Forum Archive Index - February 2002

["Chris Castle" <c.castle@paradise.net.nz>]

Guess we had much the same reaction, Snoopy - in our own fashion. Sure I
can't get you into a few penny dreadfulls?
----- Original Message -----
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Monday, February 18, 2002 1:08 PM
Subject: Re: [sharechat] Wheres the value?


> Hi nick,
> >
> >
> >Looks very hard to find anything worth buying at the moment. A
> >year or two ago we had top quality stocks languishing at cheap
> >prices, ie Restaurant brands 1.00 , contact energy 2.50 auckland
> >airport 2.50 Fletcher building 2.00, wrigtsons .45  Nufarm 3.50 the
> >list goes on     Now on the other hand its difficult to recommend
> >anything with much confidence.
> >
> >
>
> Looks like you're investing in the rear view mirror Nick.  My
> first motto of investing is always look forwards.  I'd
> hesitate to call Fletcher Building and Wrightson's 'quality shares'
> at any price in my terms, but I'll comment on some of the others.
>
> 'Contact Energy' has only just been independently valued at around
> $4.14 minimum value, and you can certainly buy it for less than that
> today.  Sure it is not $2.50, but when it was $2.50 none of us
> realized just how good it was.  That energy crisis winter last year
> showed up the weaknesses in the other listed energy shares.  When I
> thought I was going to be forcibly bought out of Contact, I had a
> look at Trustpower, Natural gas, Powerco and decided that even at
> $4.14 Contact was still cheap compared to them.  So at around $3.70,
> I don't think you could say Contact was a bad buy.   I am sure that
> Edison Mission will ensure that all shareholders continue to get good
> dividends out of CEN too.
>
> 'Restaurant Brands' is on a competitive dividend yield now, even at
> around $2.   Uncertainty as to where the Pizza Hut and Starbucks
> brands are going has been sorted out.  And all those property sales
> have primed Restaurant Brands up to be in a very strong cash
> position.  So although it isn't as 'cheap' any more, it's not exactly
> 'bad value' either as the downside risk has been reduced as I see it.
>
> 'Sky City Entertainment' is looking a riskier proposition than at
> this time last year.  But we do have another America's cup year
> coming up.  That was good for business in Auckland the last time
> around and I think SKC could even withstand the collapse of one of
> their more risky ventures without cutting their dividend.
> Furthermore the SKC dividend today is far better than having your
> money in the bank.
>
> Then of course there is dear old Telecom.   It is increasingly
> looking like they have made yet another hash of getting into
> Australia.  But the local market is still good for them.  And thanks
> to the share price halving over the last 18 months the dividend yield
> is still good!
>
> Mind you I'm not saying that all of these won't go lower.  Indeed,
> with a rise in interest rates these income shares all have the
> potential to be sold off.  But I'm picking the underlying growth in
> their core businesses will mitigate any price falls - and I can't say
> the same about all of those listed property companies on similar
> yields!
>
> Of course none of RBD, SKC, CEN or TEL will 'get you rich quick', but
> even if the global environment does go bad, so what for these four?
>
> NZrs will still make phone calls and use energy.   Maybe they'll
> spend less time in sit down restaurants and buy cheaper takeaways
> (good for Restaurant Brands).   And the America's Cup isn't going to
> be cancelled, which should make up for any fall off in local
> gambling (steady as she goes for SKC).
>
> All in all I have no great wish to be "cashed up" as far as my NZ
> portfolio goes.  I think any funds I have in the above are better
> where they are rather than in the bank. SNOOPY
>
> discl: Hold CEN, RBD, TEL and SKC
>
>
> PS Don't follow Nufarm closely, but wasn't there some talk a couple
> of years ago that their true value was considerably more than $3.50?
> Perhaps a NUF shareholder could tell us why they are still apparently
> quite cheap?
>
> Also I can't help but agree that AIA looks expensive at $3.90.  But
> with takeover activity a possibility, maybe the high price is
> justified?
> ---------------------------------
> Message sent by Snoopy
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "You can tell me I'm wrong twice,
> but that still only makes me wrong once."
>
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>


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