Stock of the Week: Reprise 2: New Zealand Refining Ltd

With low refining rates, massive capital expenditure and plant shutdowns largely behind them and a rising global oil prices, 2011 looks to be a resurgent year for New Zealand Refining Ltd [NZR.NZX].

Back in October NZR was a Stock of the Week because its share price was 30c below what it closed at yesterday and I commented that higher oil prices will see this stock rise (well duh) and it has but the oil price rise has been a significant one. It has been mainly due to a very cold Northern Winter bumping up all sort of petrochemical products so it is unclear just how sustainable the oil price rise will be. Having said that the recent rise is bound to gain some traction even when the Northern ice melts away.

NZR is also subject to the NZ dollar US dollar cross but it looks like the Kiwi has finally started its appropriate ride down (ironically partly due to higher oil prices) to a value that reflects the dire outlook for our economy over the next 3-5 years.

These positive impacts for NZR seem to be conspiring all at the same time and should have a big impact on the fortunes of the company for 2011.

Historically the closing price of $3.91 yesterday is relatively low but you might want to put this on your watchlist if you are thinking of buying NZR and buy on any overall market weakness.

NZR @ Share Investor

Stock of the Week - Reprise: NZ Refining Ltd
Chart of the Week: New Zealand Refining Ltd
Stock of the Week: NZ Refining Ltd

Discuss NZR @ Share Investor Forum
Download NZR Company Reports


Stock of the Week Series

Pumpkin Patch Ltd
Fisher & Paykel Healthcare Ltd
Sky City Entertainment Group Ltd
Reprise 5: Contact Energy Ltd
Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
Delegats Group Ltd
Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
Restaurant Brands
NZ Refining
Ryman Healthcare
Mainfreight Ltd
Fisher & Paykel Healthcare
Xero Ltd
Auckland International Airport
Sky City Entertainment Group
Burger Fuel Worldwide
Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances
Reprise: NZ Refining Ltd


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c Share Investor 2010

Stock of the Week - Reprise: NZ Refining Ltd

New Zealand Refining Ltd [NZR.NZX] has continued to have a lacklustre financial performance since we last visited back in June of this year. Its half year profit for 2010 was down 26% on the 2009 result.

Since June though the stock has rallied in price from $3.10 - reaching a 52 week low of $2.90 in July - to close yesterday at $3.66 after reaching a high of $3.75 in early October.

NZR management have said themselves that the company remains under pressure from uncertain refining margins and a stagnant oil price, so the only possible reasons for the share price rise are the reinstatement of a dividend and a general improvement of NZX share prices.

The current dividend of 2c is historically low for the company and generally they have been paying a good 10% plus gross yield for most of the last decade.

If you can calculate that the global oil price is set to soar (it will but just when is another question) soon then the current share price is a good place to buy.

Clearly if you see the stagnant financial position continue because of a constant oil price at present levels then the NZR share price will come under pressure if profit does not improve.

Since the share price has increased by more than 15% since June it might be worthwhile selling if you are a short term holder.

Long term investors might seize the opportunity to buy on further weakness.


Stock of the Week Series

Sky City Entertainment Group Ltd
Reprise 4: Contact Energy Ltd
Reprise 3: Contact Energy Ltd
Delegats Group Ltd
Reprise 2 : Contact Energy Ltd
Reprise: Contact Energy Ltd
Restaurant Brands
NZ Refining
Ryman Healthcare
Mainfreight Ltd
Fisher & Paykel Healthcare
Xero Ltd
Auckland International Airport
Sky City Entertainment Group
Burger Fuel Worldwide
Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances


NZR @ Share Investor

Chart of the Week: New Zealand Refining Ltd
Stock of the Week: NZ Refining Ltd

Discuss NZR @ Share Investor Forum
Download NZR Company Reports

Warren Buffett: Investing & Life Lessons On How To Get Rich, Become Successful & Dominate Your Personal Finance From The Greatest Value Investor Of All ... Men, Success Principles, Business Advice) by Ashton Marshall

c Share Investor 2010

Profit Announcements: 16 - 20 August 2010

With the following companies announcing their profit results this week, with Freightways Ltd [FRE.NZX] kicking off the week at 10.00am this morning. Investors will not only be looking for some decent results but as usual and more keenly will be looking at indicators from management as to where they may be heading in 2011.

