Share Investor

Thursday, January 24, 2013

Morningstar Revalues Sky City Entertainment Group II

A bizarre combination of a fast buck coupled with a faster mood to spend it, the latest missive - out yesterday - by Morningstar has me in stitches.

$4.70 Undervalued but there is time to purchase

Undervalued but there is time to purchase

A transformative deal that will underpin casino earnings Investment rating SKC offers gaming services at its casinos in NZ and Australia. The entertainment complex in Auckland is the major driver of earnings accounting for 60% of its operating profit. SKC faces little competition due to NZ government's blanket ban on new casino licenses. This has allowed the company to operate at very healthy profit margins and generate abundant cash flows. Earnings will pick up next year following the Rugby World Cup in 2011. Judicious investments are being considered to lift growth in the longer term.

SKC will invest AUD 350 million in expanding its casino operations in Adelaide after reaching an agreement with the South Australian government.

The deal includes an extension to the current gaming exclusivity, an increase in the number of machines and tables, lower taxes on VIP gaming and the approval to introduce cashless gaming.

The revised regulatory framework is subject to legislation and approval from the Independent Gaming Authority but we are fairly certain that the legislation will favour SKC.

Impact

We forecast Adelaide’s EBITDA to increase by AUD 62 million on an incremental basis by FY18, implying a post tax return on investment of 10.5% which will rise to 18.3% by 2022.

Our FY14 and FY15 projections increase by 1% and 2% respectively reflecting the addition of VIP electronic gaming machines. The real kicker from the expansion comes in FY18.

Since the entire cost of the expansion will be financed by debt we expect the company’s gearing measured by debt to EBITDA to rise from 2.3 times in FY12 to 2.4 times in FY16 before trending downwards. This is within the company’s banking covenants of 2.7 times.

Recommendation impact (last updated: 23/01/2013)

We are increasing our valuation to NZD 4.70 per share mainly driven by Adelaide’s expansion and the roll-forward of our earnings model. Consequently the stock appears undervalued compared to our intrinsic value.

Event analysis

A deal that is likely to transform the Adelaide casino
SKC will invest AUD 350 million in expanding its casino operations in Adelaide after reaching an agreement with the South Australian government. The regulatory relief obtained from the government, involving increased gaming product and lower VIP taxes, is likely to significantly enhance the competitive position of the Adelaide casino and dramatically lift earnings over time. We forecast Adelaide’s EBITDA to increase by AUD 62 million on an incremental basis by FY18, implying a post tax return on investment of 10.5% which will rise to 18.3% by 2022. Our FY14 and FY15 projections increase by 1% and 2% respectively reflecting the addition of VIP electronic gaming machines. The real kicker from the expansion comes in FY18.

Overall, the casino redevelopment will add NZ50 cps to the company’s intrinsic value. We are increasing our valuation to NZD 4.70 per share mainly driven by Adelaide’s expansion and the roll-forward of our earnings model. Consequently the stock appears undervalued compared to our intrinsic value. We expect a further uplift in valuation to the tune of NZ70 cps should the company bag the impending National Convention Centre (NCC) project in Auckland. SKC has been selected as the preferred developer and stands a good chance of building the NCC. This will provide another catalyst to SKC’s share price.

Highlights of the deal.

SKC entered into an agreement with the South Australian government regarding the future operating, regulatory and taxation environment for the Adelaide Casino. The highlights of the deal are:

1. An extension to the current license exclusivity from June 2015 to June 2035. This provides certainty and will be viewed positively by the company’s bankers.

2. Increase in the number of electronic gaming machines (EGM) from 995 to 1500 and table games from 90 to 200. This includes new gaming products like automated table game terminals. We understand around 200 new machines will be rolled out by the end of 2014 while the remainder will be rolled out between 2015 and 2016.

3. New taxation regime for VIP and non-VIP EGMs and table games. The deal delivers a significant reduction in EGM taxes from 35% to 10.9%, which should propel EGM revenues. This will to some extent be offset by a rise in table gaming taxes from 34.4% to a maximum of 41%. VIP taxes on tables will remain at 0.9%.

