Port of Tauranga Ltd [POT.NZX] was at an all-time high of $5.10 yesterday. When we last visited this stock back in April 4 2017 it was trading at $4.15 and I said to buy it. Now I'm saying sell it. Maybe if you bought already for the long term, you have that locked in, good for you. If your a short term trader your run could be perhaps coming to an end. Its at a PE of over 40 and its returning just over 3%. You would have made just over 25% in 9 months if you include Divs. Not withstanding its long-term growth over the coming ten years - it is going to become NZ's number one port within those 10 years, I think we are going to head for a wee bit of a lull in trading over the next few years. It could go to perhaps $5.50 - 5.60 but I would lock in those benefits after the coming half year, when I think the company will do reasonably well. Good luck. POT @ Share Investor
Cryptocurrency? What is it, is it legitimate as a tool or investment, can I lose money, can I make money, which one will eventually win the race? All good questions, that deserve answers. I will try to answer some of yours. Now I've been hearing about this form of currency for about a year now.
Principally it has been Bitcoin,Ethereum and Ripple that I've heard of but there are literally hundreds of different types of Cryptocurrencies - in fact just today I read somewhere about Kodak was getting in on it. So everyone is having a go but there can only be a handful of survivors. The one i'm betting on is Bitcoin or Bitcoin cash principally since they are one of the first Cryptos off the block about 10 years ago. But as I said hundreds of Cryptocurrencies are on the market and they are all jockeying for position. Basically you can trade these currencies at variousonline trading websites even one right here in NZ. They take various fees off you for services rendered or in some circumstances all of your money.
Some of them - like Bitcoin - are based on block-chain technology: First, a traditional ledger needs to be kept secure, you don't want unauthorised people making changes. With a public blockchain, such as Bitcoin, anyone can download a copy of it. Moreover, copies are held by hundreds or even thousands of computers and are all updated automatically at the same time. ("Copies" is a little misleading as there is no master copy.)
Second, unlike a traditional ledger where someone can go back and make changes that were difficult, if not impossible, to detect, a blockchain is immutable and cannot be changed. If a change is required, for example to show that the ownership of 0.001 of a Bitcoin that was owned by X is now owned by Y, the transfer of ownership will be appended. That way of the owners of the 0.001 can be traced. Thus blockchains provide an immutable audit trail.
Third, before X can transfer the 0.001 to Y, the blockchain is checked to see whether X owns that Bitcoin. If more than half the copies say yes, then the Bitcoin will be transferred. This validation system means that a blockchain is safer than single databases which can be hacked and have money stolen from them.
Blockchain technology can do two things.
First, it can make existing processes more efficient.
Second, it can disrupt industries.
Take aid sent to third world countries. Currently not all aid payments get to the right people due to corruption. Blockchain can solve this by using radical transparency so that the money can be traced the entire way.
Alternatively, the actual charity can be done away with. People may want to donate to people affected by earthquakes. A smart contract (a self-executing computer programme) could be written that takes information from Google searches, Twitter and also reputable news providers, so that once an earthquake over a certain magnitude occurs payments are made automatically to all those living in the area.
This block-chain tech is one you should look out for. Legitimate sources on the subject like this one from Stuff.co.nz think this could be the one technology that we see emerge from the ether of the Cryptocurrency fallout. Banks are scurrying for position right now. There scarred they may get cut out of the picture and Block-chain is probably the way they'll do it. Along with Bitcoin, Apple, Google, Amazon and a whole host of others to numerous to mention here.'
You can make money, if you know what your doing, although it looks like to me things are about to go tits up, you are more likely to lose money as unscrupulous people prey on you, if you have some spare cash. Even that man who must be 90 soon Warren Buffett recently said "the cryptocurrency mania around the world isn't going to have a happy ending."
Remember if someone asks you to invest tell them about the tulip boom of the 16th century . Just one word is needed and is actually one of the first ones we learn as kids.
I'm going to do this again. Ill put this out there until January 31 2018 and I am going to do it with or without you - I would prefer it was with you. I've secured an Interview with Rod Drury, from Xero Ltd. It will be in the form of questions put to Rod about his company via email. Where to from here and why. What I want from you dear reader is questions. Relevant ones, please. Put your questions down here and I will submit them. Either email questions @ shareinvestornz@gmail.com or leave the at the bottom of this post. Thanks, Darren.
Brokers have picked a diverse mix of stocks for 2018, in many cases opting for those that have underperformed in the last year or so.
