Share Investor

Friday, December 30, 2011

Share Investor Portfolio: Value at 30 December 2011 & Commentary

This edition of the share Share Investor Portfolio is the last one for 2011 and I will wrap up how it has done compared to this time last year and stake a line in the sand to make for a good 2012 year end comparison.

Compared to the 27 December 2010 update, the current value of the portfolio is up 6.42% or $14,009.15. This includes net dividends.

Add around $6,000.00 in usable tax credits and the portfolio has risen approximately 7.72% .

If dividends of approx $15,974.64 are stripped out for the 2011 calendar year the portfolio has lost $1,965.49 or approx 0.6% in value in the last 12 months. This is pretty much inline with the decline in the NZX50.

The biggest gainer for the year was MFT and the biggest loser by far was PPL.

I expect 2012 to be a worse year in terms of this portfolio and I expect it to be significantly down this time next year.

Share Investor's 2012 Stock Picks reflect my negative sentiment for a large part of the portfolio for the coming year.

The total of unspent dividends and interest in the bank as at 30 Dec 2011, from the 2010 - 2011 earnings years is $32,606.57 at close of reporting season for 2010 and at the end of the 2011 2nd half reporting year. There are also approx $60,000.00 in tax credits earned from the portfolio since it began in late 2002.

The Share Investor Portfolio has increased in value by 13.36% or $35277.74 since I began tracking it for this blog on October 11 2010

Track the Share Investor Portfolio 2 .

Share Investor Portfolio as at 17:07:46, Friday 30 December, 2011 (NZDT)

