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Darren Rickard's Stockmarket, Investment & Business Blog - Shareinvestorblog.com
Posted by Share Investor at 6:26 AM 2 comments
Labels: folate in bread, Kate Wilkinson, Nanny State
Contact Energy Ltd [CEN.NZ] is a stock I used to own just before 9-11, in fact I moronically dumped it on that day due to my inexperience in the stockmarket at the time.
I bought in at NZ$3.10 at the IPO and picked more up at $2.66. I had 5000 at one stage for the princely sum of around $12000.00 bucks (you can smell the regret in this reminisce cant you?)
Meanwhile back in the present I think you can still get a relative bargain by buying this company. The share price has dropped around 7% since I last wrote about the company on June 8.
Contact had a 30% drop in half year profit to 31 December 2008, added NZ$550 million in debt through a public bond issue and expects its full year profit for the year ended 30 June 2009 to be down around 30% as well.
This doesn't make good reading but Contact has performed better than most during this recession. Contact's lower profit was to do with higher water levels in dams bringing down their wholesale energy prices. It wasn't recession related at all apart from the shutdown of some of Comalco, a large power user and profit is unlikely to get much worse than this.
That is one reason why I continue to watch this stock closely, its recession proof nature.
One other good reason to buy, if you were looking at this stock over the last year, is that its stock price is near its 52 week low of $5.47, closing at $5.63 last Friday and you cant get a better reason than that.
The company is a good long term bet and even a good short to medium term money maker for those of you with a short attention span. I say this because the share price seems to get good support at current price levels and the company always has the sword of takeover from its Aussie majority owner parent Origin Energy Ltd [ORG.AU] hanging over it.
Keep it on your watchlist too if you have been thinking of adding it to your portfolio.
I am getting my buy finger ready.
Contact @ Share Investor Blog
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Politicized Economies: Monarchy, Monopoly, and Mercantilism (Texas a & M University Economics Series) by Robert B. Ekelund
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Posted by Share Investor at 4:05 AM 0 comments
Labels: Contact Energy, stock pick
Posted by Share Investor at 7:54 PM 6 comments
Labels: 60 Minutes, Kristen Dunne-Powell, Morgan Dunne-Powell
An interview in Granny NZ Herald yesterday with Jane Hastings, general manager of Sky City Entertainment's [SKC.NZ] cinema division prompted me to have another go at this part of the Sky City asset portfolio.
Long term readers of this blog (two years is a long time in the blog world) and the struggling Share Trader chat site will know that I wouldn't touch a movie chain business with a barge pole the length of a CinemaScope screen.
The Herald and its interviewee seem particularly bullish on the movie business at present. Strong attendances, a growing market share for Sky City Cinemas and good product coming up, like the latest Harry Potter and the Half-Blood Prince (2009) movie all look positive.
Add to this the very large capital expenditures that this division has made expanding the business over the last 5 years have been ameliorated of late because of oversupply and you might think you have a business that is a blockbuster ready to print money.
Balance the good news with this though.
Although cinemas are a good cash business, especially during these cash strapped hard economic times, extra revenue doesn't necessarily make for extra profit. Costs have risen along with higher attendance and there will always be more expense to improve technology and modernise facilities.
Recessions like the ones we are currently experiencing are boom times for the entertainment business and cinemas are no exception but investors in Sky City should be aware that the spike in fortunes for their cinema business are fleeting and in the normal cycles of business, the downs are far more frequent than the ups and more often than not the down times are when many cinema operators put up the going out of business sign.
Sustained acceptable returns for the cinema business are simply not the way this sector functions and history is littered with the carcasses of individuals and corporations who have sunk money into cinema that have gone bankrupt or no longer exist.
Best Sky City management use shareholders capital to repay debt as they did earlier last week.
Sky City Cinemas is no different from the rest and I must reiterate dear reader, for the sake of the shareholder, this part of the group's business must be given a Dirty Harry bullet before it drags the rest of the company down with it.
Disclosure I own SKC shares
Visit Sky City Cinemas
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Posted by Share Investor at 12:01 AM 0 comments
Labels: Jane Hastings, Sky City Cinemas, sky city entertainment