Fisher & Paykel Appliances: Worth a second look?

I have been a vocal critic of Fisher & Paykel Appliances Ltd [FPA.NZ] in the past and still have some doubts about its current management who ran the company into the ground over the last couple of years.

Having said that I do see an opportunity to make some short to medium term money here.

If we look at the one year FPA chart above we can see that the share price seems to have found a good support level in the 50 -65c range since October. It is currently trading at 1c above a near all-time low of 52 cents so fortune favours the brave but most of the surprising bad news has been brought out of the icky financial closet.

There could be further bad news from stagnant sales in this part of the world and a further drop in sales Europe and mainland America but any further bad news looks to have been factored into the current share price.

For the brave and risk loving, on further weakness.


Fisher & Paykel Appliances @ Share Investor

Long Term View: Fisher & Paykel Appliances
Stock of the Week: Fisher & Paykel Appliances
Fisher & Paykel Appliances future looking bleak
Fisher & Paykel downgrade continues fine tradition
Fisher & Paykel Appliances looking fair value
Fisher & Paykel: A Tale of Two Companies
Fisher & Paykel Appliances: In a spin over nothing

Discuss FPA @ Share Investor Forum

Download FPA Company Reports


Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
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c Share Investor 2010

Long Term View: Best Stocks from the Series

In the Long Term View series (see links to each individual stock at the bottom of this post) of posts I have looked at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns included dividends and tax credits and other relevant details.

The calculation of return is based on available data and may vary from stock to stock. An absence of data usually means a better return than I have calculated will be the case.

In each individual post the differences will be pointed out.

I have been surprised by the spectacular returns from some and not so surprised by the dismal returns of others but have learnt, once again, that the best returns come from holding good stocks for a long period.

My ideas on stocks as one of the better long-term investments have been reinforced by this series.

Below are rankings in the series from number one down to the bottom in terms of annual returns. Click on company name for more detail on returns.


Long Term View Series Ranking


1. New Zealand Refining Ltd [NZR.NZ] Over 21 years of available data NZR has returned 7800%, an annual return of just over 371%.

2. Port of Tauranga Ltd [POT.NZ] Over 18 years of available data POT has returned over 1475%, an annual return of just over 81%.

3. = Ryman Healthcare Ltd [RYM.NZ] Over 11 years of available data RYM has returned over 680%, an annual return of just over 60%.

3. = Mainfreight Ltd [MFT.NZ] Over 14 years of available data MFT has returned over 830%, an annual return of just over 60%.

5. Sanford Ltd [SAN.NZ] Over 22 years of available data NZR has returned over 895%, an annual return of just over 40%.

6. Sky City Entertainment Group Ltd [SKC.NZ] Over 14 years of available data SKC has returned over 540%, an annual return of just over 38%.

7. Auckland International Airport [AIA.NZ] Over 11 years of available data AIA has returned over 400%, an annual return of just over 36%.

8. Ebos Ltd [EBO.NZ] Over 13 years of available data EBO has returned over 455%, an annual return of just over 35%.

9. Freightways Ltd [FRE.NZ] Over 6 years of available data FRE has returned over 190%, an annual return of just over 31%.

10. The Warehouse Group Ltd [WHS.NZ] Over 16 years of available data WHS has returned over 500%, an annual return of just over 30%.

11. = Telecom New Zealand Ltd [TEL.NZ] Over 18 years of available data TEL has returned over 450%, an annual return of just over 25%.

11. = Telstra Corp Ltd [TLS.NZ] Over 12 years of available data TLS has returned over 300%, an annual return of just over 25%.

13. Pumpkin Patch Ltd [PPL.NZ] Over 6 years of available data PPL has returned over 125%, an annual return of just over 20%.

14. Contact Energy Ltd [CEN.NZ] Over 11 years of available data CEN has returned over 200%, an annual return of just over 18%.

15. Sky Network Television Ltd [SKT.NZ] Over 13 years of available data SKT has returned over 215%, an annual return of just over 16%.

16. Metlifecare Ltd [MET.NZ] Over 16 years of available data MET has returned over 540%, an annual return of just under 16%.

17. Delegats Group Ltd [DGL.NZ] Over 4 years of available data DGL has returned 50% an annual return of 12.5%.

18. Fisher & Paykel Healthcare Ltd [FPH.NZ] Over 8 years of available data FPH has returned over 93%, an annual return of just over 11%.

19. = Goodman Fielder Ltd [GFF.NZ] Over 4 years of available data GFF has returned over 30%, an annual return of just under 7%.

19. = Hellaby Holdings Ltd [HBY.NZ] Over 16 years of available data HBY has returned over 30%, an annual return of just under 7%.

21. Restaurant Brands Ltd [RBD.NZ] Over 13 years of available data RBD has returned over 60%, an annual return of just under 4.5%.

22. Briscoe Group Ltd [BGR.NZ] Over 9 years of available data BGR has returned over 21%, an annual return of just over 2.33%.

23. Fisher & Paykel Appliances Ltd [FPA.NZ] Over 8 years of available data FPA has returned over 11%, an annual return of just over 1.37%.

24. Air New Zealand Ltd [AIR.NZ] Over 8 years of available data AIR has returned over 6%, an annual return of just over 0.75%.