Stock

Quantity

Cost price

Total cost

Market price

Market value

Change

AIA

2,000

$1.700

$3,400.00

$2.520

$5,040.00

$1,640.00

48.24%

AIA

2,000

$1.510

$3,020.00

$2.520

$5,040.00

$2,020.00

66.89%

AIA

674

$0.000

$0.00

$2.520

$1,698.48

AIA

638

$2.150

$1,371.70

$2.520

$1,607.76

$236.06

17.21%

ASBPB

3,177

$0.000

$0.00

$0.620

$1,969.74

ASBPB

6,823

$1.000

$6,823.00

$0.620

$4,230.26

$2,592.74

38.00%

BGR

725

$0.000

$0.00

$1.350

$978.75

BGR

2,275

$0.990

$2,252.25

$1.350

$3,071.25

$819.00

36.36%

FBU

303

$0.000

$0.00

$6.140

$1,860.42

FBU

811

$9.750

$7,907.25

$6.140

$4,979.54

$2,927.71

37.03%

FPH

3,000

$2.350

$7,050.00

$2.520

$7,560.00

$510.00

7.23%

FPH

707

$0.000

$0.00

$2.520

$1,781.64

FPH

1,293

$3.720

$4,809.96

$2.520

$3,258.36

$1,551.60

32.26%

FRE

6,405

$3.630

$23,250.15

$3.680

$23,570.40

$320.25

1.38%

FRE

2,226

$0.000

$0.00

$3.680

$8,191.68

GFF

607

$0.000

$0.00

$0.600

$364.20

GFF

1,393

$2.330

$3,245.69

$0.600

$835.80

$2,409.89

74.25%

HLG

366

$0.000

$0.00

$3.500

$1,281.00

HLG

634

$2.530

$1,604.02

$3.500

$2,219.00

$614.98

38.34%

KIP

740

$1.480

$1,095.20

$1.010

$747.40

$347.80

31.76%

KIP

214

$0.000

$0.00

$1.010

$216.14

MFT

1,000

$7.960

$7,960.00

$9.900

$9,900.00

$1,940.00

24.37%

MFT

1,838

$8.000

$14,704.00

$9.900

$18,196.20

$3,492.20

23.75%

MFT

929

$0.000

$0.00

$9.900

$9,197.10

MFT

1,233

$4.200

$5,178.60

$9.900

$12,206.70

$7,028.10

135.71%

MHI

1,646

$0.860

$1,415.56

$0.870

$1,432.02

$16.46

1.16%

MHI

7,000

$0.630

$4,410.00

$0.870

$6,090.00

$1,680.00

38.10%

MHI

209

$1.050

$219.45

$0.870

$181.83

$37.62

17.14%

MHI

1,145

$0.000

$0.00

$0.870

$996.15

PPG

1,004

$0.800

$803.20

$0.260

$261.04

$542.16

67.50%

PPG

1,443

$0.440

$634.92

$0.260

$375.18

$259.74

40.91%

PPG

$0.000

$0.00

$0.260

$22.88

PPL

1,000

$3.090

$3,090.00

$0.640

$640.00

$2,450.00

79.29%

PPL

1,000

$2.870

$2,870.00

$0.640

$640.00

$2,230.00

77.70%

PPL

939

$4.200

$3,943.80

$0.640

$600.96

$3,342.84

84.76%

PPL

975

$0.000

$0.00

$0.640

$624.00

PPL

1,086

$1.530

$1,661.58

$0.640

$695.04

$966.54

58.17%

RYM

653

$0.000

$0.00

$2.710

$1,769.63

RYM

4,347

$1.970

$8,563.59

$2.710

$11,780.37

$3,216.78

37.56%

SKC

5,750

$7.430

$42,722.50

$3.440

$19,780.00

$22,942.50

53.70%

SKC

2,750

$7.700

$21,175.00

$3.440

$9,460.00

$11,715.00

55.32%

SKC

1,431

$8.750

$12,521.25

$3.440

$4,922.64

$7,598.61

60.69%

SKC

781

$7.600

$5,935.60

$3.440

$2,686.64

$3,248.96

54.74%

SKC

26,203

$0.000

$0.00

$3.440

$90,138.32

STU

$0.000

$0.00

$2.110

$208.89

STU

301

$4.740

$1,426.74

$2.110

$635.11

$791.63

55.49%

WHS

6,979

$6.000

$41,874.00

$3.000

$20,937.00

50.00%

WHS

3,761

$0.000

$0.00

$3.000

$11,283.00

WHS

4,260

$3.730

$15,889.80

$3.000

$12,780.00

$3,109.80

19.57%

25.15%

	Total cost	Market value	Change
	$262,828.81	$328,942.52	$66,113.71

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 2012

Monday, December 12, 2011

Share Investor's 2012 Stock Picks

2011 has been a hard year on the stockmarket but lets forget about all the drama the PIIGs, Greek meltdowns, American deficits and massive bloated debt that threatens to strangle all before it and reinstate the stock picking monkey to pick stocks for 2012 .

It is the 5th edition this year and promises to be one of the most interesting if only for the possibility that 2012 will be a worse year for stocks than 2011.

In the face of a continued global recession, an uncertain economic future that had a big impact at the end of 2008 and continues today 2012 will be harder to pick than 2011.

Please keep in mind dear readers that the picks are my own and they reflect my investment philosophy and not necessarily anyone else's.

My picks are primarily based on a long-term view, regardless of the current short to medium term market turmoil and economic uncertainty.

NB: Since I think most of my portfolio consist of the best stocks on the New Zealand market, I found it difficult to pick stocks outside my realm of self interest.

NB 2: Stock prices quoted range from Dec 1-10.

Share Investor's 2012 Stock Picks

Picks from the NZX

Sky City Entertainment Group Ltd
[SKC.NZX]

http://chart.bigcharts.com/custom/fairfax-com-nz/summary-chart.img?symb=NZ:cen

Contact Energy has had a tough 2011 with stagnant profits and falling customer numbers but 2012 is shaping up to be a better year for the company.

Drought conditions experienced now and forecast to continue across Summer are going to benefit a generator like Contact considerably and this will go straight to the bottom-line. Customer numbers have stopped falling and have showed some small gains over the last 3 months.

The are also persistent rumours that majority owner of the company origin Energy Ltd[ORG.NZX] are still interested in taking full control at some stage.

