Share Price Alert: Xero Ltd

If, like me, you were away from your computer and the markets over the last month (see 12 month chart above) or so you might have come back and noticed this little anomaly with the Xero Ltd [XRO.NZX] stock price.

Since the beginning of December when the stock was trading at around 2 bucks the stock has piled on around a dollar to close trading yesterday at $2.91.

A whopping rise of more than 40%!

This is on slightly higher than normal trading volume.

The stock was trading at around $1.50 in late October just before a large investor took a big stake in the company so the significance of the holiday rise is compounded. When looking back just two months the stock has risen by almost 100%.

Little material has changed since a more promising result in November excepting a directorship being taken up by former KiwiBank head CEO, Sam Knowles announced on December 2010.

The rise in share price was questioned by the NZX on December 31 but apparently nothing untoward was disclosed or found.

It is my view though that the share price has overtaken the medium term prospects for the company and a rise of 40% over a few weeks doesn't justify what may be seen by some as overwhelming positive news.

Look for a pullback in share price should the hype not match concrete company results.

Proceed with caution if you are considering buying now.


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NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill



c Share Investor 2011

New Zealand: Land of Promise

I shut this blog down for a year until August last year because the strong opinions written within would have risked having our newborn child taken away from us by New Zealand Authorities who were doing their level best anyway to remove her from us and destroy our family over the best part of 2009 and 2010. This ended in a family court case in August 2010, on her first birthday no less.

I had intended to write a long winded account of our saga that hasn't been finished but it really doesn't do justice to the story and is far too painful to recount so I have abandoned it to write this.

I agonised over what to write on a political themed blog like mine on this blogs return because the experience I skirted around above has profoundly changed me.

I can no longer write about politics with the same passion and conviction I once did because when you deal directly with politicians from all political hues and beurocrats in the way that I did for over a year your views are bound to change.

Politicians are just like you and me but the thing that has changed about them is that every action they take, without exception, is motivated by political face saving. I of course knew some of this before our saga started but what I didn't realise was that these people don't do anything without thinking of the political ramifications first.

The words, practical, helpful, truthful, sensible, moral and doing what is right first simply do not enter the equation.

That has been our experience and I am sure it has been with some of my readers.

With this in mind I am going to change the tack of this political blog and focus on the really important parts of politics. What policies are being put forward that will impact on our lives.

I am sick of talking about who spent this, who slept with who and who is rorting what. It really doesn't matter because all of them do it. Some more than others.

We deserve better from our politicians no matter what form of politics one follows and we must focus on their policies, what they have to say and more importantly the inspiration they give to us as a people as we head towards an election at the end of the year.

Our country should be a great one, it isn't and we need a leader that has got the balls to forgo politics and just do the right thing when it is needed. We are in the midst of a lethal recession and a leadership with guts is needed not a fence sitting crowd pleaser to all.

I thought John Key was that man for this job. He held so much promise and has the best pedigree of any politician in our history but his lack of practical will over political expediency has us mired in shades of grey instead of the Kodachrome colours I was hoping for.

God I am ever so hopeful for our future.

NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill

c Darren Rickard 2011

Has the Warehouse lost its Mojo?

Once upon a time, not so long ago, the Warehouse Group Ltd [WHS.NZX] was a "category killer" that managed to pounce on all of its competition in terms of its offerings and what price it put on those goods. It was usually the cheapest place in town and was the first and only destination for many a kiwi family who had some discretionary dollars to spend.

For investors and shoppers alike this is now clearly not the case.

The latest dip in sales for the group over the Christmas trading period was a mammoth 3.8% drop in same store sales across the Red Sheds and a flat result for their Stationery business.

This comes on top of flat sales for the Full Year 2010 Result & 2009 Full Year so the medium term pattern looks alarming to say the least.

What isn't at first clear is just why their sales figures are heading south. To be fair, competition like Briscoes Homeware, part of Briscoe Group Ltd [BGR.NZX] and Kmart are kicking their backside and they never used to. Offerings from The Warehouse' competitors are better and sometimes cheaper, indicating buyers for those competitors are doing a much better job at picking what consumers want.

