Long Term View: Turners Auctions 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.

Turners Auctions Ltd [TUA.NZ] has been on a roller-coaster in terms of stock prices and results since its October 2002 listing at $1.50. (see TUA prospectus for details) With $1.04c in net dividends and 30% more in tax credits (see chart above)gives TUA a 75% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 8 year listing of TUA an annual net return of 9.37 %.

This is approximately a 2% better return when compared to the average of all NZX indexes.





Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
Methven Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
PGG Wrightson Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
The Warehouse Group Ltd


Discuss TUA @ Share Investor Forum
Download TUA Company Reports


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c Share Investor 2010

Queenstown Airport: Air New Zealand's Crocodile Tears

The outburst of hot air from Air New Zealand Ltd [AIR.NZ] domestic airline general manager Bruce Parton over the weekend about the deal Auckland International Airport Ltd [AIA.NZ] stitched up over buying a piece of Queenstown Airport seems to be nothing more than sour grapes from a company that practices the same sort of monopolistic, anti-competitive business that the airline is accusing the airport of practicing - one of the reasons I bought AIA shares by the way.

"AIAL has displayed significant greed over several years and is adept at fleecing travellers. It would be naive to think it's not aiming to increase airline and airport charges, which will ultimately increase the cost of travel into and out of Queenstown," NZ Herald, 24 July 2010

Mr Parton's part of the airline has had a decades long history of over-charging on most of the domestic routes that it operates on and still does when not faced with competition in small towns - Napier is still a route that you have to take a mortgage out just to fly there and I am sure you have your own story to tell about your own local Air New Zealand rort.

Lets forget about that though. This is simply part of business. When you don't have a competitor to keep you honest there is always the temptation to charge more. In Auckland Airport's case they are able to charge more because of their size and dominance in this part of the world and that is unlikely to be challenged anytime soon simply because they are the biggest and will probably remain the biggest for many more years to come.

Mr Parton's suggestion that the deal between AIA and Queenstown Airport needs to be looked at by the Commerce Commission is a retrograde move by a manager without the foresight to make the move on Queenstown before AIA did. Is it really going to be a fair playing field if one or more of the airlines flying to Queenstown own the means to fly there and the Airport as well? I dont think so.

Whatever you think of Auckland Airport's business practices and charges - and some of them have been and still are highly suspect and overpriced - Air New Zealand operates in a similar manner and will continue to do so given the opportunity to own part of Queenstown Airport.

Better that a company with experience at running an airport, rather than a state run bureaucracy like Air New Zealand have a chance to fleece us all over again.

Mr Parton's cries are those of a hungry, anti-competive, monopolistic crocodile.


Disc I own AIA shares in the Share Investor Portfolio



Auckland International Airport @ Share Investor

Queenstown Airport: AIA purchase good Long-Term but will cost shareholders Short-Term
Long Term View: Auckland International Airport
VIDEO - Simon Moutter on Australian Airport Purchase
Auckland Airport Capital Raising a fair call
Auckland International Airport lands Australian Ports
What Infratil sale of Auckland Airport stake means...
Is another Auckland Airport bid likely under a business friendly Government?
Latest Airport coverage
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Discuss this Stock @ Share Investor Forum - Register free
Download AIA Company Reports
Download Queenstown Airport Company Reports


AIR @ Share Investor

Long Term View: Air New Zealand Ltd
John Palmer Tipples on the Shareholder
Mike Pero and Air New Zealand: Capitalism vs Socialism
Rob Fyfe's "Environmental Extremism"
Reality Needs to Bite
Air New Zealand wants another taxpayer bailout

Discuss this stock at Share Investor Forum - Register free
Download AIR Company Report





c Share Investor 2010

DNZ Property IPO: It stinks

In an ideal world Initial Public Offerings (IPO) are a means of raising capital from the public to enable the company getting the proceeds of such an IPO to use it to grow and prosper into the future. The DNZ Property Ltd [DNZ.NZX] IPO (see DNZ Prospectus)that kicked off earlier this week is certainly one for either the blind, stupid or both or a broker if you haven't sold your allocation to the aforementioned and is far from ideal, in fact it has the rear-end smell of failure written all over it and you dont even have to glance at the glossy, expensive prospectus to get the full stench.

It wouldn't be so bad if the funds raised in the IPO were going back into the business but the big bad, bogeyman up front is that the $35-40 million raised will be going to two overstuffed suits to buy out their management contact.

As the basis for an IPO this has got to be one of the worst reasons to raise cash.

Even if the underlying company was worth you investing your hard earned, can you really trust management of a company and its directors that would allow two individuals to walk away with this much money without doing anything for it?

What kind of agreement was drawn up that this kind of money would be needed to buy out a contract like this of such a small business!!

With these kind of backroom deals going on you know you cant trust management at DNZ Property, now, or in the future - the business is very badly managed.

The big winner will be the brokers, they always are with these kind of turkey IPOs, but I suspect that the small investor like me will be avoiding this stinker like the plague. It will be pushed by your broker because they will get a commission to sell it to you but all you have to say is no I would rather set my money on fire than hand it over to DNZ.

It is sad that this, the highly risky Ecoya Ltd [ECO.NZ] and the heavily debt laden Kathmandu Holdings Ltd [KMD.NZ] IPOs have been the only three calls to the market for capital over the last year or so. The DNZ IPO just took IPOs in NZ to a new low.

Ecoya is at least well managed, Kathmandu has at least a good brand but DNZ is simply a shitty, cynical, little attempt to feather-bed two individuals pockets for doing sweet fanny adams.

No wonder the NZX is performing badly and small investors continue to buy houses instead of shares.

In case you are wondering where I stand, I am of the opinion that the DNZ Property IPO is excrement in the true sense of the word.

STAY AWAY.

Related

DNZ Prospectus
About DNZ

Discuss DNZ @ Share Investor Forum


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c Share Investor 2010