FPA: Good Trading Opportunity?

[bongo66]

Seems to me that this stock could be ripe for those looking to pick up a quick 5-6% and then maybe holding until the profit annoucement and hoping it is a good one.

Im thinking about dropping 100K into this for 3-6 months.

Anyone out there looking to do similar or a derivation of same.

Thoughts and serious comment would be appreciated.

Spin cycle or will it comeout clean in the wash:D, Bongo

Bongo give us plenty of warning of your purchase so we have chance to sell or short.

[clearasmud]

Bongo,

The chart is looking good.
Just bought 6000 at 3.80
Very good punt I believe.

[Seti]

Just re-read the last half year which has rejuvenated my confidence. Special divy and good yield helps but barring sustained currency appreciation growth prospects, particularly international, IMO look excellent. Topped up another 10k.[^]

[neopole]

bongo
didnt realise you were a trader.
tax man will come a knocking.
as for the special divi, i have been thinking of purchacing an equivilent of 5% of my holding in FPA now and paying for it with the divi. this way i get free shares for the cost of the brokerage.
must say but, spending 100k on one stock is risky....is it borrowed money?
always thought you were a longterm investor, when or why did you change your plan?
you once told me " buy what you know, and stick to a plan"
has worked very well for me, and i also have a very spread portfolio.
3/4 of portfolio is growth or divi stock
1/4 is high risk
and in 3 years have only made 1 sale.
been green for a while and growing.
FPA is a fantastic stock with great future, but be carefull

cheers

[bongo66]

quote:Originally posted by neopole

bongo
didnt realise you were a trader.
tax man will come a knocking.
as for the special divi, i have been thinking of purchacing an equivilent of 5% of my holding in FPA now and paying for it with the divi. this way i get free shares for the cost of the brokerage.
must say but, spending 100k on one stock is risky....is it borrowed money?
always thought you were a longterm investor, when or why did you change your plan?
you once told me " buy what you know, and stick to a plan"
has worked very well for me, and i also have a very spread portfolio.
3/4 of portfolio is growth or divi stock
1/4 is high risk
and in 3 years have only made 1 sale.
been green for a while and growing.
FPA is a fantastic stock with great future, but be carefull

cheers




I am primarily long term but have done 2 very profitable "quick trades" over the last 5 years-hardly taxman stuff-and this opportunity looks ripe for the picking if and if the profit outlook is good, then the downside doesnt look too risky.

It is cash I will be using.

Enigma, do yourself a favour and make like the handle you use on this site. Im sick of your baiting.

B:)

[Gryffyn]

Bongo, Have also been looking at FPA and sister company as they fit my brief of proven management. Need to factor in state of dollar on earnings etc but long-term they're good but not sure about the quick bang approach. Gryf.

[bongo66]

quote:Originally posted by Gryffyn

Bongo, Have also been looking at FPA and sister company as they fit my brief of proven management. Need to factor in state of dollar on earnings etc but long-term they're good but not sure about the quick bang approach. Gryf.


Please elaborate on the quick bang approach Griff. Why not?

There is no such thing as a dumb question, only dumb answers:) Bongo

[Gryffyn]

Too true. I'm not a proficient TA guru - so not sure what trading opportunities are likely post-divvy. Share price will drop of course ex-div and the question is whether buying now on an unknown result and banking the divvy is worth the uncertainity in the short-term. You're factoring in (hopeful) good news to make this a sweet deal but the same could apply to many shares cum announcement. FPA is solid long-term I think but my speculative cash is in TWR at the moment (and loving it). I like your idea but I haven't looked hard enough to see if it's worth the risk and opportunity cost for me. Good luck if you go with it and I'm looking forward to replies to your post from the punters I follow (a bit).

[coge]

FPA is a proven quality, long term hold. Every time I try to do something clever, it tends to back-fire. So I'm suited to these kind of investments.

I think either way you can't lose, Bongo. Divs & results, you're not without a safety net, barring the unforseen.