Ian Morrice, Warehouse CEO has indicated that sales were down because of weak "consumer electronics, gaming, CDs and DVD" sales but this sort of excuse has been used by Mr Morrice before for sales dips and even in the centre of one of our worst ever economic periods the sheer size of the company should mean that its buying power trumps that of its smaller competition.

What I think might be happening though is that former Warehouse shoppers no longer know what the company stands for as it has transitioned over the last few years from a company with a focus of the cheapest possible prices for unbranded goods to a company that is now selling increased offerings of branded goods for close to what its competitors are.

Increasingly though, as traditional Warehouse shoppers get older and have less disposable income, the younger consumer is finding that there are hipper, cheaper places to go like specialty retailers like JB Hifi for electronics, DVDs and CDs and fashionable mall stores for lingerie and women's clothes. They simply wouldn't be seen dead at a a Warehouse store and that is clearly a problem for the company and its shareholders.

To be fair to the company other retailers are finding the going even tougher, with some vanishing over 2010 and more set to do so over 2011 as discounts get bigger just to keep market share. Some of its competitors are losing big money and will not be able to outlast the red sheds.

Having said that, The Warehouse have to decide whether they are going to offer more choice and brands at the best prices or languish like the competition they helped kill in the 1990s least they end up in the same boat themselves in years to come.


Disclosure: I own WHS shares in the Share Investor Portfolio

The Warehouse Group @ Share Investor

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NEW - From Fishpond.co.nz | Think Bigger, By Michael Hill

c Share Investor 2011

Share Investor Portfolio: Value @ 10 January 2011

A good start to the year for the Share Investor Portfolio. Up 1.06% or $2933.73 on the end of the 2010 update for the first week of 2011. This was due primarily due to a 10c rise in SKC and small rises in the majority of other shares with the notable exception of a 11c drop in WHS shares due to bad Christmas period sales. This drop had a significant impact of around 0.5% on the portfolio.

The total of unspent dividends in the bank from the 2010 earnings year is $16631.93 at close of reporting season for 2010. There are also approx $50000.00 in tax credits earned from the portfolio since it began in late 2002.

Share Investor Portfolio as at 17:30:00, Friday 07 January, 2011 (NZDT)

