Monday, March 28, 2011

Share Price Alert: Fletcher Building Ltd 2

Give to those affected by the Christchurch Quake here

Fletcher Building Ltd [FBU.NZX] has risen considerably since its previous share price alert on Feb 28. From $8.63c on close of trade on February 26 the FBU share price is currently trading up 4c at $9.07 and up 49c or approx 6% in just over one month.

The stock has rise primarily on expectations that FBU will make bumper profits during 2012 on the back of the reconstruction of Christchurch post the February 22 earthquake.

The stock has risen by around 20% since the beginning of 2011 on news of a good 2011 full year result and the quake impetus.

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.

An additional factor probably not taken into account by investors now piling into the stock is that how on earth the company will be able to handle significant amounts of rebuilding - estimated to be revenue of approx $2 billion per annum for 10 years - without first affecting revenue in other parts of the company and indeed whether the company has enough bums on seats, equipment and raw materials (in short their own business infrastructure) to be able to complete their task adequately of being the major constructor in the Christchurch rebuild.

While the current share price is breaking 3 year 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

Telecom New Zealand Ltd
New Zealand Stock Exchange Ltd
Mainfreight Ltd
The Warehouse Group Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
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

Fletcher Building @ Share Investor

Fletcher Building: Crane Takeover Offer Well Timed
Fletcher Building Ltd: 2010 Full Year Profit Analysis
Fletcher Building: All eggs in one basket make for big risk
Long Term View: Fletcher Building Ltd
Hugh Fletcher: Silver spoon no recipe for success
Long VS Short: Fletcher Building Ltd
Fletcher Building's Commercial arm keeps their head above the tunnel
Sweetheart deal for Fletcher Building's Friends
Fletcher House built on hard times
Fletcher Building down tools in the short term
Why did you buy that stock? [Fletcher Building Ltd]
A solid foundation for the future
Fletcher Building raises profit through canny management
Fletcher's got game

Discuss Fletcher Building @ Share Investor Forum - Register free
Download FBU Company Reports

c Share Investor 2011

No comments:

Post a Comment

Comment on Share Investor Stuff