Monday, June 1, 2009
National's Budget like watching paint dry, Labour's would have led to economic disaster
Posted by Share Investor at 8:39 AM 0 comments
Labels: 2009 budget, economy, michael cullen, National Party
Freightway's Capital Raising more of the same crap for small shareholders
I have been moaning, bitching and hitting my head against a brick wall recently because of how totally unconscionable a number of NZX listed companies have been towards their shareholders when it comes to the flurry of capital raisings that have happened over the last few months.
Scant little care and only lip service has been given to small shareholders like you and me.
The three capital raisings that I have participated in so far : Sky City Entertainment [SKC.NZX] , Fletcher Building Ltd [FBU.NZX] and Freightways Ltd [FRE.NZX] have all favoured the larger shareholders or in fact recent interlopers who haven't been shareholders at all. They received concrete shareholdings at a definite price, without having to stump up "lost cash" that stays in someone else's bank account until credited back to the recipient with their meagre allotment of shares.
Small shareholders have had to stump up the maximum amount of cash to get a scaled down number of shares at a price they are unsure of until after the offer is closed.
The latest stinker has been the Freightway's share offer that wanted NZ$5,000,000.00 from small shareholders but was over subscribed by 1040%!
As Kelvin Hartnall points out institutions got a great deal:
The total amount provided by small investors was $57 million, which is more than the total capital raising combined. This shows that it was completely unnecessary to dilute the share-holdings by giving institutions such a great deal. Essentially the institutional investors have received a great bargain at the expense of small investors.
I sent in the maximum $12500 and will get less than 500 shares. I needed around 1200 to avoid dilution. Here, from Kelvin Hartnall again is an approximate breakdown of what Freightway's shareholders can expect to get some time next week:
Aggregate pool | $5,000,000 |
Number of share-holders | 6,423 |
Pool available per share-holder | $778.45 |
Issue price | $2.44 |
Shares available per share-holder | 319 |
This favouritism to the big boys is more of the same we small guys have expected and we have little protection from securities law, the NZX or any independent body. Bruce Sheppard from the Share Holders Association has been vocal as usual but has been met with the typical stoney silence or bullshit from company management along the lines of "well that is the best we can do in this economic environment".
Clearly that is wrong. Share offers for every good company that has made one so far have been wildly over-subscribed, so the moola is out there.
Other companies have at least made an attempt to even the financial playing field in their capital raisings by using rights issues to raise money. As rights issues are structured, a non -renouncable rights issue is one where shareholders are given the right to purchase new shares according to the number of shares they hold or they can forgo those rights if they wish. On the other hand a renouncable rights issue would allow shareholders to trade those rights to others should they not want to take up the rights offer.
In my opinion a renouncable share offer is the fairest way of raising capital because you get to buy in proportion to the shareholding you have and if new shareholders wish to participate in the capital raising they can buy the rights off you.
After that if there is a capital shortfall then and only then should institutions get a crack at stumping up some cash and the incentive to offer them a better deal, at the back end, would not only be appropriate but more than warranted.
Related Share Investor Reading
- Sweetheart deal for Fletcher Building's friends makes small investors sick
- What 11 years of Stockmarket investing has taught me
- The NZX continues to lose ground with retail investors
- Sky City CEO doubles down
- More Moola Please!
- Are you experienced?
- Sky City share offer confusing and unfair for small shareholders
Relevant Links
Kelvin Hartnall's Blog
NZ Shareholders Association
NZX
Freightways @ Share Investor
Share Investor's Total Returns: Freightways Ltd
Share Price Alert: Freightways Ltd 3
Share Price Alert: Freightways Ltd 2
Freightways Ltd: 2011 Half Year Profit Commentary
Share Price Alert: Freightways Ltd
Freightways Ltd: 2010 Full Year Profit Analysis
Long Term View: Freightways Ltd
Freightways Ltd: 2010 Half Year profit commentary
Freightways Ltd: 2009 Full Year profit commentary
Freightway's Capital Raising more of the same crap for small shareholders
Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result
Discuss FRE @ Share Investor Forum
Download FRE company Reports
NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill
Join the Share Investor Facebook Group
c Share Investor 2009
Posted by Share Investor at 12:01 AM 2 comments
Labels: capital raising, FBU, fletcher building, FRE, Freightways, SKC, sky city entertainment
Sunday, May 31, 2009
Stockmarket Education: How do you buy shares?
Like a piece I wrote a few days ago called Stockmarket Education: What is a Share? the following was inspired by a Google search that reached this blog "How to buy Shares?"
