Share Investor

Monday, July 6, 2009

I'm Buying: I can't resist a Bargain

I couldn't help myself and took the plunge again today. I bought some additional shares, Auckland International Airport [AIA.NZ] and Michael Hill International [MHI.NZ].

I resolved some time back that I would put a ceiling on my share buying but decided that share prices for these two stocks were getting very attractive and know I will regret not buying when they are cheap.

I bought an additional 2000 AIA in April for $1.70 to add to my original long term holding of 1000 and was getting very excited about the stock again in May, so today's low share price was a no brainer

I picked up two small parcels and may get some more if they get cheaper. I added 2000 AIA shares @ NZ$1.51 to my current 3000 holding and picked up 7000 more MHI shares @ 63c to take my total holding of that stock to a nice round 10000.

Here are my reasons for buying MHI and AIA.

I am still in the mood to get additional Sky City Entertainment Group [SKC.NZ] but think they could get cheaper still, finishing up 5c to $2.63 today and looking at Freightways Ltd [FRE.NZ] to dip below the $2.44 mark before taking the plunge there.

I am as pleased as punch at my shiny new purchases.

Michael Hill International @ Share Investor Blog

Michael Hill: Interview with Ian Fraser
MICHAEL HILL - Toughen Up: What I've Learned About Surviving the Tough Times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
Michael Hill takes on the windy city
Why did you buy that stock? [Michael Hill International]
MHI has defined growth strategy
MHI profit sparkles

Discuss this Topic @ Share Investor Forum

Auckland International Airport @ Share Investor Blog

Long VS Short: Auckland International Airport
Auckland Airport needs main focus on its core business
Marketwatch - Auckland International Airport
Why did you buy that stock: Auckland International Airport
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Discuss this stock @ Share Investor Forum

Related Amazon Reading

Security Analysis: The Classic 1934 Edition by GRAHAM
Buy new: $37.80 / Used from: $23.10
Usually ships in 24 hours

c Share Investor 2009

Friday, July 3, 2009

Stock of the Week: Sky City Entertainment Group

Seppuku looking like an attractive alternative to doing nothing

I am not asking for a ritual Seppuku that originated from Japanese Samurai Swordsmen and is still practiced occasionally by shamed Japanese CEO's today but bloody hell I would like at least an attempt at showing responsibility and least some sense of shame when our business leaders do wrong. (gee I have been writing some negative stuff over the last few days - I will be back to stocks next column, I promise)

New Zealand leaders, especially the CEOs of our listed companies are renown for not taking responsibility for making mistakes and costing shareholders precious dollars and company reputations, in fact some have made an art of the practice.

Our company and cultural history is unfortunately littered with a very long list of them.

I have one such man in my sights for special attention, John Bongard from Fisher & Paykel Appliances [FPA.NZ]

When the company announced a few days back the appointment of two new board members from their largest shareholder and recent savior of the company from collapse Haier, one might have expected JB to take a running leap off a short board table and announce he would be taking early retirement from his CEO position.

It seems that it s not to be but that is not unusual in these days of avoidance of responsibility

John Bongard borrowed too much money too quickly to move the New Zealand domiciled and created company to overseas manufacturing bases and buying an overpriced European appliance maker a few years ago with borrowed money certainly didn't help -sure expand, but do so in a financially prudent and methodical manner without putting your company and your shareholder's moola at risk.

The thing is you eventually have to pay the money back or default on your loans as FPA did.

Go on, while I'm having a bitch I should be having a go at the rest of the board as well because they voted along with JB.

Lets hope the two Chinese gentlemen that have just put their feet under the board table can sort out the bottom drawers from the top loaders.

The company will simply limp along in the same hopeless direction they have under Bongard if they don't.

Recent Share Investor Reading

Discuss this topic @ Share Investor Forum

Related Amazon Reading

Managing by Accountability: What Every Leader Needs to Know about Responsibility, Integrity--and Results by M. David Dealy
Buy new: $24.95 / Used from: $20.03
Usually ships in 24 hours

c Share Investor 2009

Thursday, July 2, 2009

Bruce Sheppard: Mark Weldon - "The Sherrif of Nottingham"

Something that I have been banging on about for years is the lack of independence of Mark Weldon and his New Zealand Stock Exchange [NZX.NZ] and the very lose structures built around Mark's fiefdom that are supposed to protect shareholders, mostly smaller ones like me.