[truedragon]

When is the record date for the special dividend for N.Z holders? I read the annoucement and it says the "record date" this on the 19th and an ex-div date on the 15 for the ASX 22nd for NZX?

So is it correct to intepret it as the ex div for ASX is on the 15th and hence record date on the 12th, and for N.Z is ex div on 22nd and record date on 19th?

If someone can clarify for me, it will be much appreciated? Why do they make the date different for ASX and NZX is beyond me, seems to created confusion. I am going to read the FAP report when I got sometime. Just started a new job in the IC/Semiconductor distribution biz and been really loaded with the learning curve in the new ind.[:o)]

DISC: Hold no FAP but the special divvy has got my definitive attention ;) Why the recent weakness though.... somebody bailing out in the know?? not trashing, just a slight concern. I think FPA is a good solid manufactuer in N.Z and the only manufactuer in N.Z that has any reputation in an international scale along with its sister company FPH really. But how it can really compete long term with company like cheap maker e.g. Haier and the like of LG, Sampo, Teco and another gazillion large conglomerate backed manufactuers including the US brand is a bit of a concern to me, but I guess I don't understand the appliance industry that well really.[8)]

[Phaedrus]

While it is true that FPA is in a long-term uptrend, for the last 6 months or so it has been in a $3.60 - $4.00 trading range, going nowhere. The end of last years steep uptrend was signalled by a trendline break in September. Trading ranges coming after an uptrend such as this are most commonly continuation patterns, in that the breakout is usually upwards, continuing the previous uptrend.
To my mind, this trading range is too narrow to trade profitably. Anyone keen on trying to do so could do worse than use the Relative Strength Indicator buy/sell signals as plotted at the top of the chart.
A must buy at over $4.00, a must Sell at less than $3.60, and a don't touch while it is tracking sideways. Unless you are particularly fond of divvies!

http://home.ripway.com/2003-11/39768/FPA001.gif

[CAM]

OK this could be a stupid question but if there are two record dates does it give you a chance to participate in the divi twice?....ie. buy on Aussie and then sell after record date of the 12th, then buy in NZ for the record date of the 19th????

I don't hold any FPA. Maybe the weakness is due hedging policy?? I am not sure how there hedging works or what they are hedged at.

[truedragon]

Cam, yes u can do that to get two divvy, get FPH:ASX on 12th record date, and sell it say on 15th but the price will drop most likly, get FPH:NZX on 19th or before and get another divvy.

[truedragon]

took a dive today @ 3.85, and not to blow my own horn, but god, it's good when u buy something and then it goes up straight away, that seems to has happened to me quite often lately, starting with TWR, then SKC and now FPA. I hope this dive is not going to be a nasty one, and can't wait to see how the market do tomorrow. Man I am good:D[:p][:o)]

[coge]

So, Bongo old boy, did you go with this sound & meritorious investment ? [8D]

-coge

[Taijon]

Buying for the dividend is all very well but when FPA goes ex div then what? What is likely in terms of the full year profit?

The half year profit announcement is revealing.

"The Company posted a Net Profit after taxation of $34.9 million for the half-year ended 30 September 2003, almost $1 million up on the 2002 first half.

Profit after taxation attributed to the Appliances and Finance businesses was $29.6 million compared to $29 million for the corresponding period last year.

The $5.3 million half-year dividend paid by Fisher & Paykel Healthcare
Corporation Limited, lifted the profit after taxation to the $34.9 million.

The Appliances business continues to dominate the results, reflecting the buoyant trading in the New Zealand and Australian markets, and the strong growth in market penetration in the United States of America."

FPH has now been sold and shareholders are getting a special dividend. However since the half year report competition for FPA's appliances has increased, new housing construction (and therefore purchase of appliances to be installed)are declining and the exchange rate for both $US and $A has moved further against the company.

I'm wondering why the company sold FPH right now rather than wait until year end. Are the year end profit results from the appliance division going to take a dive on year earlier figures?

