Share Investor

Monday, May 30, 2011

Telecom New Zealand Ltd: Chorus or Bust

Telecom New Zealand Ltd [TEL.NZX] has been in the news for the past week because the government has announced that they are going to be the company that will roll out the majority of the taxpayer subsidised Fast Fibre Network (FFN) that will apparently provide far greater speeds for our internet services than we currently have.

This means that Telecom NZ must split into two separate companies in order to satisfy the rules and regulations that government have set down for the implementation of the FFN.

This will mean that Chorus, the part of Telecom whose business it is to build and maintain telecommunications infrastructure for themselves and other players and its retail arm, Telecom Retail - the part of the company that most customers of Telecom deal directly with and where they buy their mobile, internet or fixed line products - must be split into two completely separate companies. This means separate listings on the stockmarket for both companies and a duplication of a whole host of management from the floor sweeper middle manager right up to the CEO.

Of course this means cost to separate and will be bourne by TEL shareholders in the first instance and customers through higher prices as a secondary affect of this.

Investors will of course be wondering to themselves, well which company of the two should I invest in and if I am already a TEL shareholder which stock should I ditch, if any?

In my humble and not so humble opinion I would put my money of the Chorus part of the business. It is the part of Telecom that has a huge monopoly through the domination of their telecommunications infrastructure - copper and fibre cable criss-crossing the country - and as I really love monopolies this part of the companies business will do well, especially as they appear to have a unregulated first 10 years where they can set prices and the only arbiter of consumer fairness will be the usually intemperate Commerce Commission.

While Telecom's retail division has a few million customers that the new Chorus will probably look after, competition in the telecoms retail area should eventually keep all important margins down from present levels and that will impact on the profitability of the new separate retail division of Telecom.

The split coming at the end of 2011 will mean investors in Telecom will receive stakes in the two new separate Telecom entities and will probably do well if they bought the companies shares at the right price.

It might be wise though for them to consider selling shares in the retail company and stock up on Chorus shares.

My pick is that Telecom will take this opportunity to ditch the Telecom name altogether, a name wrapped up in so much negative history that their retail business would do better to leave that all behind.

Judging by their recent logo shoosh-up it is bound to be something silly.

I'm picking Burst!

Telecom Split Details

Telecom Split

Telecom NZ @ Share Investor

Share Price Alert: Telecom New Zealand Ltd 4
Share Price Alert: Telecom New Zealand Ltd 3
Share Price Alert: Telecom New Zealand Ltd 2
Share Price Alert: Telecom New Zealand Ltd
Telecom New Zealand 2011 first half profit review
Telecom New Zealand 2011 first quarter profit review
Telecom Chart: Lazarus Recovery on lower volume
Telecom maybe oversold
Telecom NZ Share Price has "Jumped the Shark"
I was Wrong... sort of
Telecom NZ: TV3 60 Minutes Segment more like Corporate PR
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 TEL Company Reports
Discuss TEL at Share Investor Forum - Register free

From Fishpond.co.nz

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

c Share Investor 2011

Friday, May 27, 2011

Share Investor Portfolio: Value @ 27 May 2011

The Share Investor Portfolio was down in the forth week of May, the first time in months. The portfolio was down by 1.13% or $3338.86 on the May 20 update . For the first 20 weeks of 2011 the portfolio has increased by 15.01 % or $38507.67 . This weeks drop was due, primarily, to a 4c drop in SKC, a 8c fall in WHS and a 22c plunge in FRE. There were a number of smaller falls in other stocks but if not for a huge rally of 42c for MFT the portfolio would have been down almost double this weeks fall.

$550.00 in dividends from MFT FY 2011 profit result & $350.00 from FPH FY 2011 profit result were included.

The total of unspent dividends and interest in the bank as at 26 May from the 2010 - 2011 earnings years is $25382.95 at close of reporting season for 2010 and at the end of the 2011 1st half reporting year. There are also approx $55000.00 in tax credits earned from the portfolio since it began in late 2002.

