Share Price Alert: Goodman Fielder Ltd 3

Goodman Fielder Ltd [GFF.NZX]is not one of my better investments. It has returned roughly zilch in the 5 years I have held it.

Never mind, this piece isn't about my poor investment choices but about timing your purchase at the right price.

An opportunity to buy has arisen again since a profit warning in April and a prior share price alert for this stock at $1.44. The share price has retreated since then by 18c or just below 15% to close at $1.26 yesterday. This is the 52 week low. A high of 2 bucks back in November 2010 shows how much value the company has lost in just 9 months.

The share price was last at these levels back in March 2009.

Profit has been impaired by higher commodity prices and unfavourable exchange rates - a common theme for this company for the last few years - and management have seen fit to move prices for their brands higher to recover those increased costs but too late to recover for the full year outlook.

The appointment of a new CEO on June 1 with a very generous and restrictive remuneration package and a lacklustre business history hasn't helped either.

Consumer pressure on price is going to make it hard going for the company to recover these costs as long as the current recession bites and consumers are tending to settle for non brand goods instead of buying some of the pricier brands that GFF offers.

All is not lost though, these Goodman brands are some of the best in the business, are staples on the family table and will continue to be sold and increase in sales when the economy returns to some sort of "normality".

The current share price returns a gross dividend of slightly over 11%, which is clearly a very attractive income given term investment rates of less than half this.

I am picking more softness in this share though and if you have been looking to buy this stock anyway patience is going to get it into your portfolio for less than the current share price.


Share Price Alert Series

Hallenstein Glasson Holdings Ltd
Telecom New Zealand Ltd 4
Telecom New Zealand Ltd 3
Port of Tauranga Ltd
Freightways Ltd 3
Goodman Fielder Ltd 2
Freightways Ltd 2
Telecom New Zealand Ltd 2
Ryman Healthcare Ltd
Charlies Group Ltd
Fletcher Building Ltd 2
Contact Energy Ltd
Steel & Tube Ltd
Telecom New Zealand Ltd
New Zealand Stock Exchange Ltd
Mainfreight Ltd 2
The Warehouse Group Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd 2
Fletcher Building Ltd
Restaurant Brands Ltd
Mainfreight Ltd
Tourism Holdings
Goodman Fielder Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
NZ Refining Ltd
Freightways Ltd
Xero Ltd


Goodman Fielder @ Share Investor

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Goodman Fielder hit by high commodity prices
Goodman Fielder a Hedge against an economic slump
Goodman Fielder pie gets bigger

Discuss GFF @ Share Investor Forum
Download GFF company Reports

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c Share Investor 2011

Share Investor's Total Returns: Hallenstein Glasson Holdings Ltd

I have written about returns for stocks on a general basis in the Long Term View series of posts and the Long VS Short series but in this series, Share Investor's Total Returns, I will be giving my actual returns for stocks in the Share Investor Portfolio for as long as I have held them.

The return calculation will include dividends earned along with qualifying tax credits and of course any capital increase in the share price. It will be a total return over the length of holding of the share expressed in overall dollar figures with an individual value per share of what the stock currently is held at.

The eleventh stock in this particular series is a long term star of the portfolio and one that I have held for 3 years, Hallenstein Glasson Holdings Ltd [HLG.NZX]

The current holding of 1000 was kicked off by an initial purchase in July 2008.

The stock cost a total of $2530.00. It has returned net dividends of $743.72 and total tax credits of $366.30, with $30.00 in brokerage.

I am eligible for the full tax credit so if the gross dividend (net dividend plus tax credits)is added and brokerage taken off my full return from dividends and tax credits over the total holding period of 3 years is $1080.32

The current capital value of the company in the Share Investor Portfolio as at 3 June 2011 is $3720. The capital gain therefore is $1160.00. This gives a total return on this share of $2240.32 when dividends and tax credits are included. This is a 89% return over 3 years or a 29.66% gain per annum.

