Hanover, Allied Farmers deal more of the same

So the Hanover Finance "rescue" package proposed by Allied Farmers has been given the big tick in an "independent report" by Grant Samuels . Well GS does reports on a number of companies and favour in its reports usually falls on the side of the party paying the cheque, so we can largely discount the GS report.

This is what it basically said though:

The Allied Farmers proposal is superior to the status quo and a high risk of receivership for Hanover Finance investors, according to Grant Samuel. NZ Herald

I happen to have an alternative view.

As I said back in November 2009 when Hanover proposed their moratorium, the best thing to do would have been to vote to wind the company up and get what you could get.

Hanover investors instead voted to give Eric Watson and his fellow fraudsters another chance and of course we now know that has blown up in investors faces just one year latter.

Investors in Hanover and United Finance, who Allied are also interested in buying, have the choice again to this time give directors at Allied a chance to get some money back on assets that are not likely to improve in value any time soon, in a property market that is uncertain at best or to simply bury their pride and vote to wind up the companies and get the best they can get at today's market rate.

I bet you Mark Hotchin's $35 million house in Paratei Drive that taking the money now rather than crossing your fingers for a recovery under future management will be the best bet.

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Warehouse strike opportunity to buy

News earlier this week that less than a third of The Warehouse Group [WHS.NZ] workers will go on strike because they see the company as the big bad Christmas Grinch is bad short term for the company because it comes at a time of year when the bulk of their sales and profit is made but it is nonetheless another opportunity for people like myself to load up on the Christmas bargain that Warehouse shares could become if the industrial dispute drags on.

"Project Invigorate" the Warehouse' initiative to streamline and save costs includes the ability for management to direct workers into more flexible hours and conditions. Approximately 7500 staff work at the big red sheds and the bulk of the staff, who are not unionised, agree with management and so don't have a problem.

As I said above the short term prognosis if a strike is called and it drags on means that sales and profit for the next reporting period will be down but in the long term savings from increased labour flexibility along with logistics changes and inventory tweaks will mean bigger profits and more dividends for owners like myself and clearly that aint a bad thing.

The company is getting bad press in the mainstream media and they are largely behind the union from what I have been reading but below is typical of some of the coverage:

"All the staff were happy in their job. The managers used to be more flexible with the hours, they understood our personal circumstances, they used to work around our lives instead of us trying to work around the company's life. NZ Herald

I mean hang on a sec, don't you realise your boss is employing you ! at a time when economic circumstances are tough.

While I am for treating workers well, one has to realise that the company is there to make money and while you are an important part of that the company deserves the right to do what it sees fit to run their business.

The majority of Warehouse employees agree with management and only a handful of workers whipped up by a socialist union are pissing in the wind.

Time for them to go elsewhere get another job and let us run the company how we see fit.

With every cloud though there is a silver lining. I will be poised to buy if the share price drops.

Thanks to the Union for that.

Warehouse shares dropped 10c yesterday on the news and my interest will be piqued at around the $3.75 mark.




The Warehouse Group @ Share Investor

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From Fishpond.co.nz



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c Share Investor 2009

Mike Pero and Air New Zealand: Capitalism vs Socialism

The fuss made by Air New Zealand [AIR.NZ] over Mike Pero's generous offer last week to provide a plane for families of victims of the 1979 Mt Erebus crash to visit the crash site has come to a head today when Air New Zealand seems to have relented because of embarrassment over a pitiful 6 individuals allowed to go to the site for the 30th anniversary of the crash last week.

The pilot of the fateful Air New Zealand DC10 that killed 257 people was blamed by Air New Zealand management at the time for the crash but evidence was clear that the fault lay first and foremost at Air NZ's feet and that management lied and covered up to rescue the company reputation.

It seems Rob Fyfe and his fellow board members have learned little over the years.

The company that he runs, which is majority owned and financially supported by Kiwi taxpayers has had a history under Fyfe's ownership of socialistic tendencies. That is, its CEO Fyfe has muttered that his company needs more taxpayer moola to run it, using fake science to attack competitors and making public comments that really shouldn't be made by a CEO in a publicly listed company.

Air New Zealand is to all intents a government department and it is run that way.

You can see that in its response to Mike Pero's offer to get a charter plane up to Erebus. Pero made the offer, Air NZ was "offended" by it, then changed its mind and now wants to do it itself, with taxpayer money - pure politics in operation and nothing else.

The failure by Fyfe at the top to be proactive and supply a plane for as many family members of victims who wanted to go is the real story.

Of course the fact that Jim Collins, the pilot of the 1979 flight, hasn't been publicly vindicated is the biggest shame of all and politics is again to blame for that.

As taxpayers, we are all Air NZ shareholders and we should all be angry about that. Those that have made a choice to buy Air NZ shares on the NZX should be seriously looking elsewhere to make money - this company aint going anywhere good in the long-term.

I salute you Mike for standing up to the mediocrity of socialism and using your fine capitalistic skills to try and make a difference for "victims" of the Erebus disaster.

Lets hope you go ahead with the flight. I know which flight I would rather be on.


AIR @ Share Investor

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c Share Investor 2009

Stock of the Week - Reprise: Contact Energy Ltd

Contact Energy Ltd [CEN.NZ] was a Stock of the Week pick back in June and I picked it then because the share price was heading below 6 bucks and there seems to be some resistance to the stock price falling too far past the $5.50 mark and that is why I have included it again.

The stock has retrenched below $6 4 times this year and has always retraced back above that mark. As high as just over $6.50 on one occasion.

A good stock for you short termers out there and a good opportunity for those of you looking for a good company on the cheap for a long-term proposition.

I must repeat though that management of this company is poor but even a monkey running this company can make money.

Could go lower than its current $5.84, with a low this year of $5.47.

Buy on further weakness if this stock has been on your watchlist.


Contact @ Share Investor Blog

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