[Seti]

quote:Originally posted by Taijon


I'm wondering why the company sold FPH right now rather than wait until year end. Are the year end profit results from the appliance division going to take a dive on year earlier figures?


I'm thinkin not...

FPA Announce Profit Upgrade.

The Directors of Fisher & Paykel Appliances Holdings Limited have upgraded the Company's forecast result for the year ending 31 March 2004 to between $80 million and $85 million after taxation. Previous guidance on the result had been for a similar performance to that of the $73.5 million last year.

Mr Gary Paykel, Executive Chairman, said, "The Appliances business has continued to perform solidly on the back of increased sales volumes. The recently purchased Farmers Finance business is also performing above initial expectations".

The Farmers Finance activity of Fisher & Paykel Finance is on target to contribute earnings before acquisition interest costs and tax of $9 million to $10 million in the five months following the purchase. Mr Alastair Macfarlane, Managing Director of Fisher & Paykel Finance, said, "The Farmers Finance sector of our business is performing well and profitability will be further enhanced after the business is fully integrated with our existing Finance operations". Following integration, the business is projecting to realise cost savings, from synergies in operations, in excess of $3 million per annum. These savings will be partially reflected in the 2004-05 financial year. The integration of the two companies is proceeding as planned.

Sales of Appliances are expected to exceed 1.15 million units in the current financial year, an increase of approximately 15% on last year. Mr John Bongard, Managing Director of Fisher & Paykel Appliances Limited said, "Sales in New Zealand and Australia have exceeded expectations and progress in the USA has continued strongly, providing good opportunities for growth. Our entire manufacturing system has responded well to increased production requirements. Capital expenditure is expected to be in line with forecast at $40 million to $45 million for the current financial year".

The Company will be announcing its result for the year ended 31 March 2004 on 20 May.

[clearasmud]

Thanks for your tip Bongo!
Am currently up 13% in 6 days.

[clearasmud]

This shares appears to have a value of about $5!
Profit up 15% while receiving about a calculated 84c per fpa share
for fph holding,third of which will be used in a share buyback.

[bongo66]

Its my time to gloat. Bought @ 3.85 and sold today @ 4.27 a tidy nearly 11k for a few days "work".

Hope you got some Enigma. I wont rub it in if you didnt.

Well done CAM.

Well done me, Bongo

[belgarion]

Bongo ... the taxman will be inquiring about your motives ....

[Just_roll_it]

Holy cow Batman! This has got to be a first! *I* buy a stock and an hour later a positive announcement comes out pushing the stock up 10%. I was looking at both FPA and SKC and couldn't make up my mind which one to invest in, both have good prospects and both have an up coming divi (not that I was buying for this). I finally chose FPA and look what happens. This is not normal, I am so used to the shares I buy heading south after I buy making me wait nervously for months before it rises to a point where I can make a profit. Now the problem is, I was buying FPA for the long term but should I take my quick 10% and be happy? Or will the rise continue tomorrow?

JRI.

[truedragon]

horray ;)
I am holing on my lot at the moment... the volume look strong, and I think Bongo.. u have moved a tad to early. I will say take the divvy, record date is on the 19th for 21 cent per share. The market condition continue to be good and with the final year annoucement coming up in May and the share buy back kicks in. The share bull its way to somewhere above 5 and consolidate etc etc. Then sell to take a 30% -60% profit include coming divvys:D[:p]

DISC: Hold FPA

[George]

The tax rule is quite clear. If you buy with the INTENTION of making a profit, any profits are taxable. The short time frame is also proof. But if the IRD haven't pounced in 5 years, why should they now. I don't believe, as some do, that they regularly investigate brokers' records for quick or regular traders.

[bongo66]

Oh , my intention was of course to hold long-term after collecting the DIV but goodness me things can change quickly in this fast paced world we live in...

B

[bongo66]

Belgarion, its only my 3rd quick trade in 5-6 years in the market so there is no fear of any walrus taxman.

And of cause i must reiterate it was my initial intention to hold long-term.

B

[bongo66]

I got out of this one a few weeks back @ 4.88 as I could see the increased costs having an affect on profit.

