Monday, May 17, 2010

Help me please I am a Poor Stockbroker


There is little or no coverage of smaller stocks listed on the NZX and that is a shame because some of them are better in quality than a number of the so-called "Blue Chips". Telecom NZ [TEL.NZ] being a glaring example of a big stock with little reason to cover but the broker boys all have an opinion on it.

Less coverage of smaller, quality stocks, leads to less investment in those companies through the stockmarket and investment only by those willing to do their own research - which of course aint such a bad thing.

Much of our stockbroker analysing isn't worth the paper it is written or file it is saved in. You simply cant trust it because of the financial conflicts brokers have with the companies they are writing about and rarely is there any disclosure of conflict. The quality of the researchers and their methods often run in a contrary nature to basic investing tenants, like a long-term view to investing rather than research based on the day to day fluctuations of the share price of a company.

It seems though that the bureaucrats have been "working on it" -we are the Government and we are here to help you - and it looks on first glance that there could be a taxpayer handout to some of these broker cowboys so they can do the research for us on these aforementioned smaller companies:

"Work is under way at Treasury on an "analyst research scheme" proposal which would ensure smaller stocks ignored by the broking industry would get coverage.

The scheme was suggested by the Capital Market Development Taskforce (CMDT) in December, which invited the NZX, Treasury and the Ministry of Economic Development to consider the idea...

A Treasury spokesman said questions such as who would pay for such a scheme were still being worked on." Stuff.co.nz

So the brokers will cover those smaller stocks but only if someone else is paying for it?

Who gets the revenue from the interest gained from publishing these company reports? Would it be brokers themselves? Surely NO!!!

Well the CMDT, all who have skin in the game, seem to think that welfare for brokers might just be the answer to the "problem" of small company coverage.

Since when is the answer to any "problem" Government intervention, with taxpayer dosh swilling around the trough ready for brokers to start taking an interest in those lonely small listed businesses?

Anything Government gets involved in turns into a mess and this hair-brained idea is no different. It is bound to be wrapped in layers of red tape with the very opposite objective being the outcome.

Let the market decide aye boys, until the taxpayer intervenes with a reason for you to move.

Nice work if you can get it.


Recent Share Investor Reading

Discuss this Topic @ Share Investor Forum

Recommended 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
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

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

Fishpond


c Share Investor 2010



Briscoe Group Ltd: Download Full Company Analysis

Briscoe Group Ltd [BGR.NZ] financial's including a full collection of data out May 10 2010 courtesy of Aspect Huntley/ASB Securities.

This is a series I will do for the Share Investor Portfolio and other NZX listed companies.

You will find balance sheets, ratios, charts, shareholder returns, 10 year analysis, broker recommendations, substantial shareholders, commentary and company details, forecasts and all the BGR info you could need to make a decision whether to invest or not. Download the full package at Share Investor Forum - you must join to download. It is free and takes less than a minute.


Disc I own BGR shares in the Share Investor Portfolio



Share Investor Portfolio Company Analysis Series


Auckland Airport Ltd

Hallenstein Glasson Holdings Ltd
Mainfreight Ltd
Michael Hill International Ltd
Sky City Entertainment Group Ltd
The Warehouse Group Ltd

Xero Ltd*


Briscoe Group @ Share Investor

Briscoe's Cash worth looking at
Why did you buy that stock? [Briscoe Group]
Long Term View: Briscoe Group Ltd
Rod Duke's Pumpkin Patch gets bigger

Download BGR Company Reports

Discuss BGR @ Share Investor Forum - Register free



c Share Investor 2010





Sunday, May 16, 2010

Mainfreight Ltd: Download Full Company Analysis

Mainfreight Ltd [MFT.NZ] financial's including a full collection of data out May 10 2010 courtesy of Aspect Huntley/ASB Securities.

This is a series I will do for the Share Investor Portfolio and other NZX listed companies.