4. Approval to install card-based cashless gaming for all EGMs and table games and ticket-in ticket-out in premium VIP gaming areas. This should augur well for the casino as the current regime of using coins was becoming a big hindrance, and was hampering activity.

The revised regulatory framework is subject to legislation and approval from the Independent Gaming Authority but we are fairly certain that the legislation will favour SKC. Once enacted, the regulatory changes will come into effect from 1 July 2013

Expansion to be done on a staggered basis with real growth kicking in from FY18
The expansion of the Adelaide casino includes the construction of a six-star boutique hotel, celebrity and signature restaurants, new carpark facilities and the creation of international VIP gaming suites and salons similar to the Horizon VIP suite in Auckland.The total cost of the project is estimated to be AUD 350 million spread over three years from FY14 to FY16. The amount includes AUD 20 million to the state government and capitalized interest. We understand the initial expansion in FY14 will involve reconfiguring the current gaming floor to accommodate approximately 200 EGM’s. Following that, a new building will be built to accommodate an additional 305 EGM’s and 110 tables. This is expected to be completed by the end of FY16. The car park will be rolled out in FY15 while the hotel (consisting of 150 rooms) and new restaurants will be completed in FY16. We therefore believe the full benefits of the expansion will only be visible after FY16/FY17 and have modelled for a significant jump in revenues in FY18.

A higher proportion of premium VIP offerings and cashless gaming will boost unit revenues

The addition of new gaming machines and tables will dramatically change the revenue mix in favour of premium VIP customers. We expect all the new EGM’s and approximately 70% of the new tables to be dedicated to VIP players. The vast majority of VIP tables will be designated for domestic customers with some for international VIP players. SKC sees a large opportunity from interstate and premium local players – a market that remains relatively untapped at the moment. We believe the VIP players have shunned the casino so far because of its archaic coin based system, higher taxes on EGM’s and the lack of restaurants and bars. Similarly, the construction of the international VIP suite will entice more international players to Adelaide over time. The success of the Horizon VIP suite in Auckland gives us confidence that SKC could ultimately achieve a similar turnover in Adelaide. We anticipate marketing expenses to increase as the company tries to woo both domestic and international VIP players to Adelaide but we expect the company to earn a good return on this investment.

We assume that new EGM’s deliver unit revenues of AUD 490/day while existing EGM’s deliver unit revenues of AUD 350/day in FY18. This compares with current unit revenues of AUD 180/day. The significant uplift will be mainly driven by the move to cashless transactions and new product. Also, the new EGM’s will benefit from premium VIP players who arguably spend more than mass market EGM’s. After factoring in the effect of dilution from new machines because of lower initial utilization rates (which will improve as traffic increases) we expect the overall unit revenue per EGM to be approximately AUD 275 per day which would still be well below Auckland’s current revenue of NZD 390/day and Melbourne’s current revenue of AUD 500/day. Similarly in the case of table games we anticipate average unit revenue to be AUD 2700/day for existing tables and AUD 3390/day for new tables with the latter benefiting from a higher mix of premium VIP players.

The company’s international VIP suite will be modelled on the lines of Auckland’s Horizon suite with approximately 16 tables. Horizon has been a big success for SKC in Auckland and was instrumental in boosting VIP revenues from NZD 26 million in FY11 to NZD 51 million in FY12 on a turnover of close to NZD 4bn. We anticipate Adelaide’s VIP turnover to be approximately AUD 3b in FY18 and revenues to be AUD 41 million assuming a theoretical win rate of 1.35%.

Utilization will be low to start with but will increase with higher foot traffic
In FY18 we expect 25% of the new EGM’s and tables to be utilized. This will progressively increase as traffic to the casino rises overtime. In this respect we think the investment currently being made by the South Australian government in beefing up Adelaide’s infrastructure could potentially boost tourists to the city, which will augur well for SKC as well. We understand the state government is spending AUD 920 million in redeveloping the Adelaide cricket stadium, building a convention centre and constructing a footbridge (over the Torrens river) connecting the city centre to the Adelaide stadium. The Adelaide stadium will have a capacity of 50,000 and will host AFL games as well. The stadium is expected to be completed by March 2014 and the convention centre will also be completed around the same time. The casino will be attractively located in close proximity to the footbridge and the convention centre and should be able to capitalize on visitors coming through to the stadium as well as the convention centre. We also think that the creation of 2,000 parking lots will help drive higher casino visitations.

