Forum Archive Index - February 2000

[Nick Kearney <nk@xtra.co.nz>]

james chamley wrote:
> 
> Roy wrote:
> >
> > I can't help but feel that the marketplace today reminds me of 1986-7.
> >
> > 1. Seems lots of people are "getting into" the market for easy money.
> >
> > 2. Spectacular gains being touted by some (ie xxx% in last 12 months)
> >
> > 3. Sunday papers starting better sharemarket coverage (ie the
> > players).
> >
> > 4. Some of the PE's are "unreal"
> >
> > 5. Comments like "the modern sharemarket can't crash"
> >
> > 6. Increasing levels of consumer/company debt for share investing.
> >
> > 7. The futures market is looking like a "tame game"
> >
> > 8. Rapidly increasing numbers of "pundits" saying thinks like XYZ
> > share
> > will go to $1.50 (current price 50 cents).
> >
> > 9. Governments starting to crank up interest rates to "cool down" the
> > economy.
> >
> > 10. Tipsters buying more newspaper/magazine advertising space.
> >
> > Just a thort. I have been an investor since 1969 and do not want to
> > "get
> > burn't again, like I did in 1987!
> >
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> > investors
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> 
> Roy
> 
> I can't help but agree with you in one sense and strongly disagree in
> another.  What I mean is that there seems to be a real dichotomy
> developing in the market. I found this in the Dominion tables
> 
> Highest P/E ratios
> 
> AFFCO        410.0
> FCL Forest    71.2
> NZ Experience 70.0
> Energy Eq     66.6
> Advantage     57.2
> Baycorp       53.4
> Renaissance   38.6
> Trustpower    37.9
> A Barnett     37.5
> Carter Holt   33.1
> 
> etc etc
> 
> Now that's not the same as some US tech stocks (although those companies
> that either didn't produce earnings or produced losses didn't qualify
> for the table) but still some overpricing.
> 
> On the other hand
> 
> 20 Lowest P/E ratios
> 
> Applefield   0.4
> CapProps    3.6
> McDowell    4.1
> AirNZA      4.5
> Worlindx    4.5
> TransTasman 4.7
> AirNZB      4.9
> Infratil    5.3
> DesignerTx  5.7
> Newmarket   5.7
> Ebos        6.5
> Hellaby     6.7
> 
> Now maybe some of these companies have problems but some of them are
> cheap IMHO at those ratios
> 
> Then on the asset front
> 
> Highest Price/NTA ratios
> 
> Radioworks   58.84
> Sky TV       28.46
> EPhone       26.50
> Baycorp      24.73
> IT Capital   21.75
> Maxis Corp   14.25
> Advantage    12.00
> Savoy Eq      7.40
> 
> and the cheapest price/NTA
> 
> TransTasman     0.31
> CapProps        0.33
> DesignerTx      0.33
> Brierley        0.39
> Richina         0.39
> FCL Forest`     0.40
> Tower PP        0.40
> Kingsgate       0.44
> CDL Hotels      0.50
> A Barnett       0.53
> AirNZA          0.53
> Opio            0.54
> AirNZB          0.57
> TasmanAg        0.58
> Wrightson       0.59
> DairyBrands     0.60
> KiwiInc B       0.61
> Seafresh        0.61
> Applefields     0.62
> 
> Now in there there has to be some value.  Whilst asset valuation is not
> always easy surely the low price to NTA ratios above are not indicative
> of an entirely overheated bubble.
> 
> Overall IMHO the market is (as it always has been) overheated in some
> areas and undervalued in others.  The only problem seems to be that with
> the current political climate there is noone ready to invest in the
> market to pick up the undervalued stocks (as was the case in 86-87).
> 
> Sorry for rambling on but the figures caught my eye as i hadn't been
> able to find them so readily before (must ream the "Dom" more often).
> 
> Regards to all
> 
> James
> 
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James

thanks for those

it made interesting reading

see AIRNZA came up a lot

has to be cheap at moment below $2??

cheers

nk

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