It was never a serious love affair for me anyway.

Having said that, their projection of 80M is not bad and it might be worth a punt at the 4.40 level as there has been good support there in the past.

Any short termers thinking about a play?

B

[coge]

So did anyone attend the meeting?

Did Mr Sheppard do his bit "to help the small shareholder"? Certainly seems to have done a 9/11 on the SP

So there should be a few traders lining up tomorrow morning.

[Seti]

Yeah, I turned up coqe. Sheppard did his best and rambled on for some time before Gary Paykel asked the audience whether they had had enough. A resounding "YES" filled the room.

Regarding the outlook for the year I see the forecast $80m as particulary conservative and the cynic in me suggests with the number of options given to senior management another profit upgrade early next year maybe one way of generating some momentum towards the strike price.

Last years record profit of $85m was achieved without the benefit of the Lowes Home Improvement deal with its 960 stores and another 140 planned for this year. Earnings from the Farmers Finance aquisition had a limited contribution and the new Smartdryer and updated Dishdrawer are yet to be released.

Even with signs of the Australian market weakening and material costs increasing if they can't post a next FY NPAT of at least $85m then I'll eat my hat (I reserve the right to cook and add flavouring as necessary).:D

Seti Give us some idea of the flavourings you will need probally A gallon of 42 Below as well to wash it down.

[Gryffyn]

From NZH

"The meeting passed resolutions altering the company's constitution - to match new stock exchange requirements - to increase directors' fees and to issue 300,000 share options to Bongard.

The chairman of the Shareholders' Association, Bruce Sheppard, opposed the option scheme and the constitution changes.

He said that option schemes diluted investors' holdings and other forms of remuneration were preferable. On the constitution, his main concern was that it was in danger of being turned into a mechanism out of the company's or shareholders' control, just being automatically updated to match stock exchange requirements.

He had no concerns with the company's performance, saying it was a grower of wealth led by a strong team.

[CAM]

Where is a likely bottom/support for this one?

Last one out gets to empty the dish drawer and iron and fold the washing.

[truedragon]

Just want to point out that the high N.Z dollar and weak USD could have a negative impact on FPA depending how they manage their exchange rate etc.

DISC: Hold no FPA

[Taijon]

I think this sell-off is an over-reaction and its time to top up. Must surely be close to the bottom. However at $4.16 and a total dividend of 20.3 cents, disregarding imputation credits, its only returning 4.9%.

FPA has always been conservative in its forecasts/announcements and I'd say $80 million is pretty much in the bag with a likely surprise on the upside.

What do others think?

[coge]

There hasn't been any bad news. The board, as Taijon said, have merely provided a conservative forecast. If anything it means there will be an upside.
This is a very different situation to say WHS or RBD.

This correction maybe due to the market having a built in price representing an expectation of future big gains. I feel some credit should go to Mr Sheppard as well.

Don't forget FPA are still a growing company.

[riskandreturn]

Truedragon - by my reckoning the fx effect is probably relatively neutral as probably similar proportion of costs and rev from US?

Definitely think the market has overreacted as last year's profit which is being compared to included $10m div.

It seems people are not comparing operating profits for the years which is the key to valuing the share price??

Agree that there's more likely upside than downside on the latest figures too.

What about the australia US free trade agreement. As at the moment Whirpool heavy duty washing machines are selling in Queensland at roughly 12% lower prices with better guarantees than normal F&P washing machines. So when the tarrifs come off in January what is going to happen to FPA sales Unless they cut prices Massively. My recomendation is sell and re evaluate next April at earliest

[kittydashwood]

What a big have. Depress the shareprice, shake out the mums and dads so the fat cats can get more, the option trigger price will be reached no doubt. Why else would the deal have been devised. The conservative forecast was calculated to have this effect. Even if the margin shrinks with the effects of the free trade deal, don't underestimate the impact the dishdraw is having in the US, part with the Jewish community. Nice and kosher for that New York apartment.

