Thursday, October 13, 2011

Share Price Alert: Fletcher Building Ltd 3

Fletcher Building Ltd [FBU.NZX] came out with a profit downgrade yesterday for the coming 2012 first half year, down by around 10% on the 2011 year interim result. The stock was down by over 12% and at one stage down by nearly 14%. It finished down 98c to close at $6.92.

This of course provides more opportunities for investors as the market assesses the constantly changing timeline for the Christchurch rebuild but I don't think FBU it is near its lows because the property cycle isn't at bottom yet - and the Christchurch rebuild has and will contribute to that cycle - before it begins its climb to the next peak. Christchurch staying still is a big influence for the medium term and if doesn't FBU could be alot lower 12 months from now.

If the shakes stop soon the late part of 2012 to 2013-2014 and onwards for 10 years will mean good things for the company as rebuilding takes place.

For the wider building sector, outside the Christchurch earthquake rebuild, in New Zealand and other markets that FBU does business in, the recovery of the building sector looks well off and uncertain and FBU management have confirmed this.

It looks reasonably negative currently, with demand for their services and products outside of the company and its control. The only negative from the company's point of view are the reasonable debt levels they carry which should be paid down in these uncertain times given the market as a whole and its fear of the debt bogeyman.

Given all this uncertainty, the share price will be impacted, so investors wanting a share of this company should bide their time, research and most of all be patient.

Keep the cash handy and buy on further weakness.

Disc I own FBU shares in the Share Investor Portfolio

Share Price Alert Series

Ecoya Ltd
Port of Tauranga Ltd 2
Contact Energy Ltd 5
Contact Energy Ltd 4
The Warehouse Group Ltd 2
Contact Energy Ltd 3
Contact Energy Ltd 2
Xero Ltd 2
Pumpkin Patch Ltd 4
Pumpkin Patch Ltd 3
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 2
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

Fletcher Building @ Share Investor

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Long VS Short: Fletcher Building Ltd
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Sweetheart deal for Fletcher Building's Friends
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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

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c Share Investor 2011

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