Merry Christmas and Happy New Year from Share Investor

I wish all my loyal readers a very happy Christmas and a prosperous 2010 New Year and to your family and loved ones.

It has been a pleasure writing on some my favourite subjects and I hope you have found some interesting tidbits to help you out in these very crazy financial times.

I hope you can all join me in 2010 where we can all do it again but this time with a smile and a wink!

To check out the holiday operating hours of the NZX and what is coming up please go here.

Darren, Share Investor.


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Security Analysis: The Classic 1934 Edition by GRAHAM
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c Share Investor 2009

Share Investor's top 12 Stockmarket/Business Awards for 2009

A list seems appropriate for the end of the year, everyone else is doing one so I might as well.

Here goes nothing.

CEO of 2009 - Russel Creedy from Restaurant Brands Ltd [RBD.NZ] For turning around the usually beleaguered fast food company by implementing better menus and service with a capital "S'.

Share price recovery - Restaurant Brands again for almost tripling their share price from a low of 62c to over NZ$1.60 in 12 months.

Management of the year - Mainfreight Ltd [MFT.NZ] As a whole the quality of management shone through as the logistics sector was particularly hard hit. Don Braid, Bruce Plested and the team they manage have negotiated their way through a bleak 2009.

Fraudsters of the year - Mark Hotchin and Eric Watson share this distinction. For going above and beyond the call of duty to fleece elderly investors of their life savings and walking away scot free. They should both be in prison.

Head in the sand award - Rod Oram and his ilk banging on about the fraud of Global Warming simply because they stand to make money by peddling this myth.

Stockmarket crusader award - Bruce Sheppard from the New Zealand Shareholders Association. When there is noise that needs to be made Brucie is there with his horned helmet ready to expose those that need to be seen in all their ingloriousness.

Worst performing major NZX stock/s - This would have to go to Nuplex [NPX.NZ] first and Fisher & Paykel Appliances [FPA.NZ] Nuplex destroyed millions of dollars of shareholder wealth by over extending themselves during the boom times and paying for it in 2009. Fisher & Paykel did the same but only stayed in the game because a capital rescue by the Chinese and their shareholders.

Sneaky IPO Prospectus award - Kathmandu Holdings [KMD.NZ] for hiding detail of their financial position in pro -forma accounts.

Wankers Award - ING and ANZ for duping clients out of hard earned cash after advised by bank tellers that investing in specific product being offered by ING that they were as safe as term deposits -turns out they were not!

Award for having no bark and no bite - The Securities Commission for failing to act in good time on fraudulent activity over finance company collapses and ongoing disclosure issues and insider trading of shares listed on the NZX.

Brand destruction Award - Cadbury for changing the recipe of their chocolate then vowing that customers wanted the change and would "get used to it" and after much pressure reversing the decision - lost sales to other chocolate producers.

Fire Sale of 2009 - Kirin bought the remaining part of Lion Nathan they didn't already own for a song - the "independent" report advised shareholders to sell but they could have gotten more.

From Fishpond.co.nz




c Share Investor 2009

Burger Fuel Worldwide: 2009 Half Year profit analysis

The Burger Fuel Worldwide [BFW.NZ] 2009 half year profit to 30 September is more of the same from this company, continued and mounting losses.

Revenue is up strongly but so are expenses, and the loss, while down by more than 50% to $NZ 296,000, is still a loss and is difficult to compare with last year's half year loss because that figure could be stacked with IPO expenses and other establishment costs -this is not clear from the accounts - and does include a more fulsome period of new store construction by new franchisees.

Cash reserves have dwindled down to below $1.5 million, from over $2 million in the previous corresponding period. While still conservatively geared at a debt to equity ratio of around 32% that cash balance is going to dwindle if the company is to get back on track and deliver the growth they promised in their July 2008 IPO.

As franchisors the only significant income BFW are currently receiving is their cut of franchisee sales and advertising income. The promised windfall of franchise and management fees are paltry at best.

More money was earned from cash in the bank than franchising and construction fees combined.



Key Points from BFW 2009 Half Year

1. $296,000 loss - down 54%

2. $4.2 million revenue - up 19%

3. Cash reserves down 25%

4. Earnings per share -52c VS -$1.26 last year

5. No new stores added

6. 2 stores in Australia incurring significant losses.

*Download the BFW half year Financials & other docs @ Share Investor Forum - Register free to download.


Burger Fuel Worldwide @ Share Investor

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Discuss this stock at Share Investor Forum - Register free




c Share Investor 2009

NZX Share Split good news for profit takers

The announcement of a 3:1 share split and improved dividend payout by the the New Zealand Stock Exchange Ltd [NZX.NZ] shows that directors of the company are confident that future performance of the company is going to exceed market expectations.

The share split is an attempt by the NZX to get more mum and dad investors on their share register as the bulk of shareholders are currently brokers -who used to privately own the company - and those on the "inside" of the stockmarket industry.

This is the second time the stock has split since its 2003 listing.

The theory of stock splits is that by making shares "cheaper" it increases liquidity and enables more people to own shares.

In practice though, splitting shares has no material long term effect on the company doing it - and nor should it - and rarely does much for liquidity.

The main effect a stock split has is to allow short term investors to make good quick profits based on the typical rise of the pre-split share price and then dump the shares before the stock splits.

Post split, shares sometimes rally as well so there is opportunity there to turn a fast buck.

This kind of "sleight of hand" with shares is rarely sustainable for any long term share price increase and it is back to basics for concrete results to get a real indication of a market value for a company.

If you are keen to make some fast moola there should be more to be made before the record date for the share split on Monday 21 December 2009 . The share split will happen after market close on Monday 21 December and be effective on, and from, market open on 22 December 2009.

NZX shares have rallied around 60c on the news since it came out on Monday 7 December so if you take the plunge please be aware of the risk involved.

Good luck!


Related Share Investor Reading

Understanding Stock Splits
What is a Reverse Stock Split?
Investor Education

Related Amazon Reading


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c Share Investor 2009