You will find balance sheets, ratios, charts, shareholder returns, 10 year analysis, broker recommendations, substantial shareholders, commentary and company details, forecasts and all the MFT info you could need to make a decision whether to invest or not. Download the full package at Share Investor Forum - you must join to download. It is free and takes less than a minute.

Disclosure: I own MFT shares in the Share Investor Portfolio


Share Investor Portfolio Company Analysis Series


Auckland Airport Ltd
Hallenstein Glasson Holdings Ltd
Michael Hill International Ltd
Sky City Entertainment Group Ltd
The Warehouse Group Ltd
Xero Ltd*


* Not in the Share Investor Portfolio


Mainfreight @ Share Investor

Chart of the Week: Mainfreight Ltd
Long Term View: Mainfreight Ltd
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

Discuss MFT @ Share Investor Forum

Download Mainfreight Company Reports


Recommended 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
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

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

Fishpond


c Share Investor 2010

Friday, May 14, 2010

Sky City Convention Centre Expansion a Money loser



The proposal for Sky City Entertainment Group Ltd [SKC.NZ] to build an extension to its Auckland conference centre while on first look appears positive, if you look closer its validity as a revenue earner, for the centre itself and then providing extra foot traffic to the casino doesn't stack up as a good return for shareholders.

I have been googling around and this has confirmed by suspicions that the majority of convention centres just do not make money and are in fact capital losers.

"The center was promised to bring out-of-towners who stayed in hotels and spent money," said Heywood Sanders of the University of Texas at San Antonio, who studies the performance of convention centers and is a longtime critic of such publicly financed projects. "They routinely overpromise, and they never do what they're supposed to do. The question is how badly they perform. Putting in a hotel is no guarantee that it will improve the center's performance."

Washington Post: Heywood Sanders of the University of Texas at San Antonio - Researcher of Convention Centre performance.

Convention centres are generally built and run by local Governments because of the poor economic returns (it seems it is OK for them to lose money because it is only the taxpayer forking out moola) and the premise seems to be that the centre itself will not make money but that it will bring high spending convention delegates into town that would not ordinarily be there and that their largess would then be spent in businesses in the local area.

For Sky City this would hopefully mean more hotel rooms used and more money spent in its bars, restaurants and with fingers crossed its casino but this is not necessarily a given if you look at the example above and your own convention centre in your own local town or city. Sky City has a casino patronage of more than 80% locals so the convention centre crowd is unlikely to increase bums on slot machine seats.

The impact on Sky City shareholders will be felt first at the capital expenditure stage of any proposal going ahead and secondly future running costs of the larger centre. (this also appears to be where the proceeds of the sale of SKC cinema assets are going - $60-70 million worth) The extension of the Federal Street centre is a complex one with the street needing possible under-grounding and the expansion itself being suspended in open air over the street.

The success for Sky City shareholders (and when a say success I mean a decent return on investment) seems to lie in getting enough extra traffic through Sky City complex in order to get the increased revenue to justify the initial expense but as studies have found this does not usually eventuate, so the Sky City Convention Centre expansion would be an exception to the rule if it were a ripper of a money earner.

Management are clearly trying to squeeze more revenue and profit from their biggest money earner and that is admirable but expanding their convention business is not going to do that.

Best to let the willing city fathers (but unwilling and poor ratepayers may I add) spend ratepayer moola on a convention centre just around the corner and target the stragglers from there.

Read Sanders Paper - PDF


Disc I own SKC shares in the Share Investor Portfolio


Share Investor Interview

Share Investor Interview: Sky City CEO, Nigel Morrison - November 2009
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year

Sky City @ Share Investor

Sky City Entertainment Group Ltd: Download full Company analysis
Sky City 2010 full year profit looking good
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year
Sky City Entertainment Group 2010 Interim Profit Review
Are Insiders selling Sky City Stock?
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City share offer confusing and unfair for smaller shareholders
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster

Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss SKC @ Share Investor Forum





c Share Investor 2010