Its partner in crime, the Securities Commission, has as much bite as Jaws with dentures and is as hands off as a doctor treating a patient with swine flu when it comes to any enforcement.

In Bruce Sheppard's column this last Wednesday he manages to articulate my feelings with alot more detail, finesse and institutional fact.

"The listing rules allowed NZX to grant waivers, of the rules. Shit, this meant that NZX could enforce its rules on everyone else but waive them for themselves. Worse as NZX investigated breaches and prosecuted them, judged the results of the prosecution and fined the offenders, this too created a terrible conflict. How would NZX treat itself if it were to breach the rules?" Read the full article here.

The waiving of NZX "rules" has been high in stockmarket news of late as they have been so busy waiving their own rules for various capital raisings that smaller shareholders are wondering whether it will be their company next that will dilute their shareholding in favour of bigger shareholders.

Essential reading for every small shareholder.

Recent Share Investor Reading

Discuss this stock @ Share Investor Forum

c Share Investor 2009

Wednesday, July 1, 2009

Cadbury could learn a thing or two from 1980's Coca Cola experiment

When you mess around with an iconic product that your customers just love to obsession just because you think you can save money by changing its appearance, packaging and well and truly tried and tested formula you risk losing that iconic status and your reputation that took generations to build and your customers.

Cadbury PLC [CBRY.LSE] have done just that by changing packaging sizes of their family block chocolates while keeping them the same size of the old by using different packaging and the most brain dead thing of all changing the taste of their very successful essential ingredient that has made them the brand to go to when you think of chocolate, the ingredient in all their products, chocolate itself!

Forget for a moment that I am a pure obsessional when it comes to chocolate, my body is part blood, water, Crunchie Bar, Dairy Milk, Moro Bar and a list as long as your arm in Cadbury products but just consider what Cadbury have done.

The product that has made them the leader in chocolate for generations has had its successful formula changed,they have substituted the very essence of chocolate, palm oil for animal fat, supposedly to save money.

That is like taking the sugar out of Coca Cola and still calling it Coke!

Business 101, you don't change a successful product that your customers would die for just to save money. Trust me, they will pay more for it.

Executives at Cadbury head office are perhaps too young to remember another iconic product that was tampered with in the mid 1980s, the aforementioned Coca Cola from the Coca Cola Company [KO.NYSE].

The formula for that iconic drink was sweetened to taste more like Pepsi and launched on customers as "New Coke" and was an instant failure. Customers protested, Coke didn't listen,

they said the new product was better and consumers just needed to get used to it but Coke management didn't figure on how obsessive their customers were (duh!) and they simply stopped buying the new Coke. Two months latter Coca Cola relented and re-launched old Coke as "Coca Cola Classic" and the two products existed side by side on the supermarket shelf for a number of years. It is no longer sold in the United States.

This should be a lesson for Cadbury who must have execs in the marketing department of their Schweppes division that know about this famous marketing blunder, they sell their own iconic lemonade and other drinks products - the Coke story from the 1980s is taught in business schools around the globe about what not to do when in business.

"Those that don't learn from the lessons of the past are doomed to make the same mistakes".

Cadbury should learn from their mistake, it is already costing them in lost sales and is going to cost them dearly in the long-term if they don't rectify their decision to make a change.

I am a life long consumer of their former delicious products and I will no longer be buying them.

They just don't taste the same.

Its Whittakers for me!

See the new Whittaker's TV Advertising comparing Cadbury to Whittakers.

Disc I love chocolate

Recent Share Investor Reading

Discuss this Topic @ Share Investor Forum

Related Amazon Reading

Cadbury's Purple Reign: The Story Behind Chocolate's Best-Loved Brand by John Bradley
Buy new: $36.46 / Used from: $27.03
Usually ships in 24 hours

c Share Investor 2009

Mainfreight Annual Report Packs a Punch

If I didn't already run a business I would want to work at Mainfreight Ltd [MFT.NZ].

I say this after reading yet another rather rip-roaring company report that you couldn't help being inspired and motivated by.

The cover of the A4 sized report has every employee's name printed on it, a rather unique idea that just shows how important Mainfreight's workers are to management and how integral they are to the sustained long term success of the company through its family culture.

