Are Insiders selling Sky City Stock?

With Sky City Entertainment Group [SKC.NZ] announcing a profit next Tuesday, the recent dramatic drop -SKC shares have fallen by almost 9% in 2 weeks - in share price for this company could mean a number of things.

The obvious reason is that investors are simply no longer interested in holding because of overall market sentiment and this has been shared with other stocks falling in a similar fashion - Telecom NZ [TEL.NZ] but one example.

The other reason could be insiders selling due to some sort of negative news coming in the profit announcement.

This stock has been prone to insider selling before profit announcements in the past and I wouldn't discount that insiders are doing the same again before Tuesday.

With a good result indicated by management last year it cant be the profit part of Tuesday's announcement but it could be a slightly worse number than telegraphed.

Perhaps a dividend cut, a poor future outlook or something unexpected is on the cards.

This is all idle speculation on my part but the big share price drop before another profit announcement is worth noting.

Of course if nothing material is going on the share price drop represents another opportunity to buy this stock, long or short term.



Sky City shares dropped 6c to NZ$3.10 in a down market on larger than average volume yesterday.

Disclosure: I own SKC shares in the Share Investor Portfolio


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c Share Investor 2010

Telecom New Zealand: How low can it go?

Telecom NZ [TEL.NZ] has become a bit of an obsession for me from the end of last week because of its spectacular drop in share price. I picked it as Stock of the Week this week because of its poor share price and opportunities that exist to buy as a result.

It is now testing a 52 week low of NZ$2.26 having finished at $2.28 at close of trading yesterday.

With market sentiment in the doldrums and a poor quarterly profit to report this Friday, if we get a combination of negative pressure Telecom's share price will probably test an all time low if it hasn't already. (see chart above)

I cant find the 1991 IPO price for the company but from the chart it looks like the current share price is close to its IPO price.

It is an ugly looking chart I must say, with a peak during the dot com boom and downhill all the way since then.

Just as an aside, I wonder if CEO Paul Reynolds is going to give back his huge incentive bonus for company performance (presumably he received it for positive performance) last year, considering poor company performance over 2008-2009 and the associated share price drop ?

It is rhetorical question of course but Paul should consider giving it back, his shareholders need to put some pressure on him to perform. The chart says he hasn't and so does the bottomline.

Telecom @ Share Investor

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From Amazon


Telecom Crash Course, Second Edition by Steven Shepard
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Stock of the Week - Reprise: Telecom NZ Ltd

I picked this stock on December 8 as Stock of the Week because of its $2.36 share price. Since then the stock lifted to just below $2.60 on January 10 (around 10% gain so well done if you bought at the lower price levels) before tracing back to finish at $2.31 on close of market last Friday. This is why I have picked the stock again

Telecom New Zealand Ltd [TEL.NZ] is a good stock to trade rather than hold long term (see chart below for comparison with NZX50 gross index) simply because the trading volume is consistently the highest on the NZX so a good stock to make a quick buck on.

I am not a chart man myself or a short term trader but if you look at the one year chart above there has been a good deal of money to be made in the earlier part of 2009, going from around 10c per share right up to 60c per share profit.

The share price reached an 10 month low of NZ$2.31 Friday and has traded like a roller coaster (hence the trade possibilities) from a year low reached in mid January 2009, so one could assume that indicators are showing that an opportunity exits for a good trade at these stock price levels and a good range for profit made considering its recent trading history.

Please beware though, although I am picking this stock today to give traders a heads up (seasoned traders of course will already know about this opportunity) given the present volatility in global stockmarkets and the negative attitude to stocks at present the patient bargain hunters could well get this stock at a lower price than $2.31 but having said that, it is close to its all time low of around $2.25 reached December 2008. (see chart below)

I don't like the long-term prospects for the company, it still has a defensive, reactive culture with employees who are badly trained and informed on what they are selling and poor service levels but it has a 10% plus gross dividend and it isn't going to go out of business any time soon.

Shorties will win here.

Good luck!

Telecom @ Share Investor

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