The share price started the year at just under 6 bucks and has traded the year below that price for the majority of 2011 and even hitting the mid $4.70 mark in August and at the current price of $5.52 is still looking a buy

I bought some at $5.34 in July and I think investors have bailed too early considering things are finally starting to go their way. Look to buy before Winter 2012 because I am picking a good one for the company because of what I have outlined above.

A good defensive stock in times of economic uncertainty as 2012 will no doubt be.

Disc I own CEN shares in the Share Investor 2 Portfolio

Contact Energy @ Share Investor

Share Price Alert: Contact Energy Ltd 5
Contact Energy look set to gain customers
I'm Buying: Contact Energy Ltd
Share Investor Portfolio 2: Value @ 7 July 2011
Share Price Alert: Contact Energy Ltd 4
Share Price Alert: Contact Energy Ltd 3
Share Price Alert: Contact Energy Ltd 2
Share Price Alert: Contact Energy Ltd
Stock of the Week - Reprise 5: Contact Energy Ltd
Origin Energy asset stripping Contact Energy
Stock of the Week - Reprise 4: Contact Energy Ltd
Stock of the Week - Reprise 3: Contact Energy Ltd
Long Term View: Contact Energy Ltd
Stock of the Week: Reprise 2 - Contact Energy
Stock of the Week: Reprise - Contact Energy
Not so fast Davy Boy
Still Watching Contact Energy
Beam me up Davy
Stock of the Week: Contact Energy
MarketWatch: Contact Energy - June 2009
MarketWatch: Contact Energy - Jan 2009
Contact Energy looks bright during dark times
Share Investor's 2009 Stock Picks
Follow the Monopoly Board

Discuss this stock at Share Investor Forum - Register free
Download CEN Company Reports

TradeMe Ltd
[TME.NZX]

While only just listed at the time of writing, TradeMe could be one of those company's that continue to do well in 2012 despite global economic uncertainty. A good defensive monopoly stock in these terms as they tend to do even better during the hard times. TradeMe has a good track record and should do well in the medium term.

Plenty of demand for the IPO should see an improvement in share price.

The company is looking for a Pro-forma $65 million profit for the 12 months to June 30 2012, down from $69.8 million in 2011, so a reasonably steady bottom-line should be good for a reasonable dividend payout through 2012 and beyond.

TradeMe Ltd@ Share Investor

Trademe IPO: A Closer Look
TradeMe Prospectus

Discuss TRE @ Share Investor Forum

Sky Network Television Ltd
[SKT.NZX]

Sky Television is a company that has done well over 2011. A 2011 full year profit up by nearly 17% on revenue up just 7.4%, the company has benefited by increased customers, the switch of present customers to premium digital services and the 2011 Rugby World Cup.

2012 will see the company consolidate this growth with the continuation of the digital switch, a move towards internet TV and the 2012 Olympic Games. All good revenue earners.

Another good defensive monopoly (like all the companies listed above this stock pick), SKT is insulated somewhat from the global economic crises more than other stocks because it gets its revenue from inside New Zealand.

At its current share price of $5.35 it is close to 12 months lows of $5.25, so at this price it makes a good net return of around 6%.

Sky Network Television @ Share Investor

Sky Network Television Ltd: Time for some Stripping
Share Price Alert: Sky Network Television Ltd
Long Term View: Sky Network Television Ltd
Watching Sky Television
Market Quickie: Sky TV Worth Watching

Discuss SKT @ Share Investor Forum
Download SKT Company Reports

Trustpower Ltd
[TPW.NZX]

Trustpower had a 2012 first half year result up nearly 20% on the previous year and is a well run company with a good track record. With 220,000 customers this generator and retailer is around half the size of Contact Energy but shows a more consistently even return on investment.

The areas that it services are geographically spread but mostly in rural areas where business is still strong and servicing a large number of dairy farms that are still doing good business and are likely to need a growing energy demand as 2012 rolls on.