I hold HLG therefore at a total cost of $289.68 or 28c per share.


Disc: I own HLG shares in the Share Investor Portfolio


Share Investor's Total Returns Series

Briscoe Group Ltd
Ryman Healthcare Ltd
Fisher & Paykel Healthcare Ltd
Auckland International Airport Ltd
Pumpkin Patch Ltd
Michael Hill International Ltd
Freightways Ltd
Mainfreight Ltd
Sky City Entertainment Group Ltd
The Warehouse Group Ltd


Hallenstein Glasson @ Share Investor

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Share Price Alert: Hallenstein Glasson Holdings Ltd 2
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Hallenstein Glassons Ltd: Should I stay or should I Go?
Mixed Retail Outlook
Long Term View: Hallenstein Glasson Holdings Ltd
The History Of: Hallenstein Glasson Holdings Ltd
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Discuss HLG @ Share Investor Forum

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c Share Investor 2011

I'm Buying: Fisher & Paykel Healthcare Ltd

This is a post made to answer a reader who phoned me the other day in relation to Fisher & Paykel Healthcare Ltd [FPH.NZX] and to explain to readers what I am looking at using the dividends provided to me from the Share Investor Portfolio over the last 3 reporting periods.

It just so happens that the readers phone call came at the same time I was considering buying FPH for the portfolio. I already have 5000 shares but would like to buy perhaps 10000 more for a long-term investment. My reader wanted to know if he should buy at its current price for a shorter term profit.

The case for buying shares in the company has been made many times by me (see links below)and perhaps the best indication of how good the company is as an investment can be found at the post Long Term View: Fisher & Paykel Healthcare which maps out what returns investors have had in the past and what they could expect in the future.

FPH is a well managed company with a good history of increasing profits and revenue based on their manufacture and sale of high end, well sought after medical products that have high margins and a reputation for cutting edge technology which more often than not beats its competition.

The only problem, if there is one, is that much of their business is done in US dollars and due to a weak US buck profits repatriated back to head office in New Zealand have been mostly static over the last 2 years.

This is where my readers request to ask if he might buy shares in the company and my perusing the company and its annual reports over the last 6 months has collided.

I have been watching the share price since I last bought shares in this company in June 2009 at $2.35 (see 3 year chart above) and have been a patient church mouse ever since for an opportunity to get back in.

The share price has taken a bit of a hit over the last 2 months (see 2 month chart below)due to the weak US dollar and over the last two weeks weakened further when their 2011 FY profit showed impacts from the dollar dragging on the bottomline.



Revenue and profits have grown over the years and their new products, especially their sleep apnea range has a good foot in the door in an ever increasing American market with overweight patients knocking on their doctors doors for help. This will clearly increase revenues in the future.

The currency affect will always be there so investors just have to deal with this. The company have forward hedging in place and next year expect a currency gain to the bottomline of NZ$14 million.

Now is a good opportunity to start looking at buying. The share is currently being buoyed by a 7c dividend which investors are eligible for until June 24, so one might be wise to wait until after that date to see what happens.

For investors like my phone caller wanting to take the dividend here and sell the stock if the share price stays level of rises just beware that because of that aforementioned currency negativity in the market this may not be wise.

For long term investors anything under 3 bucks is a good buy but I am going to keep waiting because I see an opportunity to get in at a far lower price. I will let you know what that is after I make my move.

For short term investors my advice is the same, be patient you can get this share for less.


Disc I own FPH in the Share Investor Portfolio


Fisher & Paykel Healthcare @ Share Investor

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Discuss FPH @ Share Investor Forum
Download FPH Company Reports

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c Share Investor 2011

TV3 60 Minutes Interview with Paul Henry - 5 June 2011

The TV3 60 Minutes Interview with Paul Henry & Melanie Reid - 5 June 2011

Paul Henry @ Political Animal

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c Darren Rickard 2011