%
WHS

3,506 $0.000 $0.00 $3.400 $11,920.40 $11,920.40

24.72%


Total cost Market value Change

$265,287.46 $330,879.00 $65,591.54


Share Investor Portfolio @ Share Investor

Share Investor Portfolio: Value @ 19 August 2011
Share Investor Portfolio: Value @ 12 August 2011
Share Investor Portfolio: Value @ 5 August 2011
Share Investor Portfolio: Value @ 29 July 2011
Share Investor Portfolio: Value @ 22 July 2011
Share Investor Portfolio: Value @ 15 July 2011
Share Investor Portfolio: Value @ 8 July 2011
Share Investor Portfolio: Value @ 1 July 2011
Share Investor Portfolio: Value @ 25 June 2011
Share Investor Portfolio: Value @ 17 June 2011
Share Investor Portfolio: Value @ 10 June 2011
Share Investor Portfolio: Value @ 3 June 2011
Share Investor Portfolio: Value @ 27 May 2011
Share Investor Portfolio: Value @ 20 May 2011
Share Investor Portfolio: Value @ 13 May 2011
Share Investor Portfolio: Value @ 6 May 2011
Share Investor Portfolio: Value @ 29 April 2011
Share Investor Portfolio: Value @ 22 April 2011
Share Investor Portfolio: Value @ 15 April 2011
Share Investor Portfolio: Value @ 8 April 2011
Share Investor Portfolio: Value @ 1 April 2011
Share Investor Portfolio: Value @ 14 March 2011
Share Investor Portfolio: Value @ 8 March 2011
Share Investor Portfolio: Value @ 28 February 2011
Share Investor Portfolio: Value @ 21 February 2011
Share Investor Portfolio: Value @ 14 February 2011
Share Investor Portfolio: Value @ 7 February 2011
Share Investor Portfolio: Value @ 31 January 2011
Share Investor Portfolio: Value @ 24 January 2011
Share Investor Portfolio: Value @ 17 January 2011
Share Investor Portfolio: Value @ 10 January 2011
Share Investor Portfolio: Value @ 3 January 2011
Share Investor Portfolio: Value @ 27 December 2010
Share Investor Portfolio: Value @ 20 December 2010
Share Investor Portfolio: Value @ 13 December 2010
Share Investor Portfolio: Value @ 6 December 2010
Share Investor Portfolio: Value @ 29 November 2010
Share Investor Portfolio: Value @ 22 November 2010
Share Investor Portfolio: Value @ 15 November 2010
Share Investor Portfolio: Value @ 8 November 2010
Share Investor Portfolio: Value @ 1 November 2010
Share Investor Portfolio: Value @ 25 October 2010
Share Investor Portfolio: Value @ 18 October 2010
Share Investor Portfolio: Value @ 11 October 2010
Share Investor Dividends


Share Investor Portfolio 2 @ Share Investor

Share Investor Portfolio 2: Value @ 26 August 2011
Share Investor Portfolio 2: Value @ 19 August 2011
Share Investor Portfolio 2: Value @ 12 August 2011
Share Investor Portfolio 2: Value @ 5 August 2011
Share Investor Portfolio 2: Value @ 29 July 2011
Share Investor Portfolio 2: Value @ 15 July 2011
Share Investor Portfolio 2: Value @ 14 July 2011
Share Investor Portfolio 2: Value @ 13 July 2011
Share Investor Portfolio 2: Value @ 12 July 2011
Share Investor Portfolio 2: Value @ 11 July 2011
Share Investor Portfolio 2: Value @ 8 July 2011
Share Investor Portfolio 2: Value @ 7 July 2011


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Share Investor's 2011 Stock Picks: Looking Back
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Related Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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Security Analysis: The Classic 1934 Edition
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c Share Investor 2011