The Share Investor Portfolio has increased in value by 19.80% or $52264.92 since I began tracking it for this blog on October 11 2010.

Share Investor Portfolio as at 17:30:00, Friday 27 May, 2011 (NZT)

Stock

Quantity

Cost price

Total cost

Market price

Market value

Change

AIA

2,000

$1.700

$3,400.00

$2.270

$4,540.00

$1,140.00

33.53%

AIA

2,000

$1.510

$3,020.00

$2.270

$4,540.00

$1,520.00

50.33%

AIA

558

$0.000

$0.00

$2.270

$1,266.66

AIA

754

$2.150

$1,621.10

$2.270

$1,711.58

$90.48

5.58%

ASBPB

3,109

$0.000

$0.00

$0.670

$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

$1.480

$916.12

BGR

2,381

$0.990

$2,357.19

$1.480

$3,523.88

$1,166.69

49.49%

FBU

284

$0.000

$0.00

$8.840

$2,510.56

FBU

830

$9.750

$8,092.50

$8.840

$7,337.20

$755.30

9.33%

FPH

3,000

$2.350

$7,050.00

$2.990

$8,970.00

$1,920.00

27.23%

FPH

1,365

$3.720

$5,077.80

$2.990

$4,081.35

$996.45

19.62%

FPH

635

$0.000

$0.00

$2.990

$1,898.65

FRE

2,054

$0.000

$0.00

$3.300

$6,778.20

FRE

6,577

$3.630

$23,874.51

$3.300

$21,704.10

$2,170.41

9.09%

GFF

586

$0.000

$0.00

$1.330

$779.38

GFF

1,414

$2.330

$3,294.62

$1.330

$1,880.62

$1,414.00

42.92%

HLG

299

$0.000

$0.00

$4.150

$1,240.85

HLG

701

$2.530

$1,773.53

$4.150

$2,909.15

$1,135.62

64.03%

KIP

763

$1.480

$1,129.24

$1.055

$804.97

$324.28

28.72%

KIP

237

$0.000

$0.00

$1.055

$250.04

MFT

1,000

$7.960

$7,960.00

$9.910

$9,910.00

$1,950.00

24.50%

MFT

1,838

$8.000

$14,704.00

$9.910

$18,214.58

$3,510.58

23.88%

MFT

1,375

$4.200

$5,775.00

$9.910

$13,626.25

$7,851.25

135.95%

MFT

787

$0.000

$0.00

$9.910

$7,799.17

MHI

1,646

$0.860

$1,415.56

$0.940

$1,547.24

$131.68

9.30%

MHI

7,000

$0.630

$4,410.00

$0.940

$6,580.00

$2,170.00

49.21%

MHI

494

$1.050

$518.70

$0.940

$464.36

$54.34

10.48%

MHI

860

$0.000

$0.00

$0.940

$808.40

PPG

$0.000

$0.00

$0.260

$8.06

PPG

1,500

$0.440

$660.00

$0.260

$390.00

$270.00

40.91%

PPG

1,004

$0.800

$803.20

$0.260

$261.04

$542.16

67.50%

PPL

1,000

$3.090

$3,090.00

$1.180

$1,180.00

$1,910.00

61.81%

PPL

1,000

$2.870

$2,870.00

$1.180

$1,180.00

$1,690.00

58.89%

PPL

939

$4.200

$3,943.80

$1.180

$1,108.02

$2,835.78

71.90%

PPL

975

$0.000

$0.00

$1.180

$1,150.50

PPL

1,086

$1.530

$1,661.58

$1.180

$1,281.48

$380.10

22.88%

RYM

555

$0.000

$0.00

$2.690

$1,492.95

RYM

4,445

$1.970

$8,756.65

$2.690

$11,957.05

$3,200.40

36.55%

SKC

5,750

$7.430

$42,722.50

$3.700

$21,275.00

$21,447.50

50.20%

SKC

1,000

$7.600

$7,600.00

$3.700

$3,700.00

$3,900.00

51.32%

SKC

2,750

$7.700

$21,175.00

$3.700

$10,175.00

$11,000.00

51.95%

SKC

1,431

$8.750

$12,521.25

$3.700

$5,294.70

$7,226.55

57.71%

SKC

272

$4.720

$1,283.84

$3.700

$1,006.40

$277.44

21.61%

SKC

25,712

$0.000

$0.00

$3.700

$95,134.40

STU

$0.000

$0.00

$2.620

$204.36

STU

303

$4.740

$1,436.22

$2.620

$793.86

$642.36

44.73%

WHS

4,500

$3.730

$16,785.00

$3.600

$16,200.00

$585.00

3.49%

WHS

6,979

$6.000

$41,874.00

$3.600

$25,124.40

$16,749.60

40.00%