Bruce Plested, Executive Chairman, has stressed a few poignant reasons why Mainfreight will be able to cope with the economic downturn:

(They have) "Committed people, hundreds of whom have been with Mainfreight for
between 10 and 30 years.

Internal promotion.

An ongoing graduate programme whereby we now have 286 university
qualified people spread through our business in New Zealand,
Australia, USA and China.

Compulsory in-house training for all new people in New Zealand and
Australia.

Weekly performance measurement in more than ten key activities –
in every branch in every country – produced at branch level.

Weekly branch profit reporting – produced at branch level at all
160 worldwide branches.

Ownership of many of our specialised operating sites.

Ever developing technology now standardised and integrated between
our branches in New Zealand, Australia, USA, China and Hong Kong.

Many thousands of great customers, who strive and innovate, who
work hard and are an integral part of our success."

Along with all the usual facts and figures a typical company report contains, there is inspirational company mantra that isn't merely empty verbiage and also a huge focus on the current economic climate, what the company is doing to ameliorate the effects of this downturn and how they see we can use this recession as an opportunity to change our direction as a country in a big way.

Bruce also goes on to add that New Zealand is a country slipping behind in the wealth stakes and we really need to do something to get off our butts and work to increase our productivity, something that has been holding the country back for nearly 40 years, but especially in the last 10.

He gives advice as follows that most people with at least half a brain would agree with:

"Why don’t the losers in the election go and get a job instead of the
futile debate they engage in, and the bureaucracy they carry?

Why not wipe the jury system for a wide range of crimes and let a
judge decide guilt or innocence?

What about a four-year electoral period to enable the development of
longer term strategies?

Instead of building new prisons let’s release enough inmates on a
regular basis to accommodate new offenders.

Let’s provide free university education for the skilled people we
need, i.e. doctors, scientists, teachers, engineers, if they fulfil certain
employment criteria in New Zealand.

Introduce capital gains taxes on sales of property other than the
family home.

Lower company tax to 10% or thereabouts. Nothing will boost our
economy more than nurturing our businesses. The tax will still be
earned by the Government, as dividends are taken.

If we really want a cycle track the length of New Zealand, why not
attempt to do it using volunteers, the unemployed, companies or just
challenge us to find a way.

Appoint successful young business people to serve on the boards of
SOEs, and other Government run organisations. As day follows night,
weak boards result in weak management and poor outcomes.

Don’t allow local bodies to own majority shareholdings in strategic
assets, i.e. ports, airports, electricity. Much of this monopolistic
structure is effectively bound in shackles through incompetent and
agenda driven boards."

He does muddy his economic waters a little by mentioning the economically illiterate Rob Muldoon and financial genious Roger Douglas in the same breath and commenting that we can learn things from them -in Muldoon's case what not to do (my emphasis).

Mostly good advice apart from a brain hemorrhage at the Prison system but great commentary that every third form economics student and every other company CEO should read.

I recommend that you have a read too.

Disc I own MFT shares

Download the 2009 Mainfreight Annual report here .

Mainfreight @ Share Investor

Mainfreight Ltd: Full Year 2010 Profit Analysis
Long Term View: Mainfreight Ltd
Share Investor Interview: Mainfreight's MD Don Braid
Stock of the Week: Mainfreight Ltd
Questions to Mainfreight's MD Don Braid
I'm Buying: Mainfreight Management delivers the goods
Mainfreight Annual Report Packs a Punch
Analysis - Mainfreight Ltd: FY Profit to 31/03/09
Mainfreight VS KiwiRail: The Sequel
Long VS Short: Mainfreight Ltd
Why did you buy that stock? [Mainfreight Ltd]
Mainfreight 2008 Annual report worth reading
KiwiRail will cost Mainfreight
Mainfreight keeps on truckin
A rare breed
Share Investor's 2008 stock picks

Discuss MFT @ Share Investor Forum

Download Mainfreight Company Reports

From Fishpond.co.nz

c Share Investor 2009

Tuesday, June 30, 2009

Pumpkin Patch's North American Downsizing a Prudent, Overdue Move

News out today that Pumpkin Patch [PPL.NZ] are going to ditch 20 of their 35 United States stores is good news for the company and investors.

It means investors will have less pain in the short term and that there is also still a base in North America from which it can expand again when economic conditions are far more rosy. The uncertainty of retailing conditions in the US and just how long things are going to be dire cannot be ignored.