EBITDA expected to more than double on lower VIP taxes

The impact of lower taxes will be mainly felt on new machines and tables as they will predominantly cater to VIP players. The EGM tax rate for VIP players will reduce from 34.4% to 10.9% whilst they will remain at 0.9% for tables. Taxes on mass market EGM’s will go up from 34.4% to a maximum of 41% and tables from 0.9% to 3.4%. Consequently EBITDA margins on new EGM’s in particular will be significantly higher while margins on existing EGM’s and tables will reduce slightly because of higher taxes. Based on our aforementioned revenue projections we forecast incremental gaming EBITDA of AUD 57 million in FY18. We expect non gaming businesses such as the hotel, car park and restaurants to generate AUD 5 million in incremental EBITDA in FY18. After factoring in depreciation and interest costs we expect the expansion to contribute AUD 23 million to the company’s bottom line. In the near term (FY15) we expect the addition of 200 VIP EGM’s and higher revenues from existing machines (due to cashless gaming) to increase EBITDA by around 2%.

Reasonable uplift in valuation, traffic growth remains the key

Based on our forecast of AUD 62 million in incremental EBITDA, the project will deliver an after tax return of 10.5% on an investment outlay of AUD 350 million. This should add NZ50cps to SKC’s valuation. The after tax return will rise further with increased traffic and higher utilization of new gaming facilities. Clearly SKC will need to market the casino to would-be VIP players both domestically and abroad. However failure to achieve growth in visitors would affect utilization rates and project returns. This would have a negative impact on the company’s valuation and share price.

Gearing unlikely to breach banking covenants even if National Convention Centre materializes

Since the entire cost of the expansion will be financed by debt we expect the company’s gearing measured by debt to EBITDA to rise from 2.3 times in FY12 to 2.4 times in FY16 before trending downwards. This is within the company’s banking covenants of 2.7 times. We also expect SKC to generate solid operating cash flows and maintain dividends at the current payout rate of between 60-70%.

We think SKC’s balance sheet might be stretched should it be awarded the NZD 350 million National Convention Centre project in Auckland. On our estimates gearing could exceed 2.7 times implying the need for an equity raising to help with the funding. However the company will start generating cash flows from regulatory concessions upfront (as a result of additional EGM’s and tables in Auckland) before committing funds to the project and therefore could get away from raising equity. We will get more clarity once the deal materializes.

c Share Investor 2013

Wednesday, January 23, 2013

453 Points !

453 points. 453 away from history, 453 points away from being on top, 453 is the number that stands between you and life on the street.

I've done allot of things but working 1 day a week then 3 days the following week isn't one of them, until now, there just isn't any work.

I don't get the dole or any other type of state regulated scheme so its just me here on my own-some giving hell (what there is left) to the guys fixing up our place for sale.

You will do doubt be reading this wondering about what I think about the current comings and goings on Wall Street , whats happening here and what is going on in main-street here.

Well I do not know, gone is the hope that I had that we would be facing the gauntlet right now and paying off our loans and personal and public debt and that there would be public hints that this may have happened - ie the stock market at lows - that's lows - and all parts of the economy working their way out of their respective holes.

Instead it seems buttered up for more of the same.

Interest rates at an all-time low, but banks making more due to the fact that some of the money they have borrowed is at 2% or less, and people willing to to borrow more at relaxed rates means we are seeing another boom starting.

Little of that money is finding its way back to the productive sector.

Did we learn anything from the last nearly 6 years?

It appears that in the face of cheap money the answer is no. What happens when that money becomes dearer ?

