Share Investor: MHI

Showing posts with label MHI. Show all posts

Wednesday, December 29, 2010

Brokers 2011 Stock Picks

You may have read my sharemarket picks for 2011 but for some light reading over the holidays lets take a look at some of the "professionals" picks from brokers and the like.

Please keep in mind that just like my picks there maybe some financial interest involved in picking them, there usually is, but in my case I disclose whether I have a holding in any of the stocks that I have picked. It is not clear from the NZ Herald article from where these picks originate as to whether the brokers have holdings or not. One would assume they did but they could of course just be theoretical selections.

Brokers Picks for 2011

Craigs Investment Partners
* Auckland Airport
* Contact Energy
* Fletcher Building
* Westpac Banking Corporation
* Henderson TR Pacific
Hamilton Hindin Greene
* Pyne Gould Corporation
* Ryman Healthcare
* Sky City Entertainment
* Tower Corporation
* Westpac Banking Corporation
First NZ Capital
* Contact Energy
* Kathmandu
* Opus International Consultants
* Nuplex
* NZX
Goldman Sachs & Partners
* Infratil
* Kathmandu
* Fisher & Paykel Healthcare
* Mainfreight
* Sky Television Network
McDouall Stuart
* Diligent
* Fletcher Building
* Infratil
* Michael Hill
* Ryman Healthcare
Forsyth Barr
* Delegat's
* Infratil
* Guinness Peat Group
* Sky City Entertainment Group
* Pumpkin Patch
Macquarie
* Sky Television Network
* New Zealand Oil and Gas
* Kathmandu
* Restaurant Brands
* Skellerup
THE PAST YEAR'S PICKS
12 months to December 10, 2010
* Subsequent to cut off point for the competition Pike River Coal has gone into receivership and been suspended
First NZ Capital
* Nuplex NPX 47.4%
* Tower TWR 11.6%
* Restaurant Brands RBD 82.2%
* The Warehouse WHS 1.1%
* Opus International OIC 25.3%
* Total 33.5%
ASB Securities
* Sky TV SKT 9.6%
* F&P Healthcare FPH -0.7%
* Pumpkin Patch PPL -12.0%
* Methven MVN 8.1%
* Auckland Airport AIA 16.1%
* Total 4.2%
Goldman Sachs JBWere
* Mainfreight MFT 40.6%
* Methven MVN 8.1%
* Infratil IFT 21.4%
* F&P Healthcare FPH -0.7%
* Nuplex NPX 47.4%
* Total 23.4%
Craigs Investment Partners
* Ryman Healthcare RYM 11.0%
* F&P Healthcare FPH -0.7%
* Freightways FRE 4.5%
* SkyCity SKC 1.7%
* Templeton Emerging Markets TEM 20.9%
* Total 7.5%
Hamilton Hindin Greene
* Fletcher Building FBU 5.0%
* NZ Oil & Gas NZO -44.1%
* Pyne Gould Corp PGC -12.7%
* Rakon RAK 2.6%
* Tower TWR 11.6%
* Total -7.5%
Forsyth Barr
* Auckland Airport AIA 16.1%
* Contact Energy CEN 12.3%
* PGG Wrightson PGW -20.0%
* GPG GPG -3.5%
* Delegat's DGL -19.8%
* Total -3.0%
McDouall Stuart
* NZ Oil & Gas NZO -44.1%
* Pike River Coal* PRC -77.5%
* Ryman Healthcare RYM 11.0%
* Michael Hill Jeweller MHI 36.5%
* Diligent DIL 93.5%
* Total 3.9%

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

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c Share Investor 2010 & 2011

Monday, December 20, 2010

Michael Hill International: "Takeover" Undervalues the Company

The "takeover offer" being made to all shareholders in Micheal Hill International Ltd [MHI.NZX]by the Michael Hill Family Holding Company Durante Holdings Pty Limited (Durante), the holding company for the 47.63 per cent of the total shares in MHI owned by interests associated with Mr Michael Hill, is one that has appeared to get around the takeovers code by offering to buy 5% of current MHI shareholders in the company an offer to buy their shares at 90c each.

Typically any shareholding above 50% automatically kicks off what should be a full takeover for the target company but MHI seems to have found a loophole after abandoning an initial plan back in September after floating the idea initially in August.

