Stock of the Week: Mainfreight Ltd

Mainfreight Ltd [MFT.NZX] has had a simply outstanding run in its share price over 2010 (see YTD chart above) and especially in the last month or so. The stock started 2010 at just over $5.55 and closed trading yesterday at $7.96. The last month has seen the stock rise from $7.25. (see one month chart below)It has come off a low of $3.25 in early 2009.


The stock is now back at levels that it was trading in early 2007 (see five year chart below) and few NZX stocks have managed to do that pre the October 2008 stockmarket crash.

I bought my initial shareholding at $7.96 and $8 4 years ago (clearly picked the wrong time there) and my most recent addition in 2009 for $4.20. To me it looks like the stock price has run away with itself.

The company has largely recovered from the recession but we will have to see a couple of years of sustained growth before the expectations of the market match the share price.

Beware before you buy !

I see good long-term value based on the current share price, otherwise I wouldn't have bought it at its peak 3 - 4 years ago (there was also a very big dividend involved in my buying that stock as well) but you could well get it cheaper at some stage during 2011 as the market realises it might well have overreacted.

Quality companies like this though always rise to the top.




Disc I own MFT shares in the Share Investor Portfolio


Stock of the Week Series

Pumpkin Patch Ltd
Fisher & Paykel Healthcare Ltd
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Reprise 5: Contact Energy Ltd
Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
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Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
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Mainfreight Ltd
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Reprise: NZ Refining Ltd

Mainfreight @ Share Investor

Read the MFT 2011 FY Presentation

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Discuss MFT @ Share Investor Forum
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c Share Investor 2010

Stock of the Week: Reprise 2: New Zealand Refining Ltd

With low refining rates, massive capital expenditure and plant shutdowns largely behind them and a rising global oil prices, 2011 looks to be a resurgent year for New Zealand Refining Ltd [NZR.NZX].

Back in October NZR was a Stock of the Week because its share price was 30c below what it closed at yesterday and I commented that higher oil prices will see this stock rise (well duh) and it has but the oil price rise has been a significant one. It has been mainly due to a very cold Northern Winter bumping up all sort of petrochemical products so it is unclear just how sustainable the oil price rise will be. Having said that the recent rise is bound to gain some traction even when the Northern ice melts away.

NZR is also subject to the NZ dollar US dollar cross but it looks like the Kiwi has finally started its appropriate ride down (ironically partly due to higher oil prices) to a value that reflects the dire outlook for our economy over the next 3-5 years.

These positive impacts for NZR seem to be conspiring all at the same time and should have a big impact on the fortunes of the company for 2011.

Historically the closing price of $3.91 yesterday is relatively low but you might want to put this on your watchlist if you are thinking of buying NZR and buy on any overall market weakness.

NZR @ Share Investor

Stock of the Week - Reprise: NZ Refining Ltd
Chart of the Week: New Zealand Refining Ltd
Stock of the Week: NZ Refining Ltd

Discuss NZR @ Share Investor Forum
Download NZR Company Reports


Stock of the Week Series

Pumpkin Patch Ltd
Fisher & Paykel Healthcare Ltd
Sky City Entertainment Group Ltd
Reprise 5: Contact Energy Ltd
Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
Delegats Group Ltd
Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
Restaurant Brands
NZ Refining
Ryman Healthcare
Mainfreight Ltd
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Xero Ltd
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Sky City Entertainment Group
Burger Fuel Worldwide
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Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances
Reprise: NZ Refining Ltd


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c Share Investor 2010

Stock of the Week - Reprise 5: Contact Energy Ltd

Contact Energy Ltd [CEN.NZX] has been a good trading stock over the last couple of years and since I last pointed out that fact in October the stock has put on nearly 50c or around 9%. A pretty good short term return.

From approx $5.70 in October 2010 to be trading at $6.18 at time of writing the stock is fast approaching a ceiling of around $6.25 it has reached several times over the last 2 years or so. (see 2 year chart above)

A second more rarer ceiling of around $6.50 is not far away.

If you have been trading CEN, and you of course will already be watching the stock closely if you are, you should be now deciding if you want to let your luck run or bail out and wait for the next fall in the stock price down to its regular 18 month floor of just above $5.50.

A good opportunity to take some profits off the table and to watchlist it for a buy on the way down,

By on weakness below 6 bucks.