453 points, not much in it huh.

c Share Investor 2013

Thursday, January 10, 2013

GUEST POST: Deborah Hill Cone: NZ - crazy people, crazy place

A brilliant piece of writing in the NZ Herald this morning from the woman who initially exposed the inadequacies of Mark Hotchin and Eric Watson's collapsed Hanover Group.

Deborah Hill Cone takes an acerbic look at finance company collapses, principally Allan Hubbard's failed empire and like everyone else is just about full to the eyeballs with the whole shooting match.

Too much more and we all just might go nuts!

Heerrres Debs!

Allan Hubbard!!! Give the poor guy a break!! Down boy!! Call off your slavering media hounds!! He's just a dear old granddaddy on dialysis who never hurt a fly with his humble house and humble cup of tea and humble shortbread just trying to give humble hard working moms and pops a wee hand up and now you're a-hounding and a-hauling the ol' feller into an early grave. Steady on vicar!! Old Mother Hubbard is Vee-Dub-tastic. Gets my motor running. He can be my hubby anytime!! Geddit!!

For Crying Out Loud!!! Allan Hubbard: arenchasickof him! Who cares if he is a frail 83-year-old or a 23-year-old triathlete. Tough bikkies!! He cost taxpayers a bomb, and I don't mean just an old VW!! Stop a-whingeing and a-whining granddad!! Let's get Hubba Bubba. Crazy name, crazy guy!

What a hero! Is it a bird? Is it a plane? No it's Fearless Feeley, the squinty-eyed crime-fighting superman bravely standing up to wussy-pussy public opinion in his quest for justice from those bad bankers. A man's gotta do what a man's gotta do!! To infinity, of legal fees and really really long trials, and beyond! You can't make an omelette without breaking eggs.

Super-Feeley-Office: that copper can cop a feel anytime!! Geddit!!

Have a heart, cold fish Feeley!! Are you a man or a machine? Robo-Feeley a-romping and a-stomping over the little guys without even giving them a bean to defend themselves. Exterminate!! Exterminate!! Dr Who? We've never heard of ya!! Pick on someone your own shoe size bully boy! Touchy-feely, I don't think!!

Marie Antoinette Hotchin - arenchasickofher? A-swishing and a-swanning over there in Ocker-land while your investors don't have a bowl of gruel to rub together. We know who is really to blame for Greece defaulting and global warming: Miss High-and-Mighty Hotchpotch, fiddling while Rome burns, that's who. To the barricades, chaps!! Bring your knitting!!

Mandy Hotchin, what a gal! Don't pick on our little Mandy-rella, standing by her hubby in his hour of need in her tatty last year's Yvonne Bennetti rags. Don't mind us, we're with the Mand!! You could be our Princess Di. Such a lovely jubbly lass, wouldn't hurt a fly!!

John Key, arenchasickofhim? Dr Evil!! Writing out cheques for one-squillion-dollaaars for all and sundry from his mini-me taxpayers. Oh be-have!!! Or we might have to write you a Dear John letter. Seeya!! Wouldn't want to be ya!!

John Key!! What a smile!! What a guy!! He's a-caring and a-sharing helping all those folks in need!! You can turn your key in my lock anytime!! Geddit?!!

Here they are Debbie's loaded Lotharios!!! Mark Weldon!! Well done Weldon! He's our champ raising $82 million for the earthquake appeal!! Pity you couldn't do the same for the stock exchange Marky but I'd still give you a medal!! Fwhoarr!! Rob Fyfe!! Foxy Fyfe kept his planes up in the air!! Takes more than a puff of ash to bring Air New Zealand's cap'n down to earth!! I'd inaugurate you into the mile high club Robbo!!

Alasdair Thompson!!! Take no prisoners Thompson tellin' it like it is for our big bosses!! Those silly fillies who are always a-skiving and a-diving out of the office for their girly plumbing and costing us all a packet in the process!! I'll pull a sickie for you Al!!! Geddit??!!

* With apologies to Private Eye.