[quartzpurple]

Come on! ENIGMA, your recomendation worths nothing.

People who listen to you would be crazy. If I recalled correctly, you are the one who deemed TRH was worth only 30 cents. What a joker. People like you can never see the intrinsic value of a company.

How do you define better guarantee? You think all consumers who go out and buy appliance only care about guarantee? What about design and brand name? From my humble OPINION, FPA is not going to cut its price solely for the sake of winning market shares. It is trying to distance itself from those price-oriented manufacturers. Its US strategy clearly exemplifies that.

It is even more rediculous for you to advise people to wait until April. You can never see things with complete certainty. After events have been certain, most likely value is not there anymore.

My opinion to fellow trader is ingore ENIGMA and make up your own mind.

[Morch]

My wife an I went shopping for a new washing machine recently, we started to check out F&P as have been very happy with their products in the past, we then went to Noel L and viewed their range of alternatives. Well they look prehistoric and the sales person informed us the life expectancy of most of their machines is 7 - 8 years.

Well our old F&P is 12 years and still works find.

Conclusion F&P was the most expensive (but if it has an extra 4 + years life compared to the opposition, it certain isn’t) has an excellent tract record, looks modern, has a compact exterior and is NZ made.

Disclosure: never owned FPA

March if F & P machine lasted 12years for you the best of the others would probally last 20+ years the last F & P machine the wife and I owned was falling to bits in 4 years And I nkow of people that have had 4 main control timers in 4 years and as for their dishdrawer the useful life considering the one my son put in his new house is about 3 years after that the repair bills are astronomical. Especially considering they are about twice the price of most others.

Quartz Purple what was the lowest trading price of Trans Rail not far from that 30cents you sling off at and cosidering it was above $1.50 when I said it and most people were saying it was a buy at that price get your facts correct.

[KW]

My F&P washing machine (an original Gentle Annie) lasted 15 years, and god knows how many house removals - including 3 inter-city moves
and one international move, before giving up the ghost.
My new F&P is 3 years old, and has already been shifted house twice, and I havent had any problems with it.
Same goes for my F&P dryer, which must be at least 10 years old.

[CAM]

hmmm from what I have read so far it seems F&P need to do is work on there planned obsolescence....obviously their product is lasting too long in the market place and needs to wear out quicker so that replacement sales pick up. Or make the componentry more sensitive so that when a product is tilted beyond the 45 degree it malfunctions. The removal guys will get the blame.....bingo...more sales.

[nelehdine]

Traded dn to 405 today and my itchy finger hit the "buy" button at that level. At 405 this appears great value to me, nice dividend yield, one of NZ's most innovative and successful companies over the last decade with a great next 10yrs I would imagine.

I am building a new home early next year and it's going to be a case of which F&P model to install rather than what brand to install !!!

Disc: Bgt 2750 FPA today at 405 ( nice close at 410 !! )

[Mr_p_yu]

Oh nelehdumbdine,

Think its over-valued at the moment....By the way, I hope your new (crappy) house collapses on you! :)

Itchy finger, may be its itchy bum, dumb dine? Why don't you use your itchy finger to scratch your itchy bum! And keep your big mouth shut!

[skinny]

Get a grip Mr_p_yu. I've found Nele's calls to be pretty good actually over the past year (sell tay +3, buy FBU under $4, buy NOGOC @20c & sell @37? - hope I'm not getting you into trouble here Nele.)

Anyways, only concern I have about FPA is the revenue impact of a high and possibly going higher NZD/USD, but if you wait for this to correct it may be too late?

[Paper Tiger]

At 405 FPA is a good buy.
I considered buying some at 417 a couple of weeks ago, but decided that the price would come down further, for a change I was right, and I went and bought something else.
This is a company with good products, has a good yield and still has growth potential. OK so next year is ONLY going to be a bit better than the last.
OK course the SP may decline more in the short term, but I doubt that.

If I had any cents going spare at the moment I would be in.

[KJ]

Mr p yu-what's your problem? Recall you writing the same sort of tripe under PRG threads.

