Long Term View: Fisher & Paykel Appliances

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO.

The calculation of returns includes dividends and tax credits.

Fisher & Paykel Appliances Ltd [FPA.NZ] had been very good to its shareholders in terms of returns since its forerunners NZX listing in 1979 - we will only be looking at the last 8 years of available data since FPA became a fully separate company from Fisher & Paykel Healthcare [FPH.NZ] and listed on November 16 2001 at $NZ2.25 (adjusted for a 4:1 FPA stock split in 2004). With $NZ 1.44 cents in net dividends (see chart above) paid and another 33% of that figure gained for those eligible for associated tax credits, a slightly more than 11% return (see chart below for the share price percentage gain against the average of all NZX indexes) over the 8 year available data gives an approximate annual net return of just over 1.37 %.

This is more than 10 times worse than the return from the average of all NZX indexes.




Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
Briscoe Group Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hellaby Holdings Ltd
Mainfreight Ltd
Metlifecare Ltd
New Zealand Refining Ltd
Port Of Tauranga Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd


Fisher & Paykel Appliances @ Share Investor

Stock of the Week: Fisher & Paykel Appliances
Fisher & Paykel Appliances future looking bleak
Fisher & Paykel downgrade continues fine tradition
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Fisher & Paykel: A Tale of Two Companies
Fisher & Paykel Appliances: In a spin over nothing

Discuss FPA @ Share Investor Forum

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Telecom NZ: TV3 60 Minutes Segment more like Corporate PR

As an exercise in spin, the piece on 60 Minutes last night about Telecom NZ [TEL.NZ] XT Mobile Network failure was barely able to fool the foolish let alone those intelligent enough to leave the network over their recent failures.

Telecom corporate video was used to show the viewer that yes Telecom and its employees were human too and that we all make mistakes. We were supposed to feel sympathy for the hapless tel-co but most watching, especially XT customers, would have instead been close to physically sick.

Blame was apportioned to Acaltel, little to the man ultimately responsible, CEO Paul Reynolds, and it was suggested throughout that it was time for disgruntled Telecom customers to "move on".

Once again PR cannot take the place of actual service and making the product a good one, especially when it fails to live up to company promised expectations.

Arrogant, empty and inward looking, just like the culture at head office, a culture that will ultimately kill the company.

Telecom shareholders would have cringed just as much as they would have over the falling share price.



Telecom NZ @ Share Investor

Telecom Share Price Limbos but has it jumped the Shark?
Telecom NZ: Saint Gattung gets her Ya Ya's out
Telecom NZ: Bye Bye Paul Reynolds
Long Term View: Telecom NZ Ltd
Stock of the Week: Telecom Ltd
Revisiting Telecom
Getting cute and fluffy with Teresa Gattung
Telecom NZ Hangs up
Business Gobbledygook puts up barriers to communication
A Rare Breed
Telecom NZ facing a watershed period
Biology a major key in "glass ceiling" for women
Telecom rewards Gattung for mediocrity

Download every available TEL Annual Report Free


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Telecom Share Price Limbos but has it jumped the Shark?

How low Telecom NZ [TEL.NZ] shares could go has been the subject of talk not only in the business media today but in the mainstream non biz as well.

At close of market today TEL shares reached a new all time low of NZ$2.15 on very high volume after touching $2.13 earlier post regulation from Government raising its ugly head again yesterday and the continued woes of the XT Mobile Network failure.

The question for investors remains. Should you be getting in or getting out and if you want to buy in should you buy now?

It is no secret to my readers that I have been bagging this company as a long-term investment for over 10 years but in the short term you stand to make some easy money.

Having said that if you had participated in the 1992 TEL IPO then you would have had an annual return of around 25% net for the last 18 years if you include dividends and are eligible for the full tax credits - 35% better than the average of all NZX indicies.

Those days are over though as the dividends will be under pressure in the medium to long-term and the prospects for profit growth look bleak.

Bad news is good news though!

As least for the short term.



The previous share price floor seemed to be around the $2.25 mark (see 6 month chart above) where buyers came in, volume was up and the share price stabilised and then rose from that point.

The chart does look like one hell of an ugly sister (it keeps going down) but there could be good opportunities here for those patient investors.

More bad news could lead to a serious drop to below the 2 buck mark and at that point all is on for young and old because the bargain hunters will be out at some stage - as they were today.

I wouldn't touch it yet though. I would be a patient wallflower, wait for the drunken suitor to throw up in the garden and then pounce to wipe his chin off.

Somewhere near two bucks would be a good time to enter the party.

When to leave is another story entirely.

If you get a hangover please don't blame me.




Telecom NZ @ Share Investor

Telecom NZ: Saint Gattung gets her Ya Ya's out
Telecom NZ: Bye Bye Paul Reynolds
Long Term View: Telecom NZ Ltd
Stock of the Week: Telecom Ltd
Revisiting Telecom
Getting cute and fluffy with Teresa Gattung
Telecom NZ Hangs up
Business Gobbledygook puts up barriers to communication
A Rare Breed
Telecom NZ facing a watershed period
Biology a major key in "glass ceiling" for women
Telecom rewards Gattung for mediocrity

Download every available TEL Annual Report Free


Discuss this stock at Share Investor Forum - Register free

Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

Buy Bird on a Wire & more @ Fishpond.co.nz




c Share Investor 2010