Allan Hubbard Saga

Full SFO Statement on SCF Fraud Investigation

Hubbard Letter to Simon Power
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c Share Investor 2011

Wednesday, January 9, 2013

Xero: To those I haven't warned before

If you've been watching watching Xero Ltd [XRO.NZX] over the last few months you will see this little bestie rising like a phoenix out of the shitpile, still.

It is clear that there are two different things at play here.

One the successes of the company and its growth - which appears to be growing fast - are the price and fluctuation of shares. In this case fluctuating north.

One way or the other you are going to have some burnt fingers, when the truth comes out about how profitable they are going to be - all the knowing stares and nods to brokers will be long gone.

Watch for the share price take a slow trip the other way when this happens, and believe me it will .

This is a slow burner due for some correction soon.

Best to fly now and catch another.

Xero Ltd @ Share Investor

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c S hare Investor 2012

Sunday, December 30, 2012

Hot stock picks for 2013

More stockpicks in which you can slavishly salivate over in 2013. Most of them not disclosed.

Stockbrokers' stated optimism for the year ahead on local and global sharemarkets is subject to a pretty big proviso: no more global financial crises please.

The catch-phrases of the past few years - the "credit crunch", "the GFC", "euro woes", the debt ceiling - have settled and equities markets could be looking at a second year without catastrophe.

It's not a lofty goal, but JB Were investment strategy group adviser Bernard Doyle says investors can take heart from relative stability, even if growth in their returns isn't spectacular.

"It won't be a blockbuster year for growth but it could be a year where for consecutive years... you haven't had some extreme bouts of risk events or worry about like a European collapse or markets teetering on the abyss again.

"If we get two years in a row where markets aren't concerned about existential threats - threats to the financial system - that will be the biggest achievement."

But there is already a problem on the horizon. The powerhouse United States economy is running out of financial road and heading for a "fiscal cliff".

At the bottom of that particular canyon lies Greek-style austerity measures which would equate to more than 5 per cent of the United States' GDP and lead to an almost certain recession.

However, the American political divide would have to grow to Grand Canyon proportions for a disagreement on government budget policy to push the country into such serious economic repercussions.

On the plus side, China has managed to manoeuvre its economic levers appropriately to avoid the mistakes of the Western economies, said MSL Capital Markets' Peter Elenio.

"Chinese authorities worked so hard to try and take the air out of their economy, to try and learn from Western mistakes, including everything from trying to keep inflation down and making sure that banks didn't lend too much.

"They do actually have the ability to turn the tap on again and I think we're seeing signs of that now."

However Doyle said the New Zealand sharemarket had actually benefited from the recent global stability concerns, as investors looked for off-the-radar equities with high yields, which New Zealand companies specialise in.

Investors were happy to buy cheap then, but will be looking for tangible earnings growth from those companies in the new year, he warned.

"It won't be a 20 per cent [return] year, but we could have a 10 to 15 per cent year quite possibly."

What follows are market leaders' top picks for 2013.

FIRST NZ CAPITAL, ROB BODE, HEAD OF RESEARCH

1. Diligent Board Member Services (DIL): At the intersection of two of the most important mega-trends in computing, namely "software as a service" and the iPad. In 2013 we believe Diligent will demonstrate its ability to generate substantial free cashflow while maintaining high growth rates at the top line.

2. Summerset Group (SUM): Underpinned by ageing population, which will only amplify in coming years as baby-boomers start to retire. We see a busy year in 2013 as Summerset proves that it can achieve much higher build rates across multiple villages.

3. PGG Wrightson (PGW): After an extensive period of restructuring, the outlook for PGW appears to be improving finally. Our enthusiasm is due to growth in rural merchandise sales and anticipated recovery in Australian seed sales, partially offset by weaker livestock revenue and real estate commission. Combined with an improving debt position, we expect the company to resume dividend payments in 2013.

4. Sky Television (SKT): Expected to be a solid performer in the year ahead as focus turns to earnings growth resuming in FY14 following a flat FY13 result. While it is a maturing business model, the recent special dividend highlights SKT's strong cashflow generation.