25. AMP Ltd [AMP.NZ] Over 12 years of available data AMP has returned minus 50%, an annual return of just over minus 4%.


Disc I own AIA, BGR, FPH, FRE, GFF, MFT, PPL, RYM, SKC, WHS shares in the Share Investor Portfolio


Download Company Reports from the Long Term View series






c Share Investor 2010

Fisher & Paykel Appliances 2010 Full Year Profit Analysis

The 2010 Full Year result for Fisher & Paykel Appliances [FPA.NZ] out this morning should leave shareholders feeling a little green around the wallet.

In relation to the 2009 Full Year result of $33 million the 2010 $83 million loss on revenue down 15%, while possibly better than most thought it would be, is nonetheless a testament to management failure.

Both the 2009 and 2010 full years were marked by one off "restructuring costs" and there are probably more of those to come but normalised profit (which FPA like to point out) has almost halved from 2009.

Revenue in Australia has improved significantly and New Zealand revenue has stopped falling.

Notably though North American sales have collapsed over the last half, while European revenue has more than halved in the 2010 6 months.

These markets were trumpeted by management as high growth and while other appliance makers sales have improved in these markets as the economy is stimulated by taxpayer handouts the more expensive and unreliable FPA product has been languishing on the shelves.

A plant built in Mexico to meet this demand has been underutilized and value of it written down this year.

Net debt, while reduced significantly because of a capital raising and bailout by Haier in 2009, at $179 million is still way too high and likely to increase and need further attention in the medium term, especially if sales don't improve.

The outlook for 2011 remains bleak in my opinion and further losses look to be on the cards even if sales improve.



Fisher & Paykel Appliances @ Share Investor

Stock of the Week: Fisher & Paykel Appliances
Fisher & Paykel Appliances future looking bleak
Fisher & Paykel downgrade continues fine tradition
Fisher & Paykel Appliances looking fair value
Fisher & Paykel: A Tale of Two Companies
Fisher & Paykel Appliances: In a spin over nothing

Fisher & Paykel Healthcare @ Share Investor

Fisher & Paykel Healthcare Ltd: Where is it Going?
Fisher & Paykel Healthcare Ltd:  Should I Buy Now?
Fisher & Paykel Healthcare Ltd: The Time to Buy
Share Investor's 2012 Stock Picks
Global Market Sell-Off Stocks: Fisher & Paykel Healthcare
Resmed takes market share from Fisher & Paykel Healthcare
Resmed kicking Fisher & Paykel Heathcares butt?
Share Price Alert: Fisher & Paykel Healthcare Ltd
I'm Buying: Fisher & Paykel Healthcare Ltd
Share Investor's Total Returns: Fisher & Paykel Healthcare Ltd
Share Investor's 2011 Stock Picks
Stock of the Week: Fisher & Paykel Healthcare Ltd
Fisher & Paykel Healthcare & the US Dollar
Mondrian Investment Partners take stake in Fisher & Paykel Healthcare
Fisher & Paykel Healthcare: 2010 Full Year Profit rests on Foreign exchange movement
Long Term View: Fisher & Paykel Healthcare
Stock of the Week: Fisher & Paykel Healthcare
Analysis - Fisher & Paykel Healthcare: FY Profit to 31/03/09
Schroder Investment Management takes big Fisher & Paykel Healthcare stake
Long VS Short: Fisher & Paykel Healthcare
Big Fisher & Paykel Healthcare trades a curious tale
Why did you buy that stock? [Fisher & Paykel Healthcare]
Drinking and Trading
Share Investor's 2008 stock picks
Fisher & Paykel: A tale of two companies
FPH downgrade masks good performance

Discuss FPH @ Share Investor Forum
Download FPH Company Reports



c Shareinvestor 2010

Long Term View: Fisher & Paykel Appliances

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO.

The calculation of returns includes dividends and tax credits.

Fisher & Paykel Appliances Ltd [FPA.NZ] had been very good to its shareholders in terms of returns since its forerunners NZX listing in 1979 - we will only be looking at the last 8 years of available data since FPA became a fully separate company from Fisher & Paykel Healthcare [FPH.NZ] and listed on November 16 2001 at $NZ2.25 (adjusted for a 4:1 FPA stock split in 2004). With $NZ 1.44 cents in net dividends (see chart above) paid and another 33% of that figure gained for those eligible for associated tax credits, a slightly more than 11% return (see chart below for the share price percentage gain against the average of all NZX indexes) over the 8 year available data gives an approximate annual net return of just over 1.37 %.

This is more than 10 times worse than the return from the average of all NZX indexes.




Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
Briscoe Group Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hellaby Holdings Ltd
Mainfreight Ltd
Metlifecare Ltd
New Zealand Refining Ltd
Port Of Tauranga Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd


Fisher & Paykel Appliances @ Share Investor

Stock of the Week: Fisher & Paykel Appliances
Fisher & Paykel Appliances future looking bleak
Fisher & Paykel downgrade continues fine tradition
Fisher & Paykel Appliances looking fair value
Fisher & Paykel: A Tale of Two Companies
Fisher & Paykel Appliances: In a spin over nothing

Discuss FPA @ Share Investor Forum

Download FPA Company Reports

Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

Buy The Intelligent Investor & more @ Fishpond.co.nz




c Share Investor 2010