With a gross dividend yield of just over 7% this beats Contact's yield by around 1.5% and that figure alone is a good reason to buy this stock at or near these prices levels in these high inflationary times.

The stock is currently trading at its 12 month lows.

Trustpower @ Share Investor

Long Term View: Trustpower Ltd

Discuss TPW @ Share Investor Forum
Download TPW Company Reports

Vector Ltd
[VCT.NZX]

Vector is the last electricity company included in the 2012 picks and it has been picked principally because of its high gross return of nearly 8%, its defensive nature as an essential utility and a reasonable if unexciting long-term investment.

Vector achieved a 2011 full year profit of just over $200 million, an increase of 4% on 2010. Management expect 2012 EBITDA to be up slightly so just watch the share price which is currently tracking at $2.47 for any pull-backs as the stock is trading close to its 12 months highs of $2.65.

Vector @ Share Investor

Vector Ltd: Share Price chasing fibre network success
Long Term View: Vector Ltd
Vector sale decision hangs on political knife edge
NZX's Top 10 Dividend Returns

Discuss VCT @ Share Investor Forum
Download VCT Company Reports

Fisher & Paykel Healthcare Ltd
[FPH.NZX]

I have included Fisher & Paykel Healthcare in 2012 because I still consider will be one of the big successes of the next 5-10 years and one I included in the 2008, 2009 ,2010 and 2011 Share Investor stock picks,.

It is not only a company with good long-term prospects but a company that is another good hedge against the current global turmoil. Despite the grim economic conditions over the last few years it has managed to grow revenue well and only suffering slightly with a decreased profit because of the weak US dollar. Their products will still sell well despite a possible downturn in other business sectors.

Its share price has done nothing over the last 12 months but as I said above economic conditions have failed to dent its prospects and 2012 looks to show more of the same.

With a 2012 half year profit and revenue up strongly on 2011 2012 looks to be an even better year than 2011 in terms or business operations.

Its share price has suffered since I picked it at around $3.10 12 months ago, so this of course makes it an even better pick than 2011 when you consider at the current price of $2.40 the stock is returning a healthy 7 % plus gross dividend.

FPH shares have been at a low of $2.13 in September due to currency weakness in the US dollar (It gets the bulk of its revenues in US dollars but does have hedging) so when making your pick next year tend to make your play when the US dollar is under pressure.

Disc I own FPH shares in the Share Investor Portfolio

Fisher & Paykel Healthcare @ Share Investor

Global Market Sell-Off Stocks: Fisher & Paykel Healthcare
Resmed takes market share from Fisher & Paykel Healthcare
Resmed kicking Fisher & Paykel Heathcares butt?
Share Price Alert: Fisher & Paykel Healthcare Ltd
I'm Buying: Fisher & Paykel Healthcare Ltd
Share Investor's Total Returns: Fisher & Paykel Healthcare Ltd
Share Investor's 2011 Stock Picks
Stock of the Week: Fisher & Paykel Healthcare Ltd
Fisher & Paykel Healthcare & the US Dollar
Mondrian Investment Partners take stake in Fisher & Paykel Healthcare
Fisher & Paykel Healthcare: 2010 Full Year Profit rests on Foreign exchange movement
Long Term View: Fisher & Paykel Healthcare
Stock of the Week: Fisher & Paykel Healthcare
Analysis - Fisher & Paykel Healthcare: FY Profit to 31/03/09
Schroder Investment Management takes big Fisher & Paykel Healthcare stake
Long VS Short: Fisher & Paykel Healthcare
Big Fisher & Paykel Healthcare trades a curious taleWhy did you buy that stock? [Fisher & Paykel Healthcare]
Drinking and Trading
Share Investor's 2008 stock picks
Fisher & Paykel: A tale of two companies
FPH downgrade masks good performance

Discuss FPH @ Share Investor Forum
Download FPH Company Reports

Ebos Ltd[EBO.NZX]

Ebos Ltd is another company that should withstand the economic rigours of 2012. 2011 saw them produce a full year 2011 profit up nearly 19% on 2010 on revenue up by 200 million.