Stock of the Week Series

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Fisher & Paykel Healthcare Ltd
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Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
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Reprise 2 : Contact Energy Ltd
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Reprise: NZ Refining Ltd


Contact Energy @ Share Investor

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Discuss this stock at Share Investor Forum - Register free
Download CEN Company Reports

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c Share Investor 2010

Stock of the Week: Pumpkin Patch Ltd

Pumpkin Patch Ltd [PPL.NZX] shares have taken a dive over the last 2 weeks.

From $2.00 back on November 22 and off a 52 week high of $2.32 in mid April the share price closed at $1.71 yesterday. (see 2 month chart above) This is a substantial 15% fall.

The only significant news that could have impacted the share price is the resignation of Chairman Greg Muir and the sale of a 1% shareholding by Onepath on November 30. This partial sale of a round a 8% overall holding would have been made due to profit taking on a share price that has recovered substantially over the last 2 years. (see 2 year chart below)

The full year 2010 profit out late September was exceptionally good when the dire economy is taken into account but perhaps the uncertain outlook from management didn't fire the buyers of this stock.

Whatever explanation for the drop this provides a good opportunity for long term investors to put this stock on their watchlist for appraisal for their own portfolios.

Buy on further weakness if you already had this company in your sights.

Disclosure I own PPL shares in the Share Investor Portfolio.


Stock of the Week Series

Fisher & Paykel Healthcare Ltd
Sky City Entertainment Group Ltd
Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
Delegats Group Ltd
Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
Restaurant Brands
NZ Refining
Ryman Healthcare
Mainfreight Ltd
Fisher & Paykel Healthcare
Xero Ltd
Auckland International Airport
Sky City Entertainment Group
Burger Fuel Worldwide
Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances
Reprise: NZ Refining Ltd


Pumpkin Patch @ Share Investor

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Download PPL Company Reports

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c Share Investor 2010

Stock of the Week - Reprise: NZ Refining Ltd

New Zealand Refining Ltd [NZR.NZX] has continued to have a lacklustre financial performance since we last visited back in June of this year. Its half year profit for 2010 was down 26% on the 2009 result.

Since June though the stock has rallied in price from $3.10 - reaching a 52 week low of $2.90 in July - to close yesterday at $3.66 after reaching a high of $3.75 in early October.

NZR management have said themselves that the company remains under pressure from uncertain refining margins and a stagnant oil price, so the only possible reasons for the share price rise are the reinstatement of a dividend and a general improvement of NZX share prices.

The current dividend of 2c is historically low for the company and generally they have been paying a good 10% plus gross yield for most of the last decade.

If you can calculate that the global oil price is set to soar (it will but just when is another question) soon then the current share price is a good place to buy.

Clearly if you see the stagnant financial position continue because of a constant oil price at present levels then the NZR share price will come under pressure if profit does not improve.

Since the share price has increased by more than 15% since June it might be worthwhile selling if you are a short term holder.

Long term investors might seize the opportunity to buy on further weakness.


Stock of the Week Series

Sky City Entertainment Group Ltd
Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
Delegats Group Ltd
Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
Restaurant Brands
NZ Refining
Ryman Healthcare
Mainfreight Ltd
Fisher & Paykel Healthcare
Xero Ltd
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Fisher & Paykel Appliances


NZR @ Share Investor

Chart of the Week: New Zealand Refining Ltd
Stock of the Week: NZ Refining Ltd

Discuss NZR @ Share Investor Forum
Download NZR Company Reports

Warren Buffett: Investing & Life Lessons On How To Get Rich, Become Successful & Dominate Your Personal Finance From The Greatest Value Investor Of All ... Men, Success Principles, Business Advice) by Ashton Marshall

c Share Investor 2010

Stock of the Week: Sky City Entertainment Group Ltd

I know some of you might accuse me of favoritism because I have a large position in Sky City Entertainment Group Ltd [SKC.NZX] in the Share Investor Portfolio but go ahead and do your worst. I believe I am being as unbiased as I can be and I will try to argue my case below. I also picked it as a stock of the week in July 2009.

I think this stock is a good buy at current levels and it looks like the market is showing further share price weakness as 2010 progresses but I cant understand why the share price is heading south. The market is sometimes wrong is where I am heading here. Having said that CEO Nigel Morrison has indicated that Australian expansion is on the cards and the company has plans to spend money on expanding their convention centre offering and the company doesn't have a good history under the previous CEO of making these kind of capital spends translate into profits. I think Morrison is a more careful sort of beast when it comes to expansion and the returns expected and made from them.

