Share Investor: February 2011

Monday, February 28, 2011

Share Price Alert: Fletcher Building Ltd

Give to those affected by the Christchurch Quake here

Fletcher Building Ltd [FBU.NZX] is but one stock listed on the NZX that has benefited from speculation based on probable contracts to reconstruct Christchurch after the massive earthquake there last week that destroyed a great deal of the city and its infrastructure.

Clearly FBU do set to gain from this tragedy and the share price has gained rapidly over the last week since the Tuesday 22 event. The share price pre-quake was $8.28 and at close of trading last Friday finished at $8.63, a gain of around 4% in a market that is otherwise heading south.

The stock has risen by around 13% since the beginning of 2011 on news of a good 2011 full year result.

The only question for investors is that just when the re-construction of Christchurch can begin and of course just when the income for that re-construction appears on company books.

While the current share price is breaking 6 month highs it appears that the market now sees this stock as a relative bargain if the Christchurch factor is entered into the equation.

Proceed with caution if you are interested in this company as initial share price movements could be the market overreacting to the Christchurch quake and subsequent trading could see some selling.

Disc I own FBU shares in the Share Investor Portfolio

Share Price Alert

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c Share Investor 2011

Share Investor Portfolio: Value at 28 February 2011

The Share Investor Portfolio fell in the last week of February. The portfolio was down 1.78% or $4937.71 on the Feb 21 update . For the first 8 weeks of 2011 the portfolio has increased by 2.37% or $5753.93. This weeks fall was due, primarily, to small falls in most stocks due to the possible negative economic fallout from the Christchurch Earthquake

There has also been a profit result that has added cash dividends to the portfolio. AIA has paid dividends.

The total of unspent dividends and interest in the bank from the 2010 - 2011 earnings years is $20684.21 at close of reporting season for 2010 and partway through the 2011 year. 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 25 February, 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

