Long Term View: Freightways Ltd

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.

Freightways Ltd [FRE.NZ] has been very good to its shareholders in terms of returns since its forerunners establishment in 1964 - we will only be looking at the last 6 years of available data since FRE was listed in September 2003 at $NZ1.60 . With $NZ 1.17 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 190% return (see chart below for the share price percentage gain against the average of all NZX indexes) over the 6 year available data gives an approximate annual net return of just over 31%.

This is approximately double the return compared to the average of all NZX indexes.




Disclosure I own FRE shares in the Share Investor Portfolio

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
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd


Freightways @ Share Investor

Freightways Ltd: 2009 Full Year profit commentary
Freightway's Capital Raising more of the same crap for small shareholders
Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result

Discuss FRE @ Share Investor Forum

Download FRE company Reports


Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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c Share Investor 2010

Kathmandu 2010 Profit lacks good comparison

I am not a big fan of Kathmandu Ltd [KMD.NZ] I will admit that. A prospectus as bent as Elton John on speed and growth largely centered on debt driven store expansion.

Their 2010 half year profit out yesterday that blew the market out of the stratosphere, share price wise, hasn't changed my view.

The trouble with this particular profit release is that it suffers from lack of a good and accurate comparison from last year.

Shareholders are therefore still unable to assess the state of the company yet with any form of credibility.

In one example they are comparing pro-forma net profit after tax (NPAT), pointed out in the prospectus, with an "adjusted" figure for the "actual" 2010 HY NPAT - what does that really mean? I don't know.

All important same store sales look impressive at first glance but have they also been "adjusted" as well to show the company in a better light? Once again I don't know.

One glaring example of poor management were the IPO costs, $21.3 million compared to the prospectus estimate of $15 million - 40% higher.

IPO costs relating to advisory fees were substantially higher, due to the scope of work eventually required to meet the requirements of dual listing on both the NZX and ASX. Additional costs were also incurred as a result of the change in banking arrangements.

If management cant get that right then you have to wonder about management of the company in the future.

The stockmarket needed a reason to get this company back up above its IPO price (see 4 month chart above) and insiders sent the price up sharply from mid February and mums and dads got back in over the last few days and pushed the share price up by more than 10% to NZ $ 2.46

Kathmandu @ Share Investor

Kathmandu IPO: Shares set for discount
Kathmandu IPO: Prospectus Analysis
Kathmandu IPO: Jan Cameron lands a blow to IPO
Kathmandu IPO: What is it worth?
Kathmandu IPO: Retail Interest High
Kathmandu IPO: A tough mountain to climb
Kathmandu No.1 but IPO should get the Bullet
Download the detailed Kathmandu Value Cruncher Report - Requires free registration at Share Investor Forum to download
Download Kathmandu IPO Prospectus

Discuss Kathmandu at Share Investor Forum

Related Amazon Reading


Initial Public Offerings by Richard F. Kleeburg
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c Share Investor 2010