Of course any shareholding above 50% gives the owner complete control of the company.

I labelled this a Claytons takeover in August and still consider this a blatant disregard for shareholder rights.

I will not be selling any of my shares for the above reasons and because the offer of 90c per share for effectively full control of the company is not enough premium for full control and undervalues the company and its long term potential.

I possibily risk a potential interview with Michael that I have been trying to organize for 2011 (I have his cell phone number but he doesn't always return his calls) by speaking out like this but I care about shareholders before the business owners.

If you are thinking of selling, please don't. Apart from the shenanigans associated with this power play the company is very well managed and has a great long term future and you would be undervaluing your investment in the company if you sold so cheaply.

Disc I own MHI shares in the Share Investor Portfolio

MHI Takeover

Full list of Related Documents

Michael Hill International @ Share Investor

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

Toughen Up - Fishpond.co.nz

c Share Investor 2010

Monday, November 1, 2010

October 2010 Top Stock: Michael Hill International Ltd

Michael Hill International Ltd [MHI.NZX] has been a standout performer over October.

It put on 20% over the month on news that Kim Kardashian is going to be spokesperson for a competition being held to promote MHI in the USA and news that the company had a good sales quarter to 30 September 2010.

The 81c per share MHI is trading at is a 2 year high so takes us back to pre-2008 global crash prices. It is well short of the $1.20 (post a 1:10 share split at approx $12 per share) it was trading at in December 2007 however. This share price was inflated due to the anticipation of that share split and pre problems in Canada and the USA and the overall market exuberance at the time.

The last quarter sales figures are extremely good but that must be tempered with the fact that the most important trading period for the company is the quarter that ends December 31 2010.

Like most retailers MHI make the bulk of their profit at Christmas and we all know that people are just not buying - apart from the last quarter at MHI - and the company needs to exceed 2009 half sales by some margin to justify the large increase in share price.

If it doesn't there will be another opportunity to buy this stock at post Christmas sales in January 2011.

Disc I own MHI shares in the Share Investor Portfolio

Michael Hill International @ Share Investor

Thursday, October 7, 2010

Michael Hill International: Is Kim Kardashian the right fit?

Kim Kardashian

At first glance the choice of Kim Kardashian, reality queen and porn star, might look a good person to get publicity for a contest to find "the world's best couple" and further your brand in the United States and if you are Michael Hill from Michael Hill International Ltd [MHI.NZX] you would do just about anything to make your business there prosper but is Kardashian really the right fit for a business that sees itself as an upmarket jewelery brand?

Kardashian & Hill pair are teaming up to find the world's best couple. Dating, engaged or married couples can all be in to win a 22 carat diamond ring valued at more than $250,000 and the resultant publicity will get millions of dollars of free advertising for the jewelry chain, that is currently struggling in the Chicago area that it has operated in since late 2008.

Hill had many gimmicks that got himself and his company noticed in Australasia in the 1980s - 1990s and that subsequently led to a good long-term business but have things changed so much in 20 years that now somebody famous for ***king in front of millions is going to do the business for you?

I think it is a mistake but I could be wrong, I am only a small shareholder in MHI and not the man himself, so what do I know.

I think it is short term publicity that could backfire.

Nevertheless you can follow the madness at the official competition site or Facebook page.

* Kim Kardashian Photo supplied for research purposes and google rankings.

Disc I own MHI shares in the Share Investor Portfolio

	Toughen Up by Michael Hill Buy used from: $4.46

Toughen Up by Michael Hill
Buy used from: $4.46

c Share Investor 2010

Share Investor Portfolio: Spring Stock Picks

Saturday, August 28, 2010

Michael Hill International: Tall Tales & Rumours

A little birdy told me something interesting this morning that got my mind in an overactive and speculative mood.

The move by the Hill family earlier this week to take a larger share of Michael Hill International [MHI.NZX] got me a bit hot under the collar but I put a question to an accountant client of mine this morning and asked him what he thought of the move.

He told me that when a large holder of such a stake in a business consolidates its shareholding and seeks to increase it, it is more likely an indication that the protagonist is trying to make the shareholding more attractive to a possible buyer, rather than wanting to take control of the company themselves.