EBOS is a leading supplier and distributor of both specialty and generic medical and pharmaceutical products to the New Zealand, Australian and Pacific Islands public and private healthcare sectors and is, like Fisher & Paykel Healthcare, somewhat insulated from the macro conditions that usually influence other companies.

The company has doubled profit over the last 4 years and has a good track record historically.

The share price is off its 12 month highs of over $7.50 and at its current share price of $6.10 is paying a healthy dividend of over 7% gross. The company has a history of increasing dividend payouts.

The company is very positive for growth in 2012 and have lowered debt considerably over the last few years.

EBO @ Share Investor

Long Term View: EBOS Group Ltd

Discuss EBO @ Share Investor Forum
Download EBO Company Reports

Mainfreight Ltd
[MFT.NZ]

I am picking Mainfreight for 2012 after leaving it out for my 2011 picks because it had gained 30% in value after I picked it in 2010 and I considered it overvalued at just under 8 bucks.

At just under $10 at time of writing and after reaching an all-time high of $10.72 in July 2011, the share price now is 20% higher than what it was at the end of 2010 when I picked it, you might be wondering why I am picking MFT for 2012.

Well, you will already know why if you are a regular reader of this blog that I think Mainfreight is a company that is the best managed company and with the best prospects on the NZX.

Mainfreight is a dominant player in the logistics sector in Australasia and has businesses in North America, Asia and now Europe with the acquisition in mid 2011 of the Wim Bosman Group. It has designs on becoming a global logistics player, has surpassed 1.2 billion in revenue in 2011 and has a stated aim of doubling in size over the next 3-5 years.

Mainfreight has had a great 2011, with 2012 first half result profit significantly up and its share price has picked up as a result and long-term their lengthy track record of success looks likely to continue.

Having been glowing about its prospects long-term, 2012 could be a bad year for the company as global trade looks set for a downturn as the European debt crises bites on their economy hard and the outlook for the global economy is more than a little negative.

Logistics companies are one of the first sectors to feel the impact of economic downturns and I think this might be a good opportunity to buy on weakness in the share price in 2012.

Buy below 6 bucks with a view to hold a minimum of 5 years for superior returns.

Disc I own MFT shares in the Share Investor Portfolio

Mainfreight @ Share Investor

Share Price Alert: Mainfreight Ltd 3
Mainfreight's European Aquisition 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

Xero Ltd
[XRO.NZX]

My final main pick but certainly not the least, is Xero , the online accounting software company. Xero is a niche player in an industry dominated by global players like Quicken and MYOB and it increased its customer base significantly in 2011 and looks set to build on 2011's gains. It has however put the break-even point for the company in terms of net profit off until 2012 - that deadline was supposed to be reached late this year.

It is presently building its customer base to get "critical mass".

The buzz in the tech industry surrounding Xero is reflected in the amount of support the company has from insiders and it could be well a big player in time to come. The company has had some significant financial backers from those who know Xero well but Mums and Dads are still largely absent from the shareholder register.

XRO is a little riskier than most investments and the share price has finished the year off pretty much where it began but took a dip close to 2 bucks in July.

I include Xero this time because even though founder and CEO Rod Drury told me in 2010 that he wasn't going to sell the company and was dedicated to seeing it through to a stage where the company would be a global player, I think that he maybe tempted to take offers going at a time where the company could struggle to maintain revenue growth and therefore gain that critical mass. Xero would be valuable to a Quicken or MYOB as an add-on to their businesses.

Buy on dips below $2.50.

