Forum Archive Index - July 2000

["Mark Hubbard" <mhubbard@es.co.nz>]

From: Brian Gale <brigale@i4free.co.nz>
To: <sharechat@sharechat.co.nz>
Sent: 10 July 2000 9:25 PM
Subject: [sharechat] WHS - The Red Barn


>
> With all the excitement about Fletchers....what about WHS up 33% from mid
> June...going like a rocket albeit on relatively small turnover.
>
> Thought their plan to have their own Union clever.  A step ahead of the
> politically motivated move back to Union activity.  From observation I
> would think they have high staff turnover and would have been vulnerable.
>
> Any thoughts ?


It depends on how you model it, however, according to my analysis, at a 16%
discount rate (not high), WHS would have to be looking at earning growth of
22%+ for the next 5 years, then at least 15% growth for the next five years
after that to justify its current price. I just can't see how that is
justified. I sold out at $5.15.

Given that, though, I thought the idea to create their own union a good one
(Tindell certainly is no fool). That said, I can't see them pulling it off -
under the ERB that young work force in my mind becomes a bit of a liability.

And surely the company's biggest problem short term is the low NZ$ - that
must have an impact on earnings.

If it ever gets back down to about $4.80 I'll consider buying back in,
otherwise, it must have done its dash surely and I'm looking to Australia
for further investment.




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