As a shareholder am pleased about management's move but given that the retail sector in the US has been behaving like a WW2 Zero pilot on a suicide mission for an extended period, one could be a little critical that this move wasn't made 6 months ago. Having said that the exit seems to have been well planned.

Of course the US and New Zealand is littered with collapsing retailers, so Pumpkin has done well to survive, let alone make a profit.

Trading in New Zealand and Australia has been surprisingly resilient and my hunch and anecdotal evidence is that very high birth rates in both countries stimulated by welfare targeted at families having kids (a story for another day on another blog) means that demand in this region has been artificially raised - Thank's Aunty Helen!

There will be costs to exit the 20 stores and this will clearly make the bottom line look awful next reporting period in October but in amongst that bad news is one key piece of good news, 11 of the remaining 15 stores in the US have had their leases re-negotiated in a southerly direction. This is one of any retailers biggest sustained costs.

On a personal note, much of my reason to buy this company was its expansion plans in America and I am pleased the company is still going to pursue that market some time in the future. Without that avenue for growth I would have exited the company when the share price recovered.

The share price moved strongly upward on this news mainly because losses in the US will be far lower than previously pegged by analysts.

Look for an opportunity to buy on lower share prices when the forthcoming book entry loss is announced in October.

Pumpkin Patch @ Share Investor

Digging at Pumpkin's Profit
Long vs Short: Pumpkin Patch Ltd
Pumpkin Patch Buyback shows Confidence in the Future
Pumpkin Patch takes a hit
Pumpkin Patch ripe for the picking
What is Jan Cameron up to?
I'm buying
Why did you buy that Stock? [Pumpkin Patch]
Rod Duke's Pumpkin Patch gets bigger
Buyer of large piece of Pumpkin Patch a mystery
Pumpkin Patch a screaming buy
Broker downgrades of PPL lack long term vision
Pumpkin's expansion comes at a cost
Pumpkin Patch vs Burger Fuel
Pumpkin Patch profits flatten
New Zealand Retailers ring up costs not tills

Discuss this stock @ Share Investor Forum

Related Links

PPL Financial Data

Related Amazon Reading

International Retailing by Brenda Sternquist
Buy new: $64.40 / Used from: $52.00
Usually ships in 24 hours

c Share Investor 2009

Monday, June 29, 2009

Smacking/Anti Smacking Referendum

I must just put a plug in for voting in the Anti Smacking/Smacking Referendum that kicks off July 31.

Everyone should vote if they have an opinion on this subject, regardless of what that opinion might be, it is your democratic right to have a say even if the arrogant John Key says he will ignore the outcome of the referendum.

The referendum question is very clear, ” Should a smack as part of good parental correction be a criminal offence in New Zealand?” if you think a smack is OK you vote No, if you think a smack is not OK you vote yes.

Most people agree that the question is simple even though there has been much malarkey raised to try and confuse the issue.

This blog and myself support a no vote because I don't like the way good parents are being undermined and bad parents are getting away with beating and killing their kids.

Vote wisely.

Additional Info : From the Referendum site

How to vote

A Citizens Initiated Referendum on the question” Should a smack as part of good parental correction be a criminal offence in New Zealand?” runs from Friday 31 July until Friday 21 August. Read more »

When to vote

Voting in the referendum runs from Friday 31 July until Friday 21 August. Read more »

Going to be overseas?

If you have provided an overseas postal address with your enrolment details your voting paper will be sent to you directly. If you are overseas or your voting paper is sent to your New Zealand address you will need to arrange for your voting papers to be forwarded on to you. Read more »

Help for voters with a disability

The result

The preliminary result of the referendum will be announced after 7.00pm on Friday 21 August. Read more »

What is a citizens initiated referendum?

A Citizens Initiated Referendum gives everyone who is enrolled the opportunity to vote on a specific question. Read more »

Frequently asked questions

Questions and answers about the referendum on the question "Should a smack as part of good parental correction be a criminal offence in New Zealand?" Read more »

2009 Referendum

c Political Animal 2009

Aaron Bhatnagar Nuts off, Again

Further to the personal attack from local politician directed towards me over my mild criticism of his distasteful attack on a dead person, Michael Jackson in this particular case, Aaron Bhatnagar has another go on his blog, this time during office hours, on ratepayer time .