558

$0.000

$0.00

$2.240

$1,249.92

AIA

754

$2.150

$1,621.10

$2.240

$1,688.96

$67.86

4.19%

ASBPB

3,027

$0.000

$0.00

$0.715

$2,164.31

ASBPB

6,973

$1.000

$6,973.00

$0.715

$4,985.70

$1,987.31

28.50%

BGR

438

$0.000

$0.00

$1.370

$600.06

BGR

2,562

$0.990

$2,536.38

$1.370

$3,509.94

$973.56

38.38%

FBU

284

$0.000

$0.00

$8.630

$2,450.92

FBU

830

$9.750

$8,092.50

$8.630

$7,162.90

$929.60

11.49%

FPH

3,000

$2.350

$7,050.00

$3.050

$9,150.00

$2,100.00

29.79%

FPH

541

$0.000

$0.00

$3.050

$1,650.05

FPH

1,459

$3.720

$5,427.48

$3.050

$4,449.95

$977.53

18.01%

FRE

2,054

$0.000

$0.00

$3.250

$6,675.50

FRE

6,577

$3.630

$23,874.51

$3.250

$21,375.25

$2,499.26

10.47%

GFF

541

$0.000

$0.00

$1.690

$914.29

GFF

1,459

$2.330

$3,399.47

$1.690

$2,465.71

$933.76

27.47%

HLG

244

$0.000

$0.00

$3.650

$890.60

HLG

756

$2.530

$1,912.68

$3.650

$2,759.40

$846.72

44.27%

KIP

190

$0.000

$0.00

$0.990

$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

$8.080

$8,080.00

$120.00

1.51%

MFT

1,838

$8.000

$14,704.00

$8.080

$14,851.04

$147.04

1.00%

MFT

657

$0.000

$0.00

$8.080

$5,308.56

MFT

1,505

$4.200

$6,321.00

$8.080

$12,160.40

$5,839.40

92.38%

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

494

$1.050

$518.70

$0.880

$434.72

$83.98

16.19%

MHI

860

$0.000

$0.00

$0.880

$756.80

PPG

$0.000

$0.00

$0.270

$8.37

PPG

1,500

$0.440

$660.00

$0.270

$405.00

$255.00

38.64%

PPG

1,004

$0.800

$803.20

$0.270

$271.08

$532.12

66.25%

PPL

1,000

$3.090

$3,090.00

$1.390

$1,390.00

$1,700.00

55.02%

PPL

1,000

$2.870

$2,870.00

$1.390

$1,390.00

$1,480.00

51.57%

PPL

939

$4.200

$3,943.80

$1.390

$1,305.21

$2,638.59

66.90%

PPL

877

$0.000

$0.00

$1.390

$1,219.03

PPL

1,184

$1.530

$1,811.52

$1.390

$1,645.76

$165.76

9.15%

RYM

459

$0.000

$0.00

$2.340

$1,074.06

RYM

4,586

$1.970

$9,034.42

$2.340

$10,731.24

$1,696.82

18.78%

SKC

5,750

$7.430

$42,722.50

$3.260

$18,745.00

$23,977.50

56.12%

SKC

1,000

$7.600

$7,600.00

$3.260

$3,260.00

$4,340.00

57.11%

SKC

2,750

$7.700

$21,175.00

$3.260

$8,965.00

$12,210.00

57.66%

SKC

1,431

$8.750

$12,521.25

$3.260

$4,665.06

$7,856.19

62.74%

SKC

272

$4.720

$1,283.84

$3.260

$886.72

$397.12

30.93%

SKC

25,712

$0.000

$0.00

$3.260

$83,821.12

STU

$0.000

$0.00

$2.590

$202.02

STU

303

$4.740

$1,436.22

$2.590

$784.77

$651.45

45.36%

WHS

4,500

$3.730

$16,785.00

$3.450

$15,525.00

$1,260.00

7.51%

WHS

6,979

$6.000

$41,874.00

$3.450

$24,077.55

$17,796.45

42.50%

WHS

2,880

$0.000

$0.00

$3.450

$9,936.00

WHS

641

$3.710

$2,378.11

$3.450

$2,211.45

$166.66

7.01%

18.99%

	Total cost	Market value	Change
	$273,824.04	$325,812.89	$51,988.85

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c Share Investor 2011

Sunday, February 27, 2011

Warren Buffett on the Human Spirit

Investor Warren Buffett is, through his big shareholding in Munich Reinsurance, along with Swiss Re, going to underwrite the bulk of the devastation in the Christchurch Earthquake and in his 2010 Annual Letter to Berkshire Hathaway Shareholders out today, has some very sage advice for America, which as we know is in financial strife and trying to rebuild its economy as we will have to rebuild Christchurch and our economy as a whole:

"Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential–a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War–remains alive and effective. We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead."

We must not give up, Mr Buffett is right, like America, Christchurch and New Zealand's best days lay ahead of us.

Download the 1977 - 2010 Warren Buffett Letter's to Berkshire Hathaway Shareholders

From Amazon

	The Essays of Warren Buffett: Lessons for Corporate America, Second Edition by Warren E. Buffett Buy new: $24.85 / Used from: $19.17 Usually ships in 24 hours
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2010 Berkshire Hathaway Annual Letter

It is fitting that my 1000th post on the Share Investor Blog is about one of my favourite topics in terms of business, finance and investing.

Warren Buffett!

He has his 2010 Berkshire Hathaway Letter just out a few hours ago and it is essential reading for all investors, especially nutty Buffett fans like me.

Here is a taster to get you interested:

"Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential–a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War–remains alive and effective. We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead."

Apposite advice from an 80 year old at this time given the recent tragedy in Christchurch and the fact that a company that he is the largest shareholder in, Munich Re, will be underwriting the bulk of the losses from the massive Christchurch Earthquake via reinsurance.

My favourite part of the letter though is about debt and its influence on all of us. It is funny but also very wise.

The last word:

"The fundamental principle of auto racing is that to finish first, you must first finish. That dictum is equally applicable to business and guides our every action at Berkshire.

Unquestionably, some people have become very rich through the use of borrowed money. However, that’s also been a way to get very poor. When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive.

Once having profited from its wonders, very few people retreat to more conservative practices. And as we all learned in third grade – and some relearned in 2008 – any series of positive numbers, however impressive the numbers may be, evaporates when multiplied by a single zero. History tells us that leverage all too often produces zeroes, even when it is employed by very smart people."

More About Warren Buffett

Everything Warren Buffett
Download the 2010 Berkshire Hathaway Annual Shareholders Letter
Download the 1977 - 2010 Warren Buffett Letter's to Berkshire Hathaway Shareholders

From Amazon

	The Essays of Warren Buffett: Lessons for Corporate America, Second Edition by Warren E. Buffett Buy new: $24.85 / Used from: $19.17 Usually ships in 24 hours
	Buffett's Bites: The Essential Investor's Guide to Warren Buffett's Shareholder Letters by L.J. Rittenhouse Buy new: $13.57 / Used from: $7.95 Usually ships in 24 hours

c Share Investor 2011

Thursday, February 24, 2011

Auckland Airport: 2011 Half Year Review

Auckland International Airport Ltd [AIA.NZX] 2011 half year result out today improved significantly on last years result with increases in passenger numbers and freight across the board with significant rises in passenger numbers from the recent aquisitions in Queenstown and Northern Queensland.

The net profit after tax of $61.536 million was up 14% on last years half on revenue of $198 million, up 8.7 % on last year.

Individually, revenue from retail was up strongly and aeronautical derived income rose on increased traffic volumes and increased charges.

All other forms of revenue were up.

Any way an investor looks at this result one would have to be pleased with it, especially after years of fairly static profit levels.

Key Points

Net Profit after tax up 14% to $61.536 million

Revenue up 8.7% to $198 million

Increases in revenue from recent airport acquisitions

Increases in all areas of revenue

Increased dividend to 4c per share

What I am pleased about as an investor is that management have managed to grow income over all parts of their business during a recession. The retail revenue rise of almost 13% was especially significant given the parlous state of retail in general but some of this could be due to a revamp and addition of more retail outlets during expansion in various parts of the airport.

Carparking income rose an impressive $1.2 million, indicating that the captive audience of travelers and visitors has risen well over the last 6 months and that it will continue to grow as passenger numbers do.

It is also worth pointing out that Asian business into the port via new Chinese and other Asian airlines over the last half year is increasing as part of overall revenue growth and airline routes introduced after balance date from asian destinations look set to be a dominant force in the airports medium to long-term future.

Looking forward to the full 2011 year management appear bullish about the result indicating a net profit of $112.0 million to $118.0 million.

This of course should be tempered with the possible economic impacts from the Middle East uprisings via higher oil prices and locally a return to recession and impacts from the Christchurch earthquake.

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c Share Investor 2011