Share Investor Portfolio: Value @ 20 May 2011

The Share Investor Portfolio was up in the third week of May. The portfolio was up by 0.99% or $2557.94 on the May 13 update . For the first 19 weeks of 2011 the portfolio has increased by 16.14 % or $41846.53 . This weeks rise was due, primarily, to a 3c rise in SKC, a 6c gain in FRE and a 4c gain in MFT. There were small rises in a few stocks and a larger number of smaller falls across the board.

$70.00 in dividends from KIP & $190.00 from RYM were included.

There was also $88.43 added from interest earned on dividend pool money.

The total of unspent dividends and interest in the bank as at 22 May from the 2010 - 2011 earnings years is $24482.95* at close of reporting season for 2010 and near the end of the 2011 1st half reporting year. There are also approx $50000.00 in tax credits earned from the portfolio since it began in late 2002.

The Share Investor Portfolio has increased in value by 20.93% or $55603.78 since I began tracking it for this blog on October 11 2010.

Share Investor Portfolio as at 17:30:00, Friday 20 May, 2011 (NZT)

Stock	Quantity	Cost price	Total cost	Market price	Market value	Change	%
AIA	2,000	$1.700	$3,400.00	$2.315	$4,630.00	$1,230.00	36.18%
AIA	2,000	$1.510	$3,020.00	$2.315	$4,630.00	$1,610.00	53.31%
AIA	558	$0.000	$0.00	$2.315	$1,291.77	$1,291.77
AIA	754	$2.150	$1,621.10	$2.315	$1,745.51	$124.41	7.67%
ASBPB	3,109	$0.000	$0.00	$0.670	$2,083.03	$2,083.03
ASBPB	6,891	$1.000	$6,891.00	$0.670	$4,616.97	$2,274.03	33.00%
BGR	619	$0.000	$0.00	$1.510	$934.69	$934.69
BGR	2,381	$0.990	$2,357.19	$1.510	$3,595.31	$1,238.12	52.53%
FBU	284	$0.000	$0.00	$9.180	$2,607.12	$2,607.12
FBU	830	$9.750	$8,092.50	$9.180	$7,619.40	$473.10	5.85%
FPH	3,000	$2.350	$7,050.00	$3.110	$9,330.00	$2,280.00	32.34%
FPH	541	$0.000	$0.00	$3.110	$1,682.51	$1,682.51
FPH	1,459	$3.720	$5,427.48	$3.110	$4,537.49	$889.99	16.40%
FRE	2,054	$0.000	$0.00	$3.520	$7,230.08	$7,230.08
FRE	6,577	$3.630	$23,874.51	$3.520	$23,151.04	$723.47	3.03%
GFF	586	$0.000	$0.00	$1.400	$820.40	$820.40
GFF	1,414	$2.330	$3,294.62	$1.400	$1,979.60	$1,315.02	39.91%
HLG	299	$0.000	$0.00	$4.170	$1,246.83	$1,246.83
HLG	701	$2.530	$1,773.53	$4.170	$2,923.17	$1,149.64	64.82%
KIP	763	$1.480	$1,129.24	$1.045	$797.34	$331.91	29.39%
KIP	237	$0.000	$0.00	$1.045	$247.67	$247.67
MFT	1,000	$7.960	$7,960.00	$9.490	$9,490.00	$1,530.00	19.22%
MFT	1,838	$8.000	$14,704.00	$9.490	$17,442.62	$2,738.62	18.63%
MFT	657	$0.000	$0.00	$9.490	$6,234.93	$6,234.93
MFT	1,505	$4.200	$6,321.00	$9.490	$14,282.45	$7,961.45	125.95%
MHI	1,646	$0.860	$1,415.56	$0.930	$1,530.78	$115.22	8.14%
MHI	7,000	$0.630	$4,410.00	$0.930	$6,510.00	$2,100.00	47.62%
MHI	494	$1.050	$518.70	$0.930	$459.42	$59.28	11.43%
MHI	860	$0.000	$0.00	$0.930	$799.80	$799.80
PPG	31	$0.000	$0.00	$0.250	$7.75	$7.75
PPG	1,500	$0.440	$660.00	$0.250	$375.00	$285.00	43.18%
PPG	1,004	$0.800	$803.20	$0.250	$251.00	$552.20	68.75%
PPL	1,000	$3.090	$3,090.00	$1.190	$1,190.00	$1,900.00	61.49%
PPL	1,000	$2.870	$2,870.00	$1.190	$1,190.00	$1,680.00	58.54%
PPL	939	$4.200	$3,943.80	$1.190	$1,117.41	$2,826.39	71.67%
PPL	975	$0.000	$0.00	$1.190	$1,160.25	$1,160.25
PPL	1,086	$1.530	$1,661.58	$1.190	$1,292.34	$369.24	22.22%
RYM	555	$0.000	$0.00	$2.760	$1,531.80	$1,531.80
RYM	4,445	$1.970	$8,756.65	$2.760	$12,268.20	$3,511.55	40.10%
SKC	5,750	$7.430	$42,722.50	$3.740	$21,505.00	$21,217.50	49.66%
SKC	1,000	$7.600	$7,600.00	$3.740	$3,740.00	$3,860.00	50.79%
SKC	2,750	$7.700	$21,175.00	$3.740	$10,285.00	$10,890.00	51.43%
SKC	1,431	$8.750	$12,521.25	$3.740	$5,351.94	$7,169.31	57.26%
SKC	272	$4.720	$1,283.84	$3.740	$1,017.28	$266.56	20.76%
SKC	25,712	$0.000	$0.00	$3.740	$96,162.88	$96,162.88
STU	78	$0.000	$0.00	$2.690	$209.82	$209.82
STU	303	$4.740	$1,436.22	$2.690	$815.07	$621.15	43.25%
WHS	4,500	$3.730	$16,785.00	$3.680	$16,560.00	$225.00	1.34%
WHS	6,979	$6.000	$41,874.00	$3.680	$25,682.72	$16,191.28	38.67%
WHS	15	$3.710	$55.65	$3.680	$55.20	$0.45	0.81%
WHS	3,506	$0.000	$0.00	$3.680	$12,902.08	$12,902.08