WHS

$3.710

$55.65

$3.600

$54.00

$1.65

2.96%

WHS

3,506

$0.000

$0.00

$3.600

$12,621.60

31.63%

	Total cost	Market value	Change
	$269,603.44	$354,886.12	$85,282.68

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: $9.73
Usually ships in 24 hours

Security Analysis: The Classic 1934 Edition by GRAHAM
Buy new: $37.80 / Used from: $29.48
Usually ships in 24 hours

Buy these two Books @ Fishpond.co.nz

c Share Investor 2011

Share Price Alert: Fisher and Paykel Appliances Ltd

This is a preemptive Share Price Alert for Fisher & Paykel Appliances [FPA.NZX] after a reasonable profit result for the 2011 full year. After sustaining years of losses, struggling for the last 5 years, and going into financial meltdown in 2009 where it had to be rescued by Haier, the company has just posted a profit north of $30 million.

A pretty good result in the current financial climate and after a year and a half on a share price in the penny dreadful status this result looks set to propel the share price well above the closing price of 55.5c yesterday and back above the 1 buck level.

Of course the company has had rollercoaster results like this before when they have showed improvements in financial operations then disappointed at the next result so a word of caution must be stated before climbing back into this one.

Some good money can be made here though for those willing to buy today and coming week and hold for a short to medium term then run for the hills with the spoils.

Anything under a buck should see some black ink in the wallet over the coming weeks.

Share Price Alert Series

Telecom New Zealand Ltd 4
Telecom New Zealand Ltd 3
Port of Tauranga Ltd
Freightways Ltd 3
Goodman Fielder Ltd 2
Freightways Ltd 2
Telecom New Zealand Ltd 2
Ryman Healthcare Ltd
Charlies Group Ltd
Fletcher Building Ltd 2
Contact Energy Ltd
Steel & Tube Ltd
Telecom New Zealand Ltd
New Zealand Stock Exchange Ltd
Mainfreight Ltd 2
The Warehouse Group Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd 2
Fletcher Building Ltd
Restaurant Brands Ltd
Mainfreight Ltd
Tourism Holdings
Goodman Fielder Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
NZ Refining Ltd
Freightways Ltd
Xero Ltd

Fisher & Paykel Appliances @ Share Investor

Fisher & Paykel Appliances: Worth a second look?
Long Term View: Fisher & Paykel Appliances
Stock of the Week: Fisher & Paykel Appliances
Fisher & Paykel Appliances future looking bleak
Fisher & Paykel downgrade continues fine tradition
Fisher & Paykel Appliances looking fair value
Fisher & Paykel: A Tale of Two Companies
Fisher & Paykel Appliances: In a spin over nothing

Discuss FPA @ Share Investor Forum
Download FPA Company Reports

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 The Intelligent Investor & more @ Fishpond.co.nz

c Share Investor 2011

Thursday, May 26, 2011

Mainfreight Ltd: Full Year 2011 Profit Analysis

Mainfreight Ltd [MFT.NZ] has had a very good 2011 full year profit result considering the state of the world economy and the subsequent slow down in world trade. The result is a record one and is up 30% (before abnormals) on the 2010 full year announcement.