My source told me when he was a director at Whitcoulls and Graehme Hart was running the show this was the approach Hart took before he sold the company to Blue Star Group.

Of course this is just more idyll speculation on my part but after thinking about the scenario it makes more sense than the reason the Emma Hill gave for wanting to take a mere 2.1% more in the company:

"...the family wants to take advantage of a depressed share price to take control. We've always wanted to buy a bigger stake in the company, and we think the stock is undervalued right now. It is just opportunistic with the right price coming at the right time."

If that is indeed the case why not pitch for a bigger stake than 2.1% more. Why not go for gold if the share price is such a bargain? (which it is I might add).

I am not saying that the Hill's are going to sell their stake any time soon but my accountant friend's thoughts should be considerd by the market because I think there is some merit in what he told me.

That is just between you and me though.

Disc I own MHI shares in the Share Investor Portfolio

Michael Hill International @ Share Investor

Hill Family makes Claytons Takeover bid for Michael Hill International
Michael Hill International Ltd: 2010 Full Year Profit Analysis
Long Term View: Michael Hill International Ltd
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 - Fishpond.co.nz

c Share Investor 2010

Wednesday, August 25, 2010

Hill Family makes Claytons Takeover bid for Michael Hill International

The announcement today that the Hill family, the largest shareholder of the publicly listed Michael Hill International [MHI.NZX] is looking to consolidate and increase its family shareholding in the company from 48% to 50.1% of the company is a significant move by the family and ditto has significance for shareholders, for a number of reasons.

At 50.1 % the family would have majority control as a voting block to look after themselves rather than other shareholders. I am not saying the will put that in practice but majority holding will mean they can if they wish to do so.

The possible move to a 50.1% shareholding would also require an exemption to the Takeovers Act that normally requires offers for additional shares at this shareholding level be made to all shareholders.

This move is also contrary to the move made by the company to split the shares at the end of 2007 to increase liquidity in the trading of the shares on the stockmarket.

You can look at this move in two ways.

Firstly that it is a positive move by the family that they see value in the company at current share prices and are willing to stump up some cash to buy a bigger stake in the company. A good move when the company is under some pressure from a retail slump and the shares are trading at a good discount to the long-term outlook for the company.

Secondly, and a view that I tend to lean towards, is that the move is a rather cynical one because it is going to impact negatively on minority shareholders because the family will have more control over the company without having to make an offer to all shareholders for full control and they are seeking an exemption through the NZX and a vote put to shareholders at the November 5 annual meeting to achieve their purpose.

Michael Hill International has thus far proven a good corporate citizen and has treated MHI shareholders in a fair and balanced manner in terms of business operations and has been a good long-term investment for shareholders.

Should this claytons move to take over the company by the Hill family and its interests be accepted by the NZX and its operations and then voted approval by shareholders (it must be kept in mind that the family already has a 48% voting block and it wont take too many minority shareholders to vote in their favour or opt not to vote at all for their plan to realise gold) without a full offer made to take the company over, then the small shareholder is going to get shafted again.

I will be voting against the Hill's proposal and I urge other MHI shareholders to do the same.

Disc I own MHI shares in the Share Investor Portfolio

Michael Hill International @ Share Investor

Michael Hill International Ltd: 2010 Full Year Profit Analysis
Long Term View: Michael Hill International Ltd
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 - Fishpond.co.nz

c Share Investor 2010

Friday, August 20, 2010

Michael Hill International Ltd: 2010 Full Year Profit Analysis

Michael Hill International Ltd [MHI.NZX] delivered a strong 2010 full year profi t today.

Underlying net profit of $26. 5 million was up by approx 60% on the 2009 full year profit of approx $16.5 million (excluding the one-off tax gain from 2009 for comparison to the 2010 figure) Significantly though the 2010 profit was just 0.7 million short of the 2008 full year net profit of $25.2 million.

Revenue was up 7.6% to $443,710 million on 2009 revenue of $411.999 million . Significantly half of this increase was from US stores which sales for were not included in 2009 sales figures.