Xero Ltd @ Share Investor

Share Price Alert: Xero Ltd 2
Share Price Alert:Xero Ltd
Xero Ltd: 2011 HY Loss looking promising
From Xero to Hero?
Stock of the Day: Xero Ltd
Rod Drury ready for the long-haul with Xero
Share Investor Interview: Xero's Rod Drury
Xero Ltd: Download full Company Analysis
Rod Drury on Xero and Growing Business
Xero set for surprise to the Market?
Love Xero?
Share Investor's 2010 Stock Picks
Stock of the Week: Xero Ltd

Discuss Xero @ Share Investor Forum
Download Xero Company Reports

Other Notable Quotables

Auckland international Airport Ltd [AIA.NZX] A good monopoly at historically cheap prices, doing better in 2012 and set to pick up profit again in 2012.

Fisher & Paykel Appliances Ltd [FPA.NZX] has been beaten down to penny dreadful status and currently trading at 35c but still has brand recognition and could recover in late 2012 somewhat if the Christchurch earthquake rebuild kicks off. An off side chance if you want a punt.

Steel & Tube Ltd [STU.NZX] & Fletcher Building Ltd [FBU.NZX] have both been given a hammering share price wise in 2011 and both will benefit greatly from a Christchurch rebuild supposedly kicking off in late 2012. Watch for share price dips to buy when overall market sentiment is negative.

As you might also think I recommend every stock in the Share Investor Portfolio - except PPG, PPL and GFF. The last 3 are turning into stinkers.

Nasdaq

YUM! Brands Inc
[YUM.NASDAQ]

A pick from 2010 and 2011 Yum ! Brands Inc achieved a target of 10% sales growth for 2011 and with more tasty growth to come in 2012 and beyond from China & India still make this company a Finger Lickin proposition.

ASX

Coca Cola Amatil
[CCL.AX]

Coca Cola Amatil is the dominant player in the carbonated drinks market in Australasia. It sells its iconic Coca Cola brand as well as a large number of other well known brands in New Zealand, Australia, Indonesia, Fiji and a number of other markets in this part of the world. Their 2010 Annual Report shows a record profit of nearly AU$ 500 million on strong revenue growth.

A strong history of profits can be a good sign that there is more to come in the future and the fact that its customers are largely addicted to its products makes this company a great long term bet. I have always liked this company because it keeps managing to grow its business with clever marketing and product placement at sales outlets.

Buy on any weakness for superior long-term returns.

Coca Cola @ Share Investor

Coke is it!

Discuss Coca Cola @ Share Investor Forum

Conclusion & Outlook for 2012

2012 may well be a year of some severe downward corrections on global stockmarkets. As uncertainty surrounds the fragile state of many economies and the precarious state of Europe's debt yoke and more pain and drama to come in the United States as politicians argue over spending cuts to stop the country from defaulting. Gains made on stockmarkets in 2011 could materialize for some as nervousness over the aforementioned leaves them to take cash off the table. It is clear that there is much more bad news in relation to the global economy to come and the consequences of this bad news one can only guess at but it will not be pretty at all.

That aside if you can, some listed companies have done well in 2011 and will continue to do so in 2012 but others will find the going tough as cash flow dries up, debt mounts and interest rates bite.

I have concentrated largely on defensive monopoly type stocks for 2012 with the bulk or all of their revenues coming domestically and picked in 2012 will do comparatively well for that year and should do well over the next 5 years or so as we see these uncertain economic times continue.

If there is no upturn in the economy, stockmarket share price weakness will have me poised to buy further shares in some of the companies I own in the Share Investor Portfolio with surplus cash of over $32,000.00 in dividends and some with borrowed funds if there are some really good bargains to be had. I am looking at buying more Fisher and Paykel Healthcare Ltd [FPH.NZX] shares should the share price fall further with US dollar weakness.

Remember, the stocks I have picked above are based on my investment criteria and may not fit yours and of course you could have a different opinion. I would love to hear your opinion and any picks you may have.

Have a look at what I have to say, take it on board or not and then do your own research to see if you might agree with me.

Lastly, I wish you all good luck and a prosperous 2012, we are going to need it!

**Just an added footnote. Please feel free to post your own stock picks for 2012. The only requirement is that you say why and declare any financial interest. Post them below at the bottom of this piece or click here .

