Share Investor Portfolio 2: Value @ 22 July 2011

The Share Investor 2 Portfolio is a separate portfolio apart from the original Share Investor Portfolio and contains just one share, Contact Energy Ltd [CEN.NZX]. It will only have this one share in it and has a far shorter time frame than the original long-term portfolio that I started 8 years ago.

The portfolio was started July 7 with 9000 shares purchased at $5.34 at a total cost of $48,060.00 and $144.18 in brokerage.

After the 14th day of trading the portfolio was down by $360.00 or 0.75% on the July 15 update to be worth a total of $48,510.00.

The portfolio is up 0.19% or $90.00 since tracking began on July 7 2011.

Share Investor Portfolio 2 as at 17:30:00, Friday 22 July, 2011 (NZT)

Stock	Quantity	Cost price	Total cost	Market price	Market value	Change	%
CEN	9,000	$5.340	$48,060.00	$5.350	$48,150.00	$90.00	0.19%

0.19%

	Total cost	Market value	Change
	$48,060.00	$48,150.00	$90.00

Share Investor Portfolio 2

Share Investor Portfolio 2: Value @ 15 July 2011
Share Investor Portfolio 2: Value @ 14 July 2011
Share Investor Portfolio 2: Value @ 13 July 2011
Share Investor Portfolio 2: Value @ 12 July 2011
Share Investor Portfolio 2: Value @ 11 July 2011
Share Investor Portfolio 2: Value @ 8 July 2011
Share Investor Portfolio 2: Value @ 7 July 2011

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c Share Investor 2011

Charlies Group Ltd: Grant Samuels recommend Asahi Group offer

Offer documents and all associated paperwork in relation to the takeover of Charlies Group Ltd [CHA.NZX] by Asahi Group Ltd [2502:JP] are available here to download.

The independent adviser’s report prepared by Grant Samuel & Associates Limited recommends the takeover for the following reasons:

A value range of $121.3 million to $133.3 million has been attributed to Charlie’s Group’s business operations. This valuation range is an overall judgement having regard to:

*the earnings multiples implied by the prices paid for comparable businesses and the share prices of comparable listed companies;

*the attributes and earnings outlook for Charlie’s Group; and

*the consolidation of the non-alcoholic beverage sector in Australasia.

The valuation represents the estimated full underlying value of Charlie’s Group assuming 100% of the company was available to be acquired and includes a premium for control. The value exceeds the price at which, based on current market conditions, Grant Samuel would expect Charlie’s Group shares to trade on the NZSX in the absence of a takeover offer or proposal similar in nature to the Asahi Offer. The valuation reflects the strengths and weaknesses of Charlie’s Group and takes into account the following factors:

*the strong cash flows and high gross margins across the portfolio;

*the strong portfolio of brands;

*the rapidly growing presence in the grocery segment in Australia;

*the Group’s domination of the organic sector in New Zealand;

*the innovative and creative management;

*the potential for growth beyond Australia; and

*a good pipeline of new products.

It looks like a good offer by Asahi, based on the future trading of Charlies and its good growth prospects and multiples paid for several beverage companies in this part of the world over the last few years; the Kirin Holdings Ltd [2503:JP] buyout of Lion Nathan and Coca Cola Amatil Ltd [CCA.ASX] purchase of Fosters Group Ltd [FGL.ASX] assets just two examples.

CHA investors would be advised to take the offer given the absence of any competing offer for the company.

Charlies was a pick at 17.5c in Share Investors 2011 Stock Picks.

Takeover Documents

Charlies Group @ Share Investor

Charlies Group Ltd: Asahi make takeover offer
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Discuss CHA @ Share Investor Forum
Download CHA Company Reports

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c Share Investor 2011

Resmed kicking Fisher & Paykel Heathcares butt?

An interesting take on Fisher & Paykel Healthcare's [FPH.NZX] flagging share price of late from the Melbourne Age' "Insider".

Ian McIlwraith has heard "whispers" that Australian company Resmed Inc [RMD.ASX] may have taken market share in the sleep apnea sector that FPH excels in and is the technological leader:

"A little like a Tour de France rider who falls off the back of the pack, though, the shares are showing little sign of being able to bridge the gap in the near term without a significant shift in fortunes.

They have jagged their way down to yesterday, threatening to break under the $NZ2.50 level, and there is a whisper around that one reason for the decline is that Resmed, which competes in a similar space on sleep relief products, has been nicking market share from FPH.

Certainly Resmed's stock has risen from about $2.85 to just short of $3.10 a share in recent weeks - although that raises a ''chicken and egg'' question. Is the rise in Resmed because it is beating FPH in a commercial sense, or because investors are switching from one to the other?

Resmed is due to report its results on August 5, which might clarify the situation". Melbourne Age , July 21 2011

I have not heard these "whispers" and as McIlwraith pointed out himself FPH's May profit announcement that ends the FY period to March 31 2011 was ahead of expectations and the company was very positive about the coming 12 months in terms of sales increases.

Resmed would have had to have taken market share off FPH since the end of balance date for full year 2011 for the "whisper' to have any validity and I am still inclined to think that the flagging share price can be put solely down to the low US dollar that the bulk of company revenue is denominated in and the relatively higher kiwi dollar against other currencies rather than a hit from their main competitor.

I am looking to buy this stock at around current prices and did the last time this stock was around these levels 3 years ago.

The reason why I am a little skeptical about the claim this author makes is that FPH stock was trading below current levels 3 years ago in a market pre the 2008 market crash with the currency at similar high levels - close to 80c from memory - and no question of poor sales or impacts from Resmed or any other competitor.

As the author has indicated though, prospective investors in FPH might want to wait until Resmed's profit result early out early August and even then there will only be a 3 month indication of any impact by them on FPH sales so if there have been any sales taken from FPH one quarter isn't a concrete result for Resmed or a material impact for Fisher and Paykel Healthcare.

Disc I own FPH in the Share Investor Portfolio


Fisher & Paykel Healthcare @ Share Investor

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Discuss FPH @ Share Investor Forum



c Share Investor 2011

Share Price Alert: Ecoya Ltd

When we last visited fragrance/candle maker and marketer Ecoya Ltd [ECO.NZX] back in November 2010 its shares were trading at 75c each and the company had yet to make a profit.

Nothing much has changed since then in regards to making a profit but the company is now trading at 95c after reaching an all-time low of 65c back in early 2011.

This is almost completely related to the inclusion of Trademe founder Sam Morgan appearing as a substantial investor with a 2.45% stake on the Ecoya share register.

Now I have been wrong twice in terms of growth companies like this that don't make money panning out for investors, beverage maker and marketer Charlies Group Ltd [CHA.NZX] and the former listed baby of Geoff Ross, the vodka maker 42 Below, so what do I know.

42 Below had never made money at time of its sale to Barcardi and Charlies had made a small return since it was sold last month.

Investors would have to question whether this company is or will be in the league of the two examples above but Sam Morgan knows more about business and investing than me so you might want to follow the money rather than my fat mouth.

Having said that I cant see how the inclusion of Mr Morgan on the ECO register justifies the 27% increase in share price in 8 months, especially considering the lack of black ink on the books or the prospect of black ink any time soon.

If you are interested in investing in Ecoya, you might want to wait for a pull-back in share price rather than buying at the current premium, especially given the dire economic macro situation and the associated poor retail environment - it has got to be impacting on sales growth for the company.

Be patient and don't let the candle burn you at both ends.

Share Price Alert Series

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Ecoya Ltd @ Share Investor

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Ecoya Prospectus Requires free registration
Ecoya.co.nz

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c Share Investor 2011