Key Points

- Operating revenue of $443.331m up 7.6% on same period last year
- Same store sales 5.2% up on same period last year
- Net profit after tax of $26.509m. Last year's net profit of $66.788m included a deferred tax credit of $50.197m.
- Net debt of $45.437m at 30 June 2010
- 5 new stores opened during the twelve months and 12 closed including 8 in the US
- Final dividend of 2.5 cents per share up 66.7%

New Zealand and Australian stores did exceptionally well while Canada and the North American units continued to drag on the whole group.

Big losses were incurred in the United States while the Canadian stores increased losses from 2009.

Net debt increased by nearly $10 million to $45.4 million indicating costs involved in the North American market were still making a negative impact on the bottomline.

All important retail margins were under pressure but significantly same stores sales were up by over 5% which in this economic and retail climate is exceptional.

Management at MHI seem a little vague about the coming year for the company - just like most NZX listed companies have been over the reporting season - but what they have indicated is that they are "confident in the continued growth and profitability of the Group".

I am positive too but the reality is that 2011 is going to be just as tough as 2010 (and maybe even tougher) and their North American operations are going to continue to lose money in an otherwise solid Australasian business.

Disc I own MHI shares in the Share Investor Portfolio

Michael Hill International @ Share Investor

Long Term View: Michael Hill International Ltd
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 - Fishpond.co.nz

c Share Investor 2010

Tuesday, August 10, 2010

Mixed Retail Outlook

Recent announcements by retailers Briscoe Group Ltd [BGR.NZX] Kathmandu Holding Ltd [KMD.NZX] and Hallenstein Glasson Holdings Ltd [HLG.NZX] has got me thinking about the fortunes or otherwise of the other retailers in the Share Investor Portfolio.

Briscoes had a mild upswing in sales for the last half year to 1 August 2010 but in the last quarter of that half sales were down on the same period in 2009. This clearly indicates that the economy is not well at all. Kathmandu over-promised in their IPO Prospectus and last week delivered under par sales revenue. They cited a poor overall retail environment for the gap between their promises and last weeks reality.

Hallenstein Glasson had a different story to tell however with a sizable lift in projected profit for 2010 when compared to the same period in 2009 and a reasonable lift in sales considering the current poor retail environment. This is of course off a reasonably poor 2009 profit but the company is showing promise in a time of closed consumer wallets by concentrating on all important margins, avoiding frequent sales and keeping down costs. All the things the aforementioned seem to be ignoring - with the exception of BGR on costs.

The Warehouse Group Ltd [WHS.NZX] I suspect is going to have disappointing results coming up in September and Postie Plus Group [PPG.NZX] is likely to similarly disappoint the market - nothing new there then.

With the exception of expenses incurred from thus far failed attempts by Michael Hill International [MHI.NZX] and Pumpkin Patch Ltd [PPL.NZX] to expand in North America I think those two companies will see some improvement.

Retail successes over the last year seem to be concentrated on the specialist retailers who have a loyal following of their strong brands rather than the larger broad based "department store" type operators. They seem to have been able to cuts costs in the lean times in a more expeditious manner than their bigger competitors and keeping costs down, while attracting higher margin custom in this recession is key to staying in business.

You simply cant make money by selling stuff too cheaply just to get rid off it.

Disc I own BGR, HLG, MHI, PPL, PPG & WHS shares in the Share Investor Portfolio

Briscoe Group @ Share Investor

Long Term View: Briscoe Group Ltd
Briscoe's Cash worth looking at
Why did you buy that stock? [Briscoe Group]

Download BGR Company Reports

Discuss BGR @ Share Investor Forum - Register free

Share Investor

Wednesday, December 29, 2010

Brokers 2011 Stock Picks

Monday, December 20, 2010

Michael Hill International: "Takeover" Undervalues the Company

Monday, November 1, 2010

October 2010 Top Stock: Michael Hill International Ltd

Thursday, October 7, 2010

Michael Hill International: Is Kim Kardashian the right fit?

Share Investor Portfolio: Spring Stock Picks

Saturday, August 28, 2010

Michael Hill International: Tall Tales & Rumours

Wednesday, August 25, 2010

Hill Family makes Claytons Takeover bid for Michael Hill International

Friday, August 20, 2010

Michael Hill International Ltd: 2010 Full Year Profit Analysis

Tuesday, August 10, 2010

Mixed Retail Outlook

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