	Issuer	Period	Expected Release Date
	Freightways Limited [FRE.NZX]	Full Year	16/08/2010
	The New Zealand Refining Company Ltd [NZR.NZX]	Half Year	17/08/2010
	Fletcher Building Ltd[FBU:NZX] Full Year 18/08/2010 NZX Limited [NZX.NZX]	Half Year	17/08/2010
	SkyCity Entertainment Group [SKC.NZX]	Full Year	17/08/2010
	Port of Tauranga [POT.NZX]	Full Year	19/08/2010
*	Downer EDi Limited	Full Year	19/08/2010
	Contact Energy Limited [CEN.NZX]	Full Year	20/08/2010
	Australia and New Zealand Banking Group Limited [ANZ.NZX]	Full Year	20/08/2010

I will be paying interest to FRE and SKC especially as they are major parts of the Share Investor Portfolio but also looking closely at NZR, POT and CEN.

The Freightways result is a good bell-weather for the wider economy, POT will indicate how exports are doing, the NZR result will give shareholders there an indicator of whether that company has or will make it out of their recent slump in fortunes. The CEN result will be indicative of wholesale power prices and their impact on the consumer and the SKC one will outline a number of issues currently on the horizon for the company.


Related

Full list of coming results - NZX Market Diary


Recent Share Investor Reading

• Warehouse Group: Shares set to follow company fortunes
• Fletcher Building: All eggs in one basket make for big risk
• Long Term View: Comvita Ltd
• Mixed Retail Outlook
• Gordon Macleod on Ryman Healthcare's Australian Expansion

Discuss this topic @ Share Investor Forum


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

Chart of the Week: New Zealand Refining Ltd

The aim of this series of charts is to show the divergence - up or down - of the selected individual stock price away from the NZX 50 Index. The chart is a 1 year look to give some relevant background to any recent (two to three months) share price movements.

New Zealand Refining Ltd [NZR.NZ] has had a poor last year share price wise and 2009 half year result.

Over the last two months though the stock has dropped from around $3.80 to close at $3.10 at close of market last Friday. The NZX by comparison has been almost flat.

The current NZR share price is at a 52 week low after being at a high of $7.65 over the same period

If you were a chartist you would say this stock has been over-sold and is ready for a correction.

The company has been affected in the short term by lower refining margins, increased capital expenditure and a suspension of the dividend. This is unlikely to continue for the long-term and the first sign of a resumption in dividend is likely to see this stock surge in price.

Significantly the stock has a $1.92 per share asset backing.

Buy on further weakness or at present levels.


Chart of the Week Series

Mainfreight Ltd
Restaurant Brands Ltd


NZR @ Share Investor

Share Price Alert: New Zealand Refining Ltd 4

Share Price Alert: New Zealand Refining Ltd 3
Share Price Alert: New Zealand Refining Ltd 2
Share Price Alert: NZ Refining Ltd
Share Investor's 2011 Stock Picks 
Stock of the Week - Reprise: NZ Refining Ltd
Chart of the Week: New Zealand Refining Ltd
Stock of the Week: NZ Refining Ltd

Discuss NZR @ Share Investor Forum
Download NZR Company Reports

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO 






c Share Investor 2010

Share Investor's 2010 Stock Picks: Looking Back

Back on December 13 2009 I picked 17 stocks in my Share Investor's 2010 Stock Picks .

At that time the market had been trending up for most of 2009 and stocks were well off their late 2008, early 2009 lows.

Since December the New Zealand Stockmarket and other global indexes have headed north with the NZX 50 Gross closing at an 18 month high today. (see chart below)

With this in mind lets see how my December picks have fared 4 months latter.

Main NZX picks


Fisher & Paykel Healthcare
[FPH:NZ]



Picked at $3.24 the stock is now $3.32, an approximate 2.5% increase.


Fletcher Building Ltd
[FBU.NZ]



Picked at $7.65 the stock is now at $8.50, an approximate 12% increase.


The Warehouse Group
[WHS.NZ]



Picked at $4.03 the stock is now at $3.80, an approximate 5% decrease.


