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Thanks Morgy.
----- Original Message -----
Sent: Thursday, October 02, 2003 2:18
PM
Subject: [sharechat] DOW:ASX
Cristine & Shayne
DOW:ASX
It kept coming up on my recomendation lists from brokers ( circus
promoters) etc,so I added it to my watch list, numbers look good and
technically it is poised to breakout in the near term if it can break the
resistance at .87 cents. I will try to post a chart for it and you will be
able to see what I mean.
Regards
Morgy
>From: "Cristine Kerr"
>Reply-To: sharechat@sharechat.co.nz
>To:
>Subject: Re: [sharechat] Financial Statement Analysis - DOW
>Date: Thu, 2 Oct 2003 12:36:19 +1000
>
>Hi Shayne,
>
>First impressions of Downer EDI (ASX Code DOW)
>
>1) stayer - been around for a while - didn't review assets
>
>2) cashflow - good revenue, diversified income stream, margins
appear tight which places higher emphasis on maximising volume and minimizing
cost
>
>3) as a growth stock - forward order book appears healthy -
announcement 'reliable long-term income streams' seems credible on the surface
but without contract details (contingencies and time frames) cannot assess
>
>4) dividend - selling ex dividend at present - reasonable
return on stock price but there are better out there, eg; Downer EDI (DOW)
dividend 2.9 cents (only partially franked) and selling around 85 cents whilst
Cellnet (CLT) 7cents (fully franked at 30%) is selling around 86 cents
>
>NB This is just my own opinion, but the end of the day, I
believe a 'growth stock' should provide a good return on your investment. If a
company has a good income stream and are able to make reasonable profits they
should be sharing a good percentage of those profits with shareholders or
justifying holding on to most or all of it in retained profits, eg;
communicating plans for future growth that will necessitate investment
expenditure.
>
>5) healthy exec salaries - execs seem to be doing well from the
business even if shareholders aren't - wouldn't mind having one of those
positions!
>
>NB I'm all for execs being paid well, but it should be linked
to performance criteria (profit and dividends being just a couple of those)
not revenue performance alone
>
>6) Intangibles - would like to know what's been factored into
Goodwill - $345,706,000 and Intellectual Property - $34,701,000?
>
>7) Current interest bearing liabilities - $96,204,000?
>
>8) Prefer not to see unexplained entries in the millions, eg;
Current Payables, Other? - $31M
>
>9) Don't know their market or competition
>
>May very well grow but not my cup of tea based on the quick
review I did. (NB Keep my review in perspective - trading for just over two
months.)
>
>Regards,
>Cris
> ----- Original Message -----
> From: Shayne King
> To: sharechat@sharechat.co.nz
> Sent: Wednesday, October 01, 2003 3:22 PM
> Subject: Re: [sharechat] Financial Statement Analysis?
>
>
> I am currently interested in investing in Downer EDI. I have
obtained their
> financials and have yet to do any analysis on them yet. How
would you
> approach determining whether this company is worth investing
in taking into
> consideration their financials and charts? I have heard that
they may show
> quite alot of future promise, and one analyst recommends this
company as a
> speculative buy. I am interested in short term gains however
based on my
> conclusions in their financials, will be willing to be a long
term investor
> (growth buyer).
>
> regards
> shayne
>
>
> >From: "Cristine Kerr"
> >Reply-To: sharechat@sharechat.co.nz
> >To:
> >Subject: Re: [sharechat] Financial Statement Analysis?
> >Date: Wed, 1 Oct 2003 14:46:27 +1000
> >
> >Shayne,
> >
> >Thank you for your comments. Great (and fast) response
from David.
> >
> >I started to prepare a response but the more I wrote, the
more I realised
> >what was left out.
> >
> >There are so many variables I started to go down the path
of 'if this',
> >'then that'.
> >
> >The bottom line is, its all a bit of a formula of sorts
(in some ways
> >similar to creating formulas for an excel spreadsheet).
> >
> >The formula will be different dependent upon the
investment objective/s and
> >risk profile.
> >
> >Identifying your investment objective and risk profile
will help determine
> >the type/s of shares you will be comfortable investing in.
> >
> >With this in mind..
> >
> >What is your investment objective?
> >
> >What is your risk profile?
> >
> >This information will help sharechat contributors with
your question.
> >
> >Regards,
> >Cris
> >
> > ----- Original Message -----
> > From: david.gibson
> > To: sharechat@sharechat.co.nz
> > Sent: Wednesday, October 01, 2003 10:03 AM
> > Subject: RE: [sharechat] Financial Statement Analysis?
> >
> >
> > >My question to everybody is: When you see a company
that you are
> >interested
> > >in investing in, what is the most important analysis
that you do?
> >
> > 1) Cashflow
> >
> > For me - cashflow is the key. It is possible for a
company to be losing
> > money and still have good cashflow. It is also possible
for a company
> >to be
> > making money and have terrible cashflow. The cashflow
analysis is the
> >first
> > place I look in an annual report.
> >
> > If a company is generating cash - it becomes a candidate.
> >
> > 2) NTA
> >
> > The next factor is asset backing. This is more than NTA -
some
> >industries,
> > in long term structural decline, I would expect the price
to reflect a
> > significant discount to the NTA. On the other hand -
other industries
> >with
> > long term growth prospects, I would expect to pay a
premium. The
> >assessment
> > of NTA is mixed with a number of intangible factors.
> >
> > I will buy into declining industries if the NTA discount
is good enough.
> > I
> > will only buy growth prospects if the NTA premium is
acceptable.
> >
> > 3) Market Timing
> >
> > Interest rates are the single biggest factor, for me,
influencing market
> > timing. (I know this does not directly relate to your
question). Some
> > sectors are sensitive to interest rates (retail), some
are not
> >(utilities).
> >
> > Generally, if interest rates are trending down - with a
lag in timing -
> >I'm
> > buying. If interest rates are trending up - with a lag in
timing - I'm
> > selling.
> >
> >
> >
>
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