Another bloody good question.
Well, unfortunately one of the first things you will need to do is get yourself a stockbroker.(I say unfortunately because I don't particularly have a high opinion of them) The most popular ways of getting yourself access to one these days is online. One can do this either by hooking up with a dedicated broker that just deals in sharetrading or through your own bank, which in most cases in New Zealand and other countries has a broker service attached to it.
These online brokers, some of which also have telephone services, offer either a "self service" level of brokerage where you do all the research, and selection of shares and execute the buy or sell yourself ranging to a "full service" broker that will do all of the above for you and more if you trade enough!
Beware, and it is only my personal opinion and experience here, full service brokers will try and push their favourite shares on you and their research is more than often than not biased and sometimes suspect in its accuracy and/or knowledge of business or the company being researched. Their loyalties lie with the brokerage company first, not you.
That is why I prefer to use an online broker and do the rest myself. Pick the level of service that is right for you.
The only extra services that I get with my online broker, ASB Securities are:
1. A website with a portfolio and watchlist function.
2. Live share prices with limited market depth - a list of buyers and sellers and the prices being offered and asked.
3. Brief bios of the NZSX companies listed on the NZX - financial ratios, broker ratings.
4. A link to a cash management account through ASB Bank that makes it easy to transfer funds to facilitate share purchases.
When making a buy or sell of a share online you can either sell "at market" (what buyers or sellers on the open market are prepared to pay or sell for) or a pre-determined share price set by you.
The best part of buying online and doing it yourself is that you can do the research at your leisure and set a a buy or sell in off-market hours and the trade will then be made at the price you requested.
The cost for the self service online level of brokerage varies from broker to broker but trading using my online broker, is around NZ$30.00 for a trade of up to NZ$10,000 and at a level of 0.3% brokerage over that. Large trades can be negotiated.
You can find a list of Australian brokers here and New Zealand ones here.
Good luck!
Stockmarket Education
Stockmarket Dictionary
Stockbrokers: What you should know before choosing one
10 Basic questions to ask before investing
How the Stockmarket works
Understanding Risk
Watch Your Risk Tolerance
Stockmarket Education: What is a Share?
What Moves the Stockmarket?
7 Signs of Shareholder Friendly Management
Financial Media For Investors
Dividends in detail
Related Links
NZX - How to Invest
Recommended Amazon Reading
How the Stock Market Works: A Beginner's Guide to Investment by Michael Ivan H. Becket
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c Share Investor & Shareinvestor.net.nz 2009
Posted by Share Investor at 12:01 AM 0 comments
Friday, May 29, 2009
Analysis - Mainfreight Ltd: FY Profit to 31/03/09
Mainfreight Ltd [MFT.NZ] FY 2009 profit out today confirmed a slowdown in sales for the company and highlighted a tough environment for the coming 12 months. Having said that the current result was a good one.
Key Points:
1. Revenue increase of 39% to a record $NZ 1.27 billion (excluding forex gains up 28%)
2. Net surplus before abnormals of $NZ 40 million, on par with the prior year.
3. First half of year good growth, second very poor, indicating the full impact of the global slowdown, with a marked downturn in the last quarter.
4. A focus on cutting operating costs over the period of downturn in the business/economy.
5. A hat-tip to carbon emissions, noting they must take them into account because of political interference in this area of their business, but it is costing them.
6. Cashflow up strongly.
7. Debt increased significantly from $79.89 to $115.28 million.
The outlook for the company is uncertain and given poor economic indicators and a continued slowing performance in the latest quarter of business, profit is going to be down for the 2009/10 year.
They say this will be ameliorated somewhat by focusing on cost cutting, delaying capital expenditure and growing the business organically where they can - very sensible.
Given that the logistics business is one sector of the economy that is often badly affected during a recession, management at Mainfreight seemed to have managed the business well considering the slowdown in consumer demand world-wide and the resultant drop in export/import and local logistics being used in their operations worldwide.
8.5 out of 10 for me.
The stockmarket however has reacted negatively to this result, marking shares down 39c or 6.33% to NZ$4.59 at market close today.
Disclosure: I own MFT shares in the Share Investor Portfolio.
Mainfreight @ Share Investor
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) by Benjamin Graham
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Buy The Intelligent Investor & more @ Fishpond.co.nz
c Share Investor 2009
Posted by Share Investor at 12:01 AM 0 comments
Labels: Analysis - Mainfreight Ltd: FY Profit to 31/03/09, mainfreight