It's always worth remembering that winning the Brokers' Picks competition requires different strategies to everyday investing. A single year is an arbitrary time frame – often not long enough for value investors but too long for traders.
It is interesting to see the way participants opt for different ends of that spectrum in an attempt to capture a market beating annual result.
Hamilton Hindin Greene has leaned most heavily towards value investing picking well established stocks that have been out of favour and could present a bargain.
The two most obvious examples in their selection are Fletcher Building and Comvita – both strong companies that were punished by investors in 2017.
"Fletcher Building aired plenty of dirty laundry in 2017," says Hamilton Hindin Greene's James Smalley
"Whilst the risk remains of more coming to light, we believe the risk of major surprises has been limited by the announcements to date, and the recent KPMG Audit."
When you strip out the downgrades associated with the Building & Interiors business unit, Fletcher Building actually had a reasonable year, Smalley and his team noted. "We expect continued strong performance from most divisions, and a return to more normal performance from the Building & Interiors business unit."
Comvita had a tough year, its share price falling 37 per cent at one point before almost recovering back almost to break even by December.
"The decline was the result of investors' concerns of a lower than usual honey harvest, the discovery of myrtle rust in the North Island, and a drop-off in grey channel sales," says Smalley.
"We see these headwinds as temporary, and see significant upside potential on the back of better climatic conditions, continuing natural health product market demand from China, and favourable societal trends."
Hamilton Hindin Green also picks both SkyCity and Sky TV.
SkyCity's share price has gone sideways for several years as the company continues to invest heavily into the expansion of its Auckland and Adelaide operations. We expect the benefits from this investment will materialise in the years ahead, Smalley notes.
Sky TV seems a more curious play given the widespread view that the life span of its satellite transmission business model is limited.
Sky TV's share price has been in a steady decline since 2014, and accelerated to the down side in 2017 to touch an all-time lows in December, Smalley notes.
"This is on the back of investor concerns regarding alternative internet based offerings such as Netflix and the ever present threat of Amazon. Despite this, it is worth noting Sky's revenue is still above where it was in 2013 and subscriber numbers above where they were in 2012."
That presents a potential short term upside – around the rights context for All Black rugby.
"We feel that given the complexity of the contracts with Sanzaar, and the wider rugby content distribution obligations, Sky is still the likely candidate. Negotiations are expected to begin in April 2018, with a renewal likely to ease investor concerns. The company has relatively low gearing, with total debt representing just over 20 months 2017 free cash flow. This free cash flow should also underpin a dividend that would be in the double digits at current prices."
Craigs Investment Partners takes a similar approach with established stocks but leans towards those that have performed well in 2017 and could continue their run.
Craigs head of Research Mark Lister notes it would have been nice to have had a2 milk in the mix for 2017 (it returned 274 per cent).
While the a2 chart might look a bit shocking to some "the fact is that a fair chunk of the gains have been driven by fundamental improvements in the business", Lister says.
In 2014 a2 generated EBITDA of just $3.6m, and in 2017 this increased to $141m. This is expected to growth even further, with EBITDA of more than $250m expected in the coming year.
Forsyth Barr also has a2 in its picks for 2018.Craigs head of Research Mark Lister notes it would have been nice to have had a2 milk in the mix for 2017 (it returned 274 per cent).
While the a2 chart might look a bit shocking to some "the fact is that a fair chunk of the gains have been driven by fundamental improvements in the business", Lister says.
In 2014 a2 generated EBITDA of just $3.6m, and in 2017 this increased to $141m. This is expected to growth even further, with EBITDA of more than $250m expected in the coming year.
Forsyth Barr also has a2 in its picks for 2018.
Tourism Holdings is another strong performer which Craigs is picking to continue its run in 2018. It delivered nearly 70 per cent return for 2017.
"The tourism sector remains in very good shape, despite some capacity issues in places like Queenstown," says Lister "THL is also a vastly different company than it was ten years ago, with management having made a lot of progress in reshaping the business and positioning it for growth.
More than half the company's revenue comes from outside New Zealand, so it also fits the bill for us in terms of global growth options and some international diversification."
The only stock to get picked by three brokers this is year is Restaurant Brands – another strong performer through 2017.
Craigs, Hobson Wealth and Vulcan Capital all have it in the mix.
"[Restaurant Brands is] well placed to continue their impressive growth trajectory through global expansion initiatives as well as the continued roll-out of store refreshes, Hobson Wealth Partners notes.
Says Lister: "RBD has approximately 45 per cent of revenues from outside New Zealand, which provides some insulation from a potentially slower economy, the benefit of any NZ dollar weakness, as well as a number of international growth opportunities."