Disclosure : I own FPH, SKC, CEN, AIA, FBU & MFT shares in the Share Investor Portfolio.

Share Investor's Annual Stock Picks

Share Investor's 2011 Stock Picks
Share Investor's 2010 Stock Picks
Share Investor's 2009 Stock Picks
Share Investor's 2008 stock picks

Broker Picks

Brokers 2012 Stock Picks
Brokers 2011 Stock Picks

Related 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: $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 2008 - 2012

Saturday, December 10, 2011

GUEST POST: Business Leader of the Year Winner - Don Braid

Something this Mainfreight Ltd [MFT.NZ] shareholder has known for years - He is the best leader of a business in New Zealand. Well done herald for recognising this and congratulations Don.

Share Investor Interview: Mainfreight's MD Don Braid

By Christopher Adams 5:30 AM Saturday Dec 10, 2011

Dogged determination, drive and eternal optimism - they're all qualities Don Braid exudes.

Mainfreight's straight-talking group managing director has an infectious zest for business.
Even Europe's ongoing economic turmoil fails to dampen Braid's optimism, despite the Kiwi logistics operator having spent more than $200 million buying a Netherlands-based freight firm earlier this year, giving it a European footprint for the first time in its more than three-decade history.

Since the acquisition of the Wim Bosman Group the eurozone has spiralled to the brink of economic disaster, but 52-year-old Braid says doing business on the debt-ravaged continent is nothing other than an "exciting" prospect.

He points out that 172 million people live within a 350 km radius of Wim Bosman's headquarters in's-Heerenberg, on the Dutch-German border.

"You can imagine what they need to eat, drink and use," says Braid in the boardroom of Mainfreight's building in Otahuhu. "That gives us an enormous amount of opportunity."

And he should know, having spent his entire working life in the freight industry.

After leaving Timaru Boys' High School Braid joined the New Zealand Shipping Corporation as a clerk in 1976. His father was a truck driver, but he says that didn't influence his career decisions.

"I probably wasn't qualified enough to go to university," Braid says. "I think I've always enjoyed business, from an early age, so to be involved like I am today has been great. I'm pleased I didn't do anything else."

Mainfreight shareholders would be similarly pleased.

In the decade Braid has spent at its helm, the company has become a global logistics player with operations on every populated continent apart from Africa.

In the 12 months to March 31, Mainfreight - which has been one of the top performing stocks on the NZX this year - posted record sales of $1.34 billion. The company is on track to go close to the $2 billion mark in its current financial year, Braid says, having already posted an almost $900 million revenue for the six months to September.

Bruce Plested, the firm's executive chairman who founded the company in 1978 with $7200 and a 1969 Bedford truck, recalls the day in 1994 when Braid - then a Freightways Group employee - had the job of pitching its Daily Freightways business to Mainfreight, which it acquired that year.
"Don gave this glowing account of [Daily Freightways] and I kept looking at him and thinking 'what a lot of bullshit'," Plested says.

"But I was fascinated that he could present this picture of a skeleton of a company ... and present it so brightly."

Braid, who joined Mainfreight through its purchase of Daily Freightways, says the company hasn't let the last few years of economic upheaval dull its ambitions.

"You need some energy and you need to be on the front foot," he says. "If you allow the recession to roll over the top of you there's a great chance it will."

While many of its NZX-50 peers have entered a period of stagnation, Mainfreight - it seems - thrives on hard times.

It has largely grown earnings and revenue since 2008 and tripled its share price between early 2009 and today.

"I think we're a better business because of adverse economic conditions, there's no doubt about that," he says.

Braid has been a beneficiary of the meteoric rise in Mainfreight's share price. He owns a 3 per cent stake in the firm, worth about $29 million.

The firm has earned a reputation within the market for being slickly-run.

New Zealand Shareholders' Association corporate liaison Des Hunt says Braid is one of the most effective listed company bosses in this country.

"He never talks about himself and always talks about long-term goals," Hunt says. "He never moans about the currency and is always positive."