Stock	Quantity	Cost price	Total cost	Market price	Market value	Change	%
AIA	2,000	$1.700	$3,400.00	$2.240	$4,480.00	$1,080.00	31.76%
AIA	2,000	$1.510	$3,020.00	$2.240	$4,480.00	$1,460.00	48.34%
AIA	803	$2.150	$1,726.45	$2.240	$1,798.72	$72.27	4.19%
AIA	445	$0.000	$0.00	$2.240	$996.80	$996.80
AIA	64	$1.650	$105.60	$2.240	$143.36	$37.76	35.76%
ASBPB	2,946	$0.000	$0.00	$0.740	$2,180.04	$2,180.04
ASBPB	7,054	$1.000	$7,054.00	$0.740	$5,219.96	$1,834.04	26.00%
BGR	438	$0.000	$0.00	$1.350	$591.30	$591.30
BGR	2,562	$0.990	$2,536.38	$1.350	$3,458.70	$922.32	36.36%
FBU	266	$0.000	$0.00	$7.780	$2,069.48	$2,069.48
FBU	848	$9.750	$8,268.00	$7.780	$6,597.44	$1,670.56	20.21%
FPH	3,000	$2.350	$7,050.00	$3.100	$9,300.00	$2,250.00	31.91%
FPH	541	$0.000	$0.00	$3.100	$1,677.10	$1,677.10
FPH	1,459	$3.720	$5,427.48	$3.100	$4,522.90	$904.58	16.67%
FRE	1,882	$0.000	$0.00	$3.100	$5,834.20	$5,834.20
FRE	6,749	$3.630	$24,498.87	$3.100	$20,921.90	$3,576.97	14.60%
GFF	541	$0.000	$0.00	$1.750	$946.75	$946.75
GFF	1,459	$2.330	$3,399.47	$1.750	$2,553.25	$846.22	24.89%
HLG	244	$0.000	$0.00	$4.170	$1,017.48	$1,017.48
HLG	756	$2.530	$1,912.68	$4.170	$3,152.52	$1,239.84	64.82%
KIP	190	$0.000	$0.00	$0.990	$188.10	$188.10
KIP	810	$1.480	$1,198.80	$0.990	$801.90	$396.90	33.11%
MFT	1,000	$7.960	$7,960.00	$7.950	$7,950.00	$10.00	0.13%
MFT	1,838	$8.000	$14,704.00	$7.950	$14,612.10	$91.90	0.63%
MFT	657	$0.000	$0.00	$7.950	$5,223.15	$5,223.15
MFT	1,505	$4.200	$6,321.00	$7.950	$11,964.75	$5,643.75	89.29%
MHI	1,646	$0.860	$1,415.56	$0.880	$1,448.48	$32.92	2.33%
MHI	7,000	$0.630	$4,410.00	$0.880	$6,160.00	$1,750.00	39.68%
MHI	718	$0.000	$0.00	$0.880	$631.84	$631.84
MHI	636	$1.050	$667.80	$0.880	$559.68	$108.12	16.19%
PPG	31	$0.000	$0.00	$0.290	$8.99	$8.99
PPG	1,500	$0.440	$660.00	$0.290	$435.00	$225.00	34.09%
PPG	1,004	$0.800	$803.20	$0.290	$291.16	$512.04	63.75%
PPL	1,000	$3.090	$3,090.00	$1.720	$1,720.00	$1,370.00	44.34%
PPL	1,000	$2.870	$2,870.00	$1.720	$1,720.00	$1,150.00	40.07%
PPL	939	$4.200	$3,943.80	$1.720	$1,615.08	$2,328.72	59.05%
PPL	877	$0.000	$0.00	$1.720	$1,508.44	$1,508.44
PPL	1,184	$1.530	$1,811.52	$1.720	$2,036.48	$224.96	12.42%
RYM	459	$0.000	$0.00	$2.270	$1,041.93	$1,041.93
RYM	4,586	$1.970	$9,034.42	$2.270	$10,410.22	$1,375.80	15.23%
SKC	5,750	$7.430	$42,722.50	$3.340	$19,205.00	$23,517.50	55.05%
SKC	1,000	$7.600	$7,600.00	$3.340	$3,340.00	$4,260.00	56.05%
SKC	2,750	$7.700	$21,175.00	$3.340	$9,185.00	$11,990.00	56.62%
SKC	1,431	$8.750	$12,521.25	$3.340	$4,779.54	$7,741.71	61.83%
SKC	25,085	$0.000	$0.00	$3.340	$83,783.90	$83,783.90
SKC	899	$4.720	$4,243.28	$3.340	$3,002.66	$1,240.62	29.24%
STU	78	$0.000	$0.00	$2.170	$169.26	$169.26
STU	322	$4.740	$1,526.28	$2.170	$698.74	$827.54	54.22%
WHS	4,500	$3.730	$16,785.00	$3.390	$15,255.00	$1,530.00	9.12%
WHS	6,979	$6.000	$41,874.00	$3.390	$23,658.81	$18,215.19	43.50%
WHS	2,880	$0.000	$0.00	$3.390	$9,763.20	$9,763.20
WHS	641	$3.710	$2,378.11	$3.390	$2,172.99	$205.12	8.63%
17.68% Total cost Market value Change $278,114.45 $327,283.30 $49,168.85

Share Investor Portfolio @ Share Investor

Share Investor Portfolio: Value @ 3 January 2011
Share Investor Portfolio: Value @ 27 December 2010
Share Investor Portfolio: Value @ 20 December 2010
Share Investor Portfolio: Value @ 13 December 2010
Share Investor Portfolio: Value @ 6 December 2010
Share Investor Portfolio: Value @ 29 November 2010
Share Investor Portfolio: Value @ 22 November 2010
Share Investor Portfolio: Value @ 15 November 2010
Share Investor Portfolio: Value @ 8 November 2010
Share Investor Portfolio: Value @ 1 November 2010
Share Investor Portfolio: Value @ 25 October 2010
Share Investor Portfolio: Value @ 18 October 2010
Share Investor Portfolio: Value @ 11 October 2010
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Related 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 2011