Key Points

1. Total revenue (sales) increased by 20% to $1.34 billion, from $1.13 billion last year

2. A net surplus after taxation and abnormals of $47.24 million for the twelve months of the 2011 financial year; an increase of 30% on the previous year’s result of $36.37 million.

3. A big focus on cutting operating costs over the period of downturn in the business/economy, with more than $32 million cut.

4. A massive increase North American revenues of 24.8% to $420.47 million and EBITDA improving 101.3% to $14.63 million.

5. Australian operations increased 20.4 % to $472.29 million from $392.33 million and EBITDA improved 14.1% to $25.63 million.

6. New Zealand operations increased 10.0% to $412.57 million from $374.97 million. EBITDA improved 8.6% to $47.86 million,

7. Asian business improving 29.8% to $36.17 million and EBITDA improving 68.7% to $3.47 million.

8. Net debt decreased to $47.55 million from $82.89 million

9. 11c dividend, increased by 10% on last year.

Management have done well to come in with a higher full year profit. They did this by cutting back fat in the business, reducing capital expenditure and improving revenue strongly across all geographical regions in which they operate.

Mainfreight have indicated to the market that they see this result as somewhat of a turning point for the company after a tough last 3 years of pressure from the fallout from the 2008 financial crises. They are especially excited about including for the first time revenue and profit from the purchase of Wim Bosman Group in March. This acquisition will clearly have a further positive impact for full year 2012.

As things have started looking up the company look to use more capital to expanbd through FY 2012.

I remain cautious but optimistic about the coming year, with global economic conditions still looking sluggish this latest result might be more of a one off rather than one the company can sustain through 2012. Having said that the additional revenue from their Wim Bosman Group purchase will have a good upside.

9.8 out of 10.

Disc I own MFT shares in the Share Investor Portfolio

Mainfreight @ Share Investor

Read the MFT 2011 FY Presentation

Share Price Alert: Mainfreight Ltd 2
Mainfreight's European Acquisition a Good Move
Share Price Alert: Mainfreight Ltd
Investing in the Stockmarket: Timing your Purchase
Stock of the Week: Mainfreight Ltd
Mainfreight Ltd: 2011 1st quarter Profit Analysis
VIDEO: Don Braid with Paul Homes on the Economy
Mainfreight Ltd: Full Year 2010 Profit Analysis
Long Term View: Mainfreight Ltd
Share Investor Interview: Mainfreight's MD Don Braid
Stock of the Week: Mainfreight Ltd
Questions to Mainfreight's MD Don Braid
I'm Buying: Mainfreight Management delivers the goods
Mainfreight Annual Report Packs a Punch
Analysis - Mainfreight Ltd: FY Profit to 31/03/09
Mainfreight VS KiwiRail: The Sequel
Long VS Short: Mainfreight Ltd
Why did you buy that stock? [Mainfreight Ltd]
Mainfreight 2008 Annual report worth reading
KiwiRail will cost Mainfreight
Mainfreight keeps on truckin
A rare breed
Share Investor's 2008 stock picks

Discuss MFT @ Share Investor Forum
Download Mainfreight Company Reports

From Fishpond.co.nz - Every Bastard Says No: The 42 Below Story

c Share Investor 2011

Share Investor

Monday, May 30, 2011

Telecom New Zealand Ltd: Chorus or Bust

Friday, May 27, 2011

Share Investor Portfolio: Value @ 27 May 2011

Share Price Alert: Fisher and Paykel Appliances Ltd

Thursday, May 26, 2011

Mainfreight Ltd: Full Year 2011 Profit Analysis

Total Pageviews

Translate

Search Share Investor

Share Investor Blog Archive

Share Investor

Share Investor Portfolio Individual Shareholder Websites

Market/Financial News

Stockmarket/Business Blogs/Share Forums

My Favourite Reading