Plested says that within a few months of the firm's acquisition of Daily Freightways, which became Daily Freight under Mainfreight ownership, he came to recognise Braid's strengths.

"He's sporting and tough and makes decisions quite fast," Plested says. "He implements things very well and you don't have to remind him about anything you're trying to achieve. He's got plenty of charm if he wants to have it ... and his leadership skills just stand out - people want to stand next to him."

Braid goes to great lengths to stress that the company's success is the result of the efforts of its entire, 5167-member "team" around the world.

"It's not about what I've done - it's about what we've done and what the business has done," he says.
Use of the word "staff" is banned within the company - one of a range of idiosyncrasies particular to the logistics firm.

Braid recalls with horror the memory of listening to a chief executive refer to her workers as "FTEs" - full-time equivalents - during a radio interview.

"I just think that's disgusting," he says.

Private parking spaces are also banned at Mainfreight - the group managing director has to find himself a spot in the carpark each morning after he drives through the front gate.

Offices are outlawed, even for Braid, whose desk is situated in the corner of a large, open-plan room occupied by the company's national team.

And analysts have been warned that they "won't get a second interview" if they make that mistake of calling Mainfreight a "trucking company".

Kiwis know the firm largely through its blue trucks that ply our highways, but the company also utilises sea, train and air freight to transport goods around the world.

"It's just a little rule that we've had because if they [analysts] keep calling us a trucking company they clearly haven't done their research."

Weekly operational reports are posted on the wall of the company cafeteria in Otahuhu, where all team members, including Braid, eat at a single, long table.

"There's no bureaucracy or hierarchy or superiority in the business. We're trying to break all that down."

Braid says the company strives to be de-centralised through giving responsibility to all individuals in the business and letting them make decisions.

Mainfreight people, he says, don't "live in question marks".

Like most Kiwi business leaders, Braid is self-effacing and doesn't fancy talking to journalists about his life outside the company.

"I don't think any of those things are really of interest to this," he says. "We need to try and paint the picture around Mainfreight here and what Mainfreight is, that to me is of more interest than whether I like rugby or cricket.

Why we chose Don Braid for top honour

Mainfreight's Don Braid rose above a solid field of finalists to be named New Zealand Herald Business Leader of Year.

His company has been a shining example of success amid tough global economic conditions.
Braid has earned a reputation within the market as a straight talker and one of the most effective NZX-50 bosses.

While many companies have been battening down the hatches this year, Mainfreight has been on the acquisition trail - purchasing a Netherlands-based freight business which operates in Belgium, France, Romania and Poland and Russia.

The company posted record earnings and revenue for its last full year and has continued to break records this financial year.

Braid said Mainfreight was on track to push close to the $2 billion sales mark by March next year.
The firm's shares have been one of the best performing stocks on the NZX, returning more than 20 per cent in the year to date.

Forsyth Barr analyst Rob Mercer said the market had confidence in Mainfreight after it managed to grow revenue and market share and outperform its peers during the global financial crisis.

Other finalists were: Briscoe Group managing director Rod Duke, NZX chief executive Mark Weldon, ex-Fonterra chief executive Andrew Ferrier, Xero founder Rod Drury, LanzaTech chief executive Jennifer Holmgren, Ngai Tahu Holdings Corp chief executive Greg Campbell, TZ1 founding chief executive and former Microsoft New Zealand chief executive Helen Robinson, Farmers/Whitcoulls owners David and Anne Norman and Ryman Healthcare chief executive Simon Challies.

Disc I own MFT shares in the Share Investor Portfolio

Mainfreight @ Share Investor

Share Price Alert: Mainfreight Ltd 3
Mainfreight's European Aquisition 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

Related 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: $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

c Share Investor 2011

Share Investor

Friday, December 30, 2011

Share Investor Portfolio: Value at 30 December 2011 & Commentary

Monday, December 12, 2011

Share Investor's 2012 Stock Picks

Saturday, December 10, 2011

GUEST POST: Business Leader of the Year Winner - Don Braid

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