After that the picks start to get pretty diverse. A number of brokers have picked small cap stocks that have potential for large percentage gains if they capture market attention.
MSL Capital Markets sticks with Green Cross Health and Plexure – two companies that dragged down their results in 2017.
Green Cross Health is a diversified healthcare business (owning or supporting 330 Pharmacies under the Life Pharmacy and Unichem Brands, 23,000 Community Nursing clients and 46 Medical Centres).
"It is our preferred exposure to the healthcare sector and ageing population theme," says MSL's Andrew McDouall. "The arrival of offshore competition to the Pharmacy division has seen share price weakness which we believe is an over-reaction and provides a buying opportunity."
Plexure is a digital advertising company (originally known as V-Mob). It moved into profitability in 2017, notes McDouall, and is selling now on a revenue multiple of less than 1 times.
"Given the quality of their main contract with McDonalds and the worldwide rollout through the McDonalds franchises there should be significant earning uplift in 2018," he says.
First NZ Capital also picks some outsiders this year including EROAD – a tech company specialising in road transport payment solutions. And Tilt Renewables a solar and wind generation player formed from the de-merger of Trustpower.
The ultimate speculative play this year comes from Vulcan's Brett Wilkinson who's included a company called QEX logistics – which is expected to list in January. Wilkinson notes that the QEX, whose directors include former Federated Farmers chairman
Connor English (Bill's brother) and local rich Lister Danny Chan has completed capital raising and is ready to roll.
However, the NZX notes that (at time of writing) QEX Logistics have not yet released a listing and quotation notice.
Well you know after 10 years of writing this blog one thing is common. You just don't know with any certainty what is going to happen the next year, month, week and day and hour if you ask me. But let me be specific - for once. 2017 has been a good year for Share Investors Portfolio. It has added around $175,000.00 excluding Divs and for the first time has been valued at way over $1 million dollars - when you include all the dividends returned thus far. My attempt at trading shares have been spectacular in various shapes and sizes. My biggest regret also happens to be my biggest success. Fisher and Paykel Healthcare. It rallied something like 60% this year and my regret is sadly not buying double what I actually bought at the beginning of 2012. I havent lost one dollar, as opposed to other years in the past. The market is at 8398 for the year and I have no dought it will test the 10000 mark next year as the tax cuts in America start to flow through in the 2019 calendar year. It is looking spectacular on our market and especially European markets as they shake the last vestiges of the end of the GFC.
It stands to reason that if inflation and interest rates stay low your going to find markets continuing to take a vast amount of the populations moola. But you could start to see that change should there be a sharp upwards trend in either oil or interest rates. Then there is debt - all sorts of debt but especially in this country where we recently passed the one Trillion dollar mark in residential housing values - a great percentage of that one Trillion is debt - and you have to eventually pay it back. And that just little old NZ, a country with a whisker away from 5 million people! There are manifold problems brewing in the private sector debt all over the world - watch out. And...happy trading and holding of course. www.shareinvestorforum.com
Just managed to sell 3000 Tourism Holdings Ltd [THL.NZX] for $5.34 from $5.03 bought on 30 Oct. Yes it was 3000/not 1000 as I miss-directed you in Oct - Sorry. Made $810.00 or 4%. Could have made more cause I think it will drift up but not a bad return for 6 weeks - cause the alternative is just about Zero. Not sure I'm cut out for this short term thing. Ho hum.
Listing in a reverse listing today is TIL Logistics Group Ltd [TLL.NZX]. It will list at $1.50. I will be after some and will put a crazy bid in of $1.51. I say crazy because you would expect this particular one to be highly sought after. Highly sought after because of its history and conservative nature. And because it has thoughts that it could be bought out! I read this in their prospectus - if that's what you call the thing that has all the details about the sale - remember this is a reverse listing. My first reverse listing in 20 years! www.shareinvestorforum.com
/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/I6OAZNO6WBCCTBYPZDH32P6ULI.jpg)
/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/A6JJUFGLQZGL3AP67BWS4Z6R5E.jpg)
/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/NWJZBLWU5NFWXPNGHGXAM7WASU.jpg)
/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/D4KWZ2QC75HZDH4BM57DOH6L7I.jpg)
/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/LA2SWQJTXBE7RKX5KAGYNKNG6Y.jpg)
/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/K2TUHE2UTRHXZHP7GNUXCE24ZE.jpg)
/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/LR6DP5I6JVBHXIEZJUEGYZWTIE.jpg)
