Forum Archive Index - October 2003

["Morgy 40" <morgy40@hotmail.com>]

Cristine,

 I will post this chart as soon as I can , it is a classic bottom dweller,  while you may have some positive FA showing why you should buy in the chart tells why you should hold off, perhaps or not , can it get lower , lets see.

 

Regards

 

Morgy

>From: "Cristine Kerr"

>Reply-To: sharechat@sharechat.co.nz

>To:

>Subject: Re: [sharechat] DOW:ASX

>Date: Thu, 2 Oct 2003 14:36:23 +1000

>

>Is IPG on your chart and if so, how does it look?

> ----- Original Message -----

> From: Morgy 40

> To: sharechat@sharechat.co.nz

> 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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