He makes a reference to a website put up by someone with distasteful, slanderous stuff written about me, putting my family in danger because he asks people to look at it, because it contains information that shouldn't be on the net and simply isn't true.

Is this the sort of individual that should be representing you, causing trouble for a fellow Aucklander?

In my opinion we need higher standards for our Pollies and Aaron just doesn't fit that bill.

I will let you be the judge of that dear reader.

This will be the end of the matter, as I dont want to give Aaron the attention he so clearly lacks.

c Political Animal 2009

Aaron Bhatnagar Nuts Off

It is hard to get good, upstanding representation from our politicians these days.

National, and especially local, and from all political colours, we seem to be dragging the bottom of the barrel when it comes to governance.

If it isn't Andrew Williams, Mayor of the North Shore, spending ratepayer money like a drunken sailor, with his own ratepayer funded wine, we have Mayor Banks across the bridge trying to outdo him by digging up perfectly good footpaths in the CBD again and spending 80 million bucks "turning sidewalks into roads", while he has well and truly broken his 2007 election promises by promising to use truckloads of ratepayer moola on the 2011 Rugby World Cup.

One of John Banks disciples, Auckland City Councillor Aaron Bhatnagar, appears to be fitting the mold (or should that be mould) when it comes to the stereotypical machinations of local politics.

Aaron is one of those councillors behind the push to build a multimillion dollar shed shaped like a shoebox on the Wynyard Wharf for the wealthy cruise ship set, instead of a world class public space or building, on one of the best harbour sites in the world- don't we just love the Sydney Opera House and its public surrounds.

Anyway Aaron has adventurous activities online, he nutted off yesterday:

This email exchange yesterday between yours truly and Aaron after he made tasteless jokes about Michael Jackson's death on his facebook page.

Only his replies are quoted because he has removed me from his Facebook friends after I told him to bugger off and my comments have been removed.

I basically started off saying he was being tasteless joking about the death of someone and joking about anyone's death is a pretty low thing to do. I wasn't abusive at all.

Here were his replies:

1."Grow up Darren, it was a very mild tongue in cheek comment based on one of his more famous songs. I've seen some pretty repulsive jokes about MJ, usually involving allegations of sex abuse by Jackson, so what on earth is your problem?"

When I suggested that his comments about someone dying were inappropriate for anyone in politics:

2."Any besides, what's my political career got to do with this? If politics somehow distorts my moral compass, what do we make of you, whose blog is called "The Political Animal - Politics with balls".

Are we to take it that your political interests generate an unhealthy fetish with genitalia?"

When I suggested what his mother might think about him joking about someone dying.

3."I get it now. You are Church of Michael Jackson. No criticising MJ by anyone.

I suggest you put a damp cloth on your forehead, have a nice cup of tea, and a take yourself off for a nice nap. You need it.

What a humourless scold."

4."What a tantrum!

I'm frankly astonished at your comments. Of all the things I could have said, it's almost unreal that my rather mild turn of phrase has set you off. If that's a standard you hold dear, then I don't want any of it."

When I told him to bugger off (this is when I DID get a little testicularly challenged) spend some more ratepayer and his daddy's money and make his jokes about dying somewhere else:

5. "LOL - now I know you are a nasty piece of work!"

Now I am used to getting abused by all sorts of people because I have strong opinions and put them out there and fair enough, I LOVE good debate, but a local politician having a laugh at a person dying (even a misunderstood individual like Jackson, there is perhaps a time for jokes but long after the person has been buried) so soon after they have died, surely shows the mentality and arrogance of an individual that really isn't suitable to represent people - what the hell is he saying behind his constituents backs!

Does he joke and carry on in a similar vein? Who knows.

For goodness sake, if you have a political career and have dopey things to say, keep them to yourself Aaron, it aint a good look.

It isn't that bright and it reveals a somewhat foul taste in the mouth.

We clearly need much better representation than this.

c Political Animal 2009

Sunday, June 28, 2009

Michael Hill: Interview with Ian Fraser

You may have missed an interview with Michael Hill yesterday with Ian Fraser. I only caught it by accident while turning the dial.

Michael is currently on a media blitz to sell his book and this is another but more interesting leg.

The interview covers off his personal background and motivation to get him where he has.

It is very interesting to hear that up until the infamous house fire when he was 43 he wanted to "do more" in life but, like most of us, was fearful of making that step out of the comfort zone we place ourselves in. After that incident he reacted in a way that most wouldn't - he calmly decided that there was more to life than what he had experienced thus far and he was going to "go for it".

