Share Price Alert: Fisher & Paykel Healthcare Ltd 2

Fisher & Paykel Healthcare Ltd [FPH.NZX] shares have come back onto my radar again as they closed at a price yesterday not seen since September 2011, $2.18, (see 1 year FPH chart above) and before that not seen since mid 2008. This weakness in share price has nothing to do with the performance of the company - it has record revenues - but everything to do with the weak US dollar. The aforementioned weakness the two previous times in the last six years (see 6 year FPH chart below) was also because of this currency fluctuation.

The share price was up by 5c yesterday on a massive turnover of 15 million shares as Mondrian Investment Partners Limited sold nearly 10 million shares and now has ceased to own more than 5% of FPH. Mondrian has been a substantial FPH holder (over 5% holding) since September 2010 and on the share register for longer. The company still own around 25 million shares but look like they have lost substantially on yesterdays selldown.

It looks like they are betting that the US dollar will weaken and the share price may fall further so they can buy back cheaper but there has been good support at these levels before and as a current FPH shareholder I am putting in a buy today for at least 15,000 shares.

I am guessing that ACC or some other Government related saver scheme would have taken the Mondrian stake.

At these share price levels the stock is returning 8% gross and with imputation credits you are getting twice as much than a term deposit on a quality stock that has the potential to increase its capital value substantially when the currency fluctuation goes in the company's favour.

Be patient but not for too long at these levels.

Disc I own FPH shares in the Share Investor Portfolio


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c Share Investor 2012

Mondrian Investment Partners take stake in Fisher & Paykel Healthcare

Mondrian Investment Partners yesterday become a substantial shareholder in Fisher & Paykel Healthcare Ltd [FPH.NZX].

The fund manager disclosed they took a 5.01 percent stake after purchasing 483,566 shares on September 1.

This is the first shareholding the private investment company has taken in FPH and they give the following reasons for their investment choices:

"We invest in stocks where rigorous discounted cash flow analysis isolates value in terms of the long-term flow of dividends. Dividend yield and future real growth play a central role in our decision making process and over time the dividend component will be a meaningful portion of expected total return."

Hard to know who the seller was but at an educated guess it was probably The Capital Group Companies, Inc who had a 4.92% stake in February 2010 and at that disclosure had sold an almost 1% stake since they disclosed their 5.08% holding in June 2009.

FPH has had a number of stakeholders in the 5% range over the last few years but it seems even though they have stated at time of purchase that their investments are long term they have exited after a few years.

This company is a great long-term investment, one of the best growth propositions on the NZX, so any company taking a substantial holding needs to be patient when investing. They are not going to make big term gains in a few years.

The big gains will be seen 7-10 years.

Disclosure I own FPH shares in the Share Investor Portfolio

Fisher & Paykel Healthcare @ Share Investor

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c Share Investor 2010