5. Kathmandu (KMD): Continues to enjoy decent same-store sales growth, highlighting ongoing strength in its sector, which should translate into higher earnings now that new systems and distribution centres have been bedded down. KMD share price to earnings multiple (10 times) is still undemanding, and with good execution could exceed current earnings estimates.

MACQUARIE PRIVATE WEALTH, BRAD GORDON, SENIOR INVESTMENT ADVISER

1. Goodman Fielder (GFF): With a dividend yield in excess of 4.5 and 6 per cent growth, GFF could be priced at up to a 40 per cent premium to market price to earnings ratio [pe] multiples.

2. Oceania Gold (OGC): We forecast gold production reaching 320,000 ounces in 2013 and 350,000-plus ounces by 2014, up from 230,000 in 2012. At the same time, we expect cash costs to fall almost 40 per cent to average below $650 per ounce once [Philippines-based gold copper project] Didipio is in full production. We continue to believe that the significant production growth will be the catalyst leading to a re-rating for the stock.

3. Pumpkin Patch (PPL): with FY13 shaping up as a year of consolidation, PPL appears well positioned to deliver strong medium-term earnings-per-share [EPS] growth, enjoy the flexibility of not being handicapped by out-of-the-money hedges, rebuild the Pumpkin Patch brand, expand Charlie & Me, reduce working capital commitments and pay an appealing dividend.

4. Ryman Healthcare (RYM): has a unique needs-based model (ie aged-care-heavy), and remains the market leader in a sector with both favourable economics and attractive long-term growth driven by demographics.

5. Restaurant Brands (RBD): offers an appealing blend of solid dividend and share-price growth as it leverages its core capabilities, firstly with the introduction of Carl's Jr, and potentially in the future with other, complementary brands.

JB WERE [NZ], BERNARD DOYLE, INVESTMENT STRATEGY GROUP

1. Fletcher Building (FBU): The stock price has improved a long way from $6 to above $8. We know we're in a housing recovery, not just in Christchurch but also Auckland. The Australian housing market could be on the cusp of recovery. Earnings growth forecast is 15 per cent in 2013, 30 per cent in 2014.

2. Infratil (IFT): The underlying businesses are attractive, but they're not being recognised by the market. We have been quite impressed by earnings growth coming out of some of the underlying businesses - Energy Australia and Z Energy. That makes the stock quite attractive.

3. SkyCity (SKC): The stock price has lagged behind others around it that have moved strongly higher. We think there's valuation support for the company. There are potential catalysts for growth with the Auckland convention centre and potential for expansion of its Australian operations, including $375m investment in Adelaide. It's languished a little bit but we like the quality of the business, we're happy to be patient.

4. Guiness Peat Group (GPG): We still see the intrinsic value of the underlying assets as discounted, and as the company continues to wind up its investments, the gap between underlying value and the market's pricing will narrow. The stock has the most emotional baggage of any in the NZ market. There are a lot of disappointed investors, rightly so. To own that stock, you'd have to be happy to own Coats, its biggest underlying business, and so most likely the one you will be left with.

5. New Zealand Oil & Gas (NZOG): The management of cash resources of the company has improved markedly, and it's now paying an impressive yield. There's good discipline around its exploration plans. We like having a little bit of oil in the mix, anyway, because if I was looking into 2013 and asking what could go badly wrong, there's still Iran sitting out there with nuclear ambitions.

FORSYTH BARR, ROB MERCER, HEAD OF RESEARCH

1. Mainfreight (MFT): The firm has set out to methodically build a global freight logistics business and its acquisition of Wim Bosman for € 110 million has given MFT a solid footprint into Europe. MFT has a high marginal return on equity through leveraging organic growth from its existing network and earnings growth outpacing the market and its peers. The executive team is proactive and has proven to be highly responsive to changes in market conditions, and it has substantial global growth prospects.

2. PGG Wrightson (PGW): This company has made progress in improving the underlying operating performances of its core rural-services businesses. Its proprietary seed business remains in a strong position with a competitive advantage in its significant research and development facilities. It is focused on reducing debt through the monetisation of its loan portfolio and targeting working capital. Assuming no further drastic climatic condition issues in Australia and New Zealand, we believe PGW is well positioned to achieve solid earnings growth over the medium term.