Its 2010 full year profit was a record one and it looks like its 2011 year is going to top that as well according to Morrison - he is looking for 10% growth. Add the rugby world cup into the mix and 2011 is going to be a great year for the company.

The gross dividend return of 8.41% alone makes the stock a good investment proposition.

The stock has been trading in a tight range of between around $2.80 and $3.05 since May and patient investors will get this stock cheaper if they wait. I am contemplating buying it between $2.70 - $2.80 to use up my dividend pool from 2010.

I believe that the current share price of $2.92 doesn't reflect its good prospects in 2011 and beyond. It is only one of a few stock prices that hasn't significantly improved as many have over the last year, due to perceptions that the economy is doing better and so it is worth looking at.

I also believe the market is discounting the good management of the company for the past two years and it seems it is skeptical that the company can continue to grow profit as it has done under Nigel Morrison.

I think they can.

Stock of the Week Series

Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
Delegats Group Ltd
Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
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Sky City Entertainment Group @ Share Investor

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Sky City Convention Centre @ Share Investor

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Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council

Discuss SKC @ Share Investor Forum

Download SKC Company Reports

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c Share Investor 2010

Stock of the Week - Reprise 3: Contact Energy Ltd

As you can see from the one year Contact Energy Ltd [CEN.NZ] chart the stock price is hitting support levels seen three subsequent times before over the year and at an open market price today of $5.66 is close to its 52 week low of $5.61. I last pointed this out in February 2010, then November 2009 and previous to that in June of the same year and 2 other times 1, 2 during 2009.

This support around this price has been vindicated for buyers at these levels as the stock price has gained significantly the previous 3 times, in one case by almost $1 per share.

If you are after a good long-term investment now could be the time to buy and of course short term investors will be having a ball with this stock.

With June operational data showing poor prices received by CEN for power generation further share price pressure could be on the cards with the prospect of impacts on the coming profit result. This is somewhat offset by a small increase in customer numbers, significant for the company as they have been losing customers over the last year or so.

Buy on further weakness.


Contact Energy @ Share Investor

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Stock of the Week: Reprise 2 - Contact Energy
Stock of the Week: Reprise - Contact Energy
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Contact Energy looks bright during dark times
Share Investor's 2009 Stock Picks
Follow the Monopoly Board

Discuss this stock at Share Investor Forum - Register free

Download CEN Company Reports

Stock of the Week Series

Delegats Group Ltd
Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
Restaurant Brands
NZ Refining
Ryman Healthcare
Mainfreight Ltd
Fisher & Paykel Healthcare
Xero Ltd
Auckland International Airport
Sky City Entertainment Group
Burger Fuel Worldwide
Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances

From Fishpond.co.nz



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c Share Investor 2010

Stock of the Week: Delegats Group Ltd

Delegats Group Ltd [DGL.NZ] had a poor 2010 half year result out last week and that has had the effect of a massive sudden share price drop from around NZ2.65 down to $2.10 at close of market yesterday. This share price drop is why Delegats is the Stock of the Week.

This is only 20c off a one year low of $1.90 and 50c off its $1.40 IPO price back in 2006.

There has been a one-off bad debt provision for a defunct UK wine retailer that hit the current profit and increased sales costs with a comment about our strong dollar coming from management having an effect on profit.

The outlook for the company is a profit down 30-40% on last year based on higher sales, higher costs and lower margins because of a worldwide wine glut.

Global wine sales have been hit hard during the economic downturn and this is a cyclical thing for winemakers. Delegats operates at the middle premium end of the market so has been hit harder than others as wine drinkers look for cheaper brands to quaff.

Delegats is a well run company though and its long history shows it has handled economic humps well.

The share price drop is a good opportunity if you have been admiring this company for some time. Its good growth, until now, has meant its share price has run away from a sensible valuation and it is now approaching fair value.

The share price could of course go lower but it seems to have currently hit a floor of around the $2.10 mark.

Buy on further weakness with a long term goal in mind.

Good Luck!

Delegats @ Share Investor

Lets drink to Delegats
Discuss this stock at Share Investor Forum - Register free


Stock of the Week Series

Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
Restaurant Brands
NZ Refining
Ryman Healthcare
Mainfreight Ltd
Fisher & Paykel Healthcare
Xero Ltd
Auckland International Airport
Sky City Entertainment Group
Burger Fuel Worldwide
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Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances

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c Share Investor 2010