Forum Archive Index - August 2000

["Warner Lamb" <cloud9@i4free.co.nz>]

Yes. This fudging stuff is poor. Some of our better growth companies...Look
at the WHS. Still getting coverage of their "accounting style"
Another which is very important to watch for is "one off" sales (extras)
being accounted for which certainly has an effect on fundamentals when you
look into it carefully.(it can significantly alter EPS and PEs for a short
time.) Look at GPG and their low PE!(I have heard this many times) ah, but
is it really that low..no.(not historically) This is why alot of stock gets
valued by PEG in conjuction, which uses 5 year forecast growth in EPS.
One that comes to mind which I should have pointed out recently is
Wrightsons WRI. from "NZ investor" "Although apparently in a good position
to benefit from any upturn in the agricultural sectors fortunes, the company
has recently become adversely embroiled in the genetic engineering debate.
Whilst the lastest result seems at first sight to be a vast improvement on
the previous year, when extraordinaries are taken out of the picture the
position is in fact worse. The main extraordinary is the sale of Wrightsons
Farmers Finance, which many commentators believe will limit the company's
ability to take advantage of the expected upturn in the agricultural
economy.
So while a one off result may look good, you have lost the future earnings
(or losses) from that sale.(affecting PE and EPS)
Warner


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