Sky City Entertainment Group
[SKC.NZ]



Picked at $3.27, the stock is now at $3.29, a less than 1% increase.


Xero Ltd
[XRO.NZ]

Picked at $1.55 the stock is now at $1.63, an approximate 5% increase.


Contact Energy Ltd
[CEN.NZ]



Picked at $5.70, the stock is now at $6.50, an approximate 14% increase.


Mainfreight Ltd
[MFT.NZ]



Picked at $5.60, the stock is now at $6.50, an approximate 16% increase.


Main ASX Picks

Caltex Australia Ltd
[CTX.AX]



Picked at AU $8.00 the stock is now at $12.00, a 50% increase.

Coca Cola Amatil
[CCL.AX]

Picked at AU $11 the stock is now at $11.25, an approximate 2% increase.

Domino's Pizza Enterprizes Ltd
[DMP.AX]



Picked at AU$ 5.10 the stock is now at $5.70, an approximate 12% increase.


Minor Picks

Auckland International Airport Ltd [AIA.NZ] Up approx 5%.

Kathmandu Holdings Ltd [KMD.NZ] Up approx 20% but chosen for a dive that it took earlier in 2010

Port of Tauranga Ltd [POT.NZ] Even.

Michael Hill International Ltd [MHI.NZ] Up by approx 10%.

New Zealand Refining [NZR.NZ] Even.

Telecom NZ [TEL.NZ] Down approx 7 %.


Yum ! Brands Inc [YUM.NASDAQ] Up by approx 15%


In an overall rising market you are saying to yourself anyone can pick stocks (even a monkey with a dart can Darren) that are going to head north and you may be right. I picked some that have clearly done better than others and some that have fared very poorly indeed. Over 4 months you will get that but as time goes on stock prices will rise.

Stocks like Telecom have done particularly badly and I picked this stock because I thought it would plumb the depths, it did and bargain hunters would have done well out of this stock in the last 4 months and hopelessly over the long-term of course.

Some interesting moves down by the likes of the WHS and some very good rises by bell-weather stocks like MFT & FBU.

My best pick, a 50% rise in Caltex, just goes to show one can get lucky. It was trading at a comparative low when picked but oil prices were set to pick up on any economic recovery or at least the perception of one.

Overall a motley collection of results that will sort themselves out, given time, if I was right in the first place.


Disclosure : I own FPH, FBU, WHS, SKC, MFT, AIA shares in the Share Investor Portfolio.


Share Investor's Annual Stock Picks

Share Investor's 2010 Stock Picks
Share Investor's 2009 Stock Picks
Share Investor's 2008 stock picks

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c Share Investor 2009 - 2010

Stock of the Week: NZ Refining Ltd

The New Zealand Refining Ltd [NZR.NZ] company has had a tough-ish year -PDF docs available via download. Refining margins and oil prices have been down and there is some uncertainty over where prices are headed in the future but long term the company remains a good investment.

With a share price rolling between 52 week low of NZ$4.51 and high of $7.65 and a closing price of $4.86 today, there is a good opportunity for investors with some cash to get in on the cheap.

The company share price took a big hit back in August when it announced at its 2009 HY profit result it wasn't paying a dividend and its share price dropped over $2 in a week or so. It also halted production in September and announced that a loss was going to be a strong possibility in the second half of the year.

The dividend yield has previously been an outstanding one with well over 10% gross returns and one could expect a resumption to those once the second half is completed.

The bad news isn't going to last and I will be putting on my watchlist to see any further share price weakness.

Good Luck!


NZR @ Share Investor

Share Price Alert: New Zealand Refining Ltd 2
Share Price Alert: NZ Refining Ltd
Share Investor's 2011 Stock Picks 
Stock of the Week - Reprise: NZ Refining Ltd
Chart of the Week: New Zealand Refining Ltd
Stock of the Week: NZ Refining Ltd

Discuss NZR @ Share Investor Forum
Download NZR Company Reports

Stock of the Week Series

Hallenstein Glasson
Mainfreight Ltd
Fisher & Paykel Healthcare
Xero Ltd
Auckland International Airport
Sky City Entertainment Group
Burger Fuel Worldwide
Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances


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c Share Investor 2009