3. Ryman (RYM): Compelling demographics mean this business continues to deliver a high-quality product that is enjoying increased demand. It has the scale, in-house expertise and development pipeline to capitalise on this demand and is a recognised market leader.

4. SkyCity (SKC): is very well placed for medium-term operational upside from improvements to its Auckland casino and the underlying economic conditions, but the operating environment remains subdued. Encouraging signs at the key Auckland property over the full-year 2012, in particular for the Auckland gaming machines and international business. A strong generator of free cashflow, a sound balance sheet and potential further leverage from the NZ International Convention Centre.

5. Skellerup (SKL): Its model is proactive, seeking to drive operational improvements and the pursuit of new product development in close association with customers.

PETER ELENIO, MSL CAPITAL MARKETS, FINANCIAL ADVISER

1. A2 Corporation (ATM): has experienced strong revenue growth in 2012 with growing appreciation of the health benefits of its products. We expect the ambitious growth strategy and investment over the last two years in expanding into the UK and other key markets will start to show results in the coming year. We anticipate that A2 will be included in the NZX 50 during the next year attracting greater investor interest.

2. Diligent Board Member Services (DIL): One of the real growth stocks of the last three years, it has a global leading position in the provision of software portal services to major corporates. Continues to benefit from margin expansion and increasing compliance requirements imposed by regulatory authorities. Sales penetration in Europe and Asia is expected to drive revenue growth. Diligent is also developing a dividend policy.

3. Skellerup (SKL): Strong dividend yield and focused management has led us to believe that this stock will continue to benefit from greater institutional interest.

4. NZX: 2013 looks very encouraging for listing fees and other revenue streams that NZX should benefit from. The Government's plans for the partial sell-down of some of the state-owned assets and the pipeline of other expected IPOs should drive improved performance. The focus of the new management team on forming strong relationships with all market participants is expected to see benefits.

5. Tower (TWR): Continues to perform well and margin expansion is expected to continue with a lower level of claims in a number of its divisions. The sale of GPG's stake could create the prospect of corporate activity.

Disclosure: Elenio owns shares in Diligent and A2.

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c Share Investor 2013

Tuesday, December 18, 2012

Broker Stock Picks for 2013

I made my 2013 stock picks back in late November and some of you maybe wondering what the professionals are thinking for next year.

Keep in mind, just like me they will have their biases and they may or may not indicate as to whether they own the stock they are picking - they should.

Some interesting picks that I will comment on latter in this spot.

2013 Picks

Goldman Sachs
* SkyCity
* Ryman
* Telecom
* Infratil
* Kathmandu

McDouall Stuart
* Abano
* Diligent
* Ryman
* Skellerup
* Cue Energy

Forsyth Barr
* Fletcher Building
* F&P Appliance
* Chorus
* Sky TV
* Ryman

First NZ Capital
* Fletcher Building
* Mainfreight
* Chorus
* National Property Trust
* NZ Oil & Gas

MacQuarie Securities
* Chorus
* Pumpkin Patch
* Ryman
* Mainfreight
* Transpacific Industries

Hamilton Hindin Greene
* F&P Healthcare
* Westpac
* Chorus
* Nuplex
* Tower

Craigs Investment Partners
* Chorus
* Auckland Airport
* Ryman
* Fletcher Building
* Westpac

Related

Brokers 2012 Stock Picks
Brokers 2011 Stock Picks

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c Share Investor 2013

Share Investor

Thursday, January 24, 2013

Morningstar Revalues Sky City Entertainment Group II

Impact

Event analysis

Wednesday, January 23, 2013

453 Points !

Thursday, January 10, 2013

GUEST POST: Deborah Hill Cone: NZ - crazy people, crazy place

Wednesday, January 9, 2013

Xero: To those I haven't warned before

Sunday, December 30, 2012

Hot stock picks for 2013

Tuesday, December 18, 2012

Broker Stock Picks for 2013

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