32.76%

	Total cost	Market value	Change
	$270,499.12	$359,120.66	$88,621.54

*Adjusted up because of prior error


Share Investor Portfolio @ Share Investor

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Share Investor Dividends


Share Investor's Annual Stock Picks

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c Share Investor 2011

Share Price Alert: Telecom New Zealand Ltd 3

Telecom NZ Ltd [TEL.NZX] shares have had an amazing run over the last month or so where the share price has taken off from $1.95 in mid April to finish trading at $2.33 yesterday, a rise of almost 20%.

With a share-price last reached in February - a 52 week high for the stock - the stock looks like getting overcooked to me and investors wishing to take a punt on anything that may come out of the fibre network rollout may want to temper their excitement because any additional revenue coming from it is many years away.

For the majority of the last year shares have been trading below 2 bucks and this is on 4 pieces of news out a month ago ( 1, 2, 3, 4 ) mostly related to taxpayer funded broadband.

The market is excited by the prospects for Telecom that subsidised broadband might bring but the payback for investment by the taxpayer and by the company itself is uncertain especially given the low speeds the company indicate their new fibre might bring and the restrictions and frustrations that will bring for customers as they realise they will not be able to do even a fraction of the things their mates overseas have been able to do for a decade or more already and that future speeds for global internet speeds (sans NZ) will be hundreds of times faster than ours.

I have a gut feeling the increased buying has come about from speculation that the company will win the majority of the tenders to rollout taxpayer funded broadband and if this happens Telecom as a company will have to be split into 2 separate companies, each presumably with its own NZX listing. Investors clearly see more value in the company as two seperate entities and see windfall profits if the company splits.

There is of course no guarantee that Telecom will win the majority of the government contracts, but more likely than not it will, and history typically shows that investors do benefit from company splits of this kind.

Market watchers though are ignoring the bungles the company has mismanaged with the introduction of new services and technology in the past so I remain skeptical of share price increases based on the possibility that the fibre roll-out will bear some positive fruit.

Until then performance for the company is likely to be more along the lines of weakening revenue, smaller profits and cost cutting.

Buy closer to 2 bucks on the inevitable pullback.


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c Share Investor 2011

John Key: Budget Speech 2011

Budget Debate - 19th May, 2011 - Part 1

Budget Debate - 19th May, 2011 - Part 2

I have never seen any politician give such a riveting, witty, confident and informative speech in parliament like the Prime Minister did last night in the 2011 budget speech - he was on fire!

His speech held the attention of the whole house and he had everyone eating out of his hand, not perhaps for his politics, but the mere delivery of his message. The house was captivated by his display of knowledge of things financial and the answers he had to rebuff Phil Goff's sorry speech that was filled with inconsistency, doubt, half truths and knowledge of the economy that a 2 year old might have. -apparently, according to Phil, the global financial crises was over in 2009.

It is clear that John Key is the man for the time, he knows it, Labour know it and the overwhelming part of our population does as well.

As Matthew Hooton said yesterday, "you have 2 choices come November 26, a Labour Party run by Phil Goff or a Labour Party run by John Key".

Johnny, has out Laboured Labour.

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c Darren Rickard 2011

Larger Incentives for Sky City CEO Make Sense

There is nothing like a good and appropriate incentive to get an individual to do a better job and in the case of Sky City Entertainment Group [SKC.NZX] CEO Nigel Morrison , to retain his services for a longer period.

The Sky City board announced yesterday that Morrison's incentive package will be sweetened to potentially triple his current incentive package which currently sits at interest free loans to purchase $1.2 million shares based on hitting a number of financial targets.

The new deal allows Morrison to receive SKC shares worth up to $3.6 million immediately rather than wait for 2-3 years as per the old plan. This incentive is based on the company’s financials for the six month period to 31 December 2010, which were announced to the market on 16 February 2011. Incentives based under a long-term incentive plan are in addition to his salary, which was stated in last year's annual report as $2,556,408.

Now it is not often that I champion increased pay packages for CEO's and boards (you can bet other executives will be getting bigger pay packages in the near future) but under Morrison's tenure profit for the company has risen from $102 million before his appointment to a record $129 million to June 30 2011 (see 2010 Annual Report) so his bonus for results and retaining him for the medium term is a very good move by the board and one that other boards should look to to incentivise CEOs.

My only gripes are that given his track record of raising profit by 30% in 3 years the potential tripling of his pay appears mostly for retaining him rather than his past results and that the board sought a waivier from the NZX rather than consulting owners like myself who would have gladly voted some sort of increase in incentive.

Nigel Morrison therefore will be under intense pressure to deliver big increases in profit over the next 3 years and I can only see one more big result coming in 2012 full year to 3o June due to the 2011 Rugby World Cup before he will have to spend some big money either buying another casino somewhere in Australasia or spending much larger sums that he already is to increase foot traffic through his casinos.

Of course this sort of incentive does have the risk that the CEO will take bigger risks to get his bonus but he does have a track record of good results wherever he has been in charge and as he is an accountant by trade they tend to be completely focsed on the bottomline before anything else and that cannot be a bad thing at all where shareholders moola is concerned.


Disc: I own SKC shares in the Share Investor Portfolio


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c Share Investor 2011