The fire somehow was the impetus that removed that block and allowed Hill to face new things without fear and that we all face that moment when a choice can be made that will change our lives but we don't always take it. -he did.

There was also an interesting admission, he mentioned that he has made a mistake by buying Whitehall Jewelers Holdings-based in the Chicago out of bankruptcy last year - not usually something that CEO's would readily admit to and he says he has learnt from it, the struggling US business has taught the company as a whole how to respond to the current tough economic times, he said.

I would recommend a listen, the interview is 46 minutes long, 16 MB and can be downloaded at Share Investor Forum here. You have to be a member to download, its free and quick - register, it takes less than a minute.

Disclosure I own Michael Hill International shares.

Michael Hill International @ Share Investor Blog

MICHAEL HILL - Toughen Up: What I've Learned About Surviving the Tough Times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
Michael Hill takes on the windy city
Why did you buy that stock? [Michael Hill International]
MHI has defined growth strategy
MHI profit sparkles

Discuss this Topic @ Share Investor Forum

Buy Toughen Up: What I've Learned About Surviving Tough Times

$NZ 33.82 -15% off - from Fishpond.co.nz

c Share Investor 2009

Friday, June 26, 2009

A Note to Prospective Restaurant Brand's Shareholders

There has been market talk in the past and more out today about how positive things look for Restaurant Brands [RBD.NZ] profit next year.

Yes, profit will be up marginally from last year and substantially from the last few years but this company really has had a dreadful past, so any increase in profit will look good.

I am not sure whether anyone follows this company closely in the broker/choker set but if they do they were either in nappies when the company listed back in 1997, too lazy to analyze the company's history properly, or ignoring the bleeding obvious simply because the stock will be back in the NZX 50 next week and brokers will have to add the stock to their index funds - read pump and dump.

While South African CEO Russel Creedy has done a much better job than any leader the company has had, he has gotten the company out of the fast food graveyard by focusing on cutting costs, speeding up service times and levels of service (my experience from gorging at KFC for the last 15 years and being a large RBD shareholder in the past) the industry that his company operates in is notoriously cyclical.

Fast food is currently undergoing a renaissance of sorts because of dire economic circumstances and people are looking for cheaper places to eat. RBD is now in the upper part of the fast food cycle, in fact I mentioned about ten years ago that its business cycle is up and down more than a cheap Krd hooker, anyway, that aside, my bet is that the stock may even race up to one and a half dollars or more from its current 1.02.

It has moved over the last couple of months ago from a low of 57c a stock price it last reached in the late 90s.

My point is if you are interested in buying into this stock, be warned that you should be there for the long-term because its stock price will come down again when it moves back off the peak of its economic cycle and once again struggles to maintain profit.

You have been warned dear readers but as always, do your own research.

Restaurant Brands @ Share Investor

Pizza Hut sell-off provides opportunities all-round
Danny Diab & Restaurant Brands
2008-2009 KFC sales figures mislead investors
KFC Finally Flying
Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
McDonald's playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures

Discuss Restaurant Brands @ Share Investor Forum

Related Amazon Reading

KFC in China: Secret Recipe for Success by Warren Liu
Buy new: $13.57 / Used from: $11.86
Usually ships in 24 hours

c Share Investor 2009

Long VS Short : Auckland International Airport

In this eight installment of the Long vs Short series I am once again going to take look at the chart comparisons for a stock from the Share Investor Portfolio and compare the 10 year return (chart above) to the turmoil of the last year with a 1 year return chart (large chart at bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view (10 years )and will make a comparison against the NZX50.

In this segment of Long vs Short I will take a look at Auckland International Airport Ltd [AIA.NZ] .

I currently hold 3000 Auckland Airport shares after buying 1000 of them in November 2006 and 2000 in April of this year. (see small chart below for detail)

My Portfolio
Symbol	Price	Value	Earned
AIA.NZ	$1.600	$4800	$-540

You own 3000 [AIA.NZ] shares purchased at $1.78 [$5340]

This stock has been performing well fundamentally over the last 10 years and steady over the last 12 months. Its share price though has been fluctuating wildly over the last few years. From a high of over $3.60 during a competing bid to seize control of the company in 2007-2008 to $1.54 recently.

