Buy For Yield!!

Like some of my stocks have gone up WAY out of proportion to their "importance" but one stock that I recently said sell I have to now give a buy because it has come down in price for one reason and that is because of the Tiwai Point fiasco. 

It came down from the early 9's to the mid 6's and dropping. 

i wouldn't be at all surprised to see it cross the ditch to land up in the high 5's.

Paying almost 6% net at current prices - not forecast to lower this years payout - this one is a steal right now. 

You could get it cheaper but history says you might not - especially given today's low interest rates.

For seasoned short term sellers and long term holders.



CEN @ Share Investor

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Discuss this stock at Share Investor  





c Share Investor 2019

Fisher and Paykel Healthcare Group: Sell

With the prospect of this stock ticking over to $20 and providing the portfolio a ten bagger - minus divs over 8/16 years. Fisher and Paykel Healthcare is getting more than a bit too expensive.

It currently sits at a tad over a 51 P.E. - which is too expensive but its holding up because it hasn't disappointed the market for about 7 years and look set to continue this stellar run for many more years but there is one thing that would stop this baby from climbing. I've said it before, ill say it again. A rise in the KIWI/US dollar.

Every 1 cent diff is $3m NZ +/- . So it is not insignificant the machinations between these two highly traded currencies because most of FPH business is done in the US dollar. 

Added to this is the prospect one day and it will happen, FPH will have a bad year. Everyone is aware of this but nobody will bat an eyelid as this thing lurches from one high to the next the plain fact is this is highly susceptible to a re - rating should FPH step out of line - it has happened once before since listing in 2001.

When this happens - because any downside will be temporary - is the time to cut the profits elsewhere in your portfolio and plunk as much down as you can on this one.

FPH has patents right up the wazoo and will be busy fulfilling these. They currently employ up to $NZ125m a year next year or 9% of turnover on research and development so that patent Que is is only going to get bigger.

I will not be selling the large number of shares that I hold.

If I do ill tell ya.



Fisher & Paykel Healthcare @ Share Investor

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Discuss Fisher & Paykel Healthcare @ Share Investor 






c Share Investor 2019

Contact Energy: Buy for Yield

Last time we talked about this one it was selling at about $7.50   Little did I know about it when I wrote about it in June that yesterday it was trading at $7.68.

It has traded at a high of $9.05c and was savaged recently when Rio Tinto decided it was going too do its semi annual raid of the taxpayer dollar by sticking its hand out - BUT quite rightly Labour said NO.

That is the ONLY thing this writer sees fit that Labour have done.

It is paying a good dividend of 5.7% which is forecast to stand still next year. Pretty good return when compared with a 2.5% gain in the bank.

I know I said sell before but I have changed my mind.

With CEN only supplying 10% of the power to Tiwai Point (the smelter) that lot should be gobbled up pretty quickly should the padlocks need to come out for Rio Tinto. It means Contact Energy will not have to spend as big for many many years on new power sources.

But there will a few casualties if Rio decide to go - those with high debt may need to start looking around for cheaper rates.

You would do well to have a few thousand of these to pay the power bill every year.




c Share Investor 2019

It's all about the Return

It's all about the return.

After real estate, for better or for worse, the NO 2 investment is the stockmarket.

But what we have here is diff - I changed what I was going to talk about after a well earned nap.

We have interest rates at an ALL TIME LOW.

When you change something so fundamental - forget the reason why they "had" to change - to the structure of the economy you are going to get distortions.

In this case your going to get assets - and having a share is an asset - priced way ahead of where they actually should be.

But that's normal now.

So what I'm saying is.

Until this all comes crashing down - who knows it could be right now - then rightly or wrongly. And I would say wrongly. Your just going to get the housing market - sorry to Kirsty Merriman for this one - and the sharemarket will follow. Until the last 10th of a percentage point I fear is going to be wrung out of those.

So your Meridian Energy your Contact Energy everything with a return will get hammered up and up.

When do I get out? If your me I wouldn't be too concerned.

But what goes up eventually settles down to somewhere more manageable.

I leave the rest for up to you to decide.







c Share Investor 2019