If I had held this stock for the full 10 years (see large chart at top) my return would have been a whopping 210%-including dividends, tax credits and minus brokerage, the NZX is a gross index of stocks.

By comparison if I had held the stock for just this last year (see large chart below) my return would have been a loss of just over 35%.

My total return after 2.5 years or so of holding AIA stock is a loss of just under 10% (see small chart above) That is after dividends and tax credits are added and brokerage applied, not bad considering the market drubbing of every listed NZX share but there is an 8c gain from the 2000 shares I bought in April at $1.70 each.

Having said that this exercise proves, once again, that the long-term bet is the only one to take.

Long-term, 8 in this series, short term 0.

http://chart.bigcharts.com/custom/fairfax-com-nz/chart.asp?rnd=0.3338466193181723&style=2242&symb=AIA&size=1&type=64&time=1yr&freq=1dy&comp=&compidx=NZ50G%7E1392984&ma=&maval=&lf=&lf2=&lf3=&uf=16384&arrowdates=&arrowlegend=&country=NZ&sid=162937

Long vs Short Series

Michael Hill International
Freightways Ltd
Pumpkin Patch Ltd
Fisher & Paykel Healthcare
Mainfreight Ltd
The Warehouse Group
Sky City Entertainment

Auckland International Airport @ Share Investor

Auckland Airport needs main focus on its core business
Marketwatch - Auckland International Airport
Why did you buy that stock: Auckland International Airport
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Discuss this stock @ Share Investor Forum

Related Links

AIA Financial Data

Related Amazon Reading

The SmartMoney Guide to Long-Term Investing: How to Build Real Wealth for Retirement and Future Goals by Nellie S. Huang
Buy new: $24.95 / Used from: $0.01
Usually ships in 24 hours

c Share Investor 2009

Thursday, June 25, 2009

Pizza Hut sell-off provides opportunities all-round

The finalisation of details yesterday of a decision made last year by Restaurant Brands [RBD.NZ] to ditch their company owned Pizza Hut restaurants and flog them off to owner/operators brings to an end the long running saga of this money losing brand in RBD's stable of 3 - KFC & Starbucks being the two others - brands.

For many years Pizza Hut has dragged down the company bottom line while KFC has struggled at times to hold up the whole company - Starbucks has also been a money loser since its introduction in 1999.

Many of my readers will know that I was a early shareholder of RBD and actively pushing management back in 1998 to ditch Pizza Hut and sell them to owner operators as that was how their competition was kicking Pizza Hut's backside.

Better late than never!

This latest development will be good for RBD shareholders. Not only will RBD get one-off money for selling Pizza Hut stores but they will also get ongoing management fees for each store that is sold-a sub franchisor of sorts, as YUM! still remains the big daddy franchisor.

All Restaurant Brands shareholders need is the double -Starbucks to be sold off - and the company will be much more able to withstand the highly competitive fast food market with KFC as the big star.

Of course the Pizza Hut sell off provides a good opportunity for individuals to buy a run down business and develop it into a good one.

A franchised pizza business like Pizza Hut, if run well, is a great way to make money.

Domino's Pizza owners in New Zealand have done this well over the years and this has left Pizza Hut as the also ran after being the dominant pizza force in New Zealand for years.

If you have a couple of hundred thousand free cash and access to debt you might well want to give RBD a call right now.

Restaurant Brands @ Share Investor

Danny Diab & Restaurant Brands
2008-2009 KFC sales figures mislead investors
KFC Finally Flying
Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
McDonald's playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures

Discuss Restaurant Brands @ Share Investor Forum

Fast Food, Fast Track: Immigrants, Big Business, And The American Dream by Jennifer Parker Talwar
Buy new: $30.60 / Used from: $0.56
Usually ships in 24 hours

c Share Investor 2009

Monday, July 6, 2009

Friday, July 3, 2009

Thursday, July 2, 2009

Wednesday, July 1, 2009

Tuesday, June 30, 2009

Monday, June 29, 2009

Sunday, June 28, 2009

Friday, June 26, 2009

Thursday, June 25, 2009

Total Pageviews

Translate

Search Share Investor

Share Investor Blog Archive

Share Investor

Share Investor Portfolio Individual Shareholder Websites

Market/Financial News

Stockmarket/Business Blogs/Share Forums

My Favourite Reading