[Seti]

What a ridiculous outburst mr_f_yu. Rationing the anti-depressants are we?

Do you have a reasoned opinion on FPA or are just still bitter about Nele’s accurate call on the PRG black hole?

[nelehdine]

Give Mr p-yu some slack guys ... after all he's had most of his cash in PRG the last 12mths and while all of us have enjoyed good capital gains and nice divvies on the NZX he's been in a stock that has gone from $2 to $1.96 and hasn't paid a dividend since its inception ... it can't be easy admiting other people are right !! can it Mr p_yu ?? swallow your pride and sell those hopeless PRG things !!!! P L E A S E !!!

[clearasmud]

Accually Nele PRG probobly is a recovery story for risk-takers

[kittydashwood]

I think i'd rather have NLX than PRG. *



*wanton cross thread ramping in the style of the ATR gang:D

[nelehdine]

If you want to invest in UK reatil clearasmud why not buy some GBP with your strong NZD's and invest in one of the UK market leaders such as Selfridges,GUS, or Next rather than a bit part player like Powerhouse/PRG in the appliance market which of all the sectors in UK retail is probably the hardest market to make a buck .. oopps sorry ... pound !!

PRG is EXTREMELY risky ... steer clear unless you can afford to see your investment go to "0"

[hirzelz]

mr p yu it is so sad that on your post above details of your country of origion are included.
A sad example alright.

[Mr_p_yu]

And what are you going to do about it hirzelz and dumb dine, eh? Hey, if you don't like my country, I will either bomb or put so much trade restrictions on you that will make your head spin.

Uk retail market hard eh? Then don't count on F&P (f**k & pi**) to sell much of their junk in the UK!

By the way, has your house collapsed yet? :)

USA all the way!!!!!

[clearasmud]

Nele, right now I'm not interested in PRG or FPA.

[nelehdine]

unbeleivable ... that chip on your shoulder is about as big as Texas Mr P_yu !!

[nelehdine]

There you go Mr p-yu ... I've put a nice juicy bid into the PRG market , $1 for 2750 shares. You've got a chance to cut your losses , and by the way at present I'm the only one of us 6.5 billion human beings on this planet that wants to buya any PRG shares .... scary !!!

[Mr_p_yu]

Mr. dumb dine,

I thought you are a whale....obviously you are a small fish (they tend to get eaten up!). By the way, why don't you save the money and put a bid for FPA when they reach $1 per share when they are beaten up by overseas competitors and the local retailers give them the "middle" finger about their exclusive selling agreement! :)


Oh, how did you know I am from Texas? -scary!!!!

[nelehdine]

I guessed you had about the same IQ as George W and put 2 and 2 together !!

[riskandreturn]

Entertaining posts - I just hope p_yu you're around to eat your words when investors have become more rational towards FPA and trading at a tidy profit on current levels.

You strike me as the type to take off when the kitchen gets hot....

Good buying nelehdine - i bought a week or so ago and am putting an order in to pick up some more and lower the avg price...

[bongo66]

I agree with P U, FPA aint a good long-term buy considering all the low cost, superior tech, better manufactured stuff out there.

Ive seen those brands creep in slowly in NZ and it is going to hurt FPA eventually when the average kiwi/OZ wake up and realise they are beeing ripped off(will they? :)) and they are being sold shoddy old technology stuff.

Its a great trading stock at the mo but it looks like it could breach 4 bucks soon.

Im waiting.

B

[CAM]

I remember reading something awhile ago in unlimited magazine about their forex hedging running out soon as well....can't remember the piece or what it was exactly about sorry

[small fish]

My flatmate has worked in the engineering department and he said things were getting extremely competitive in australia where G.E. and Westinghouse were bringing in new models at the same prices as F & P's existing ones. i.e. a four star rated fridge at the same prices as F & P's two star. The team who does the re-fresh of the design are now having to be re-freshed again just to keep up.(The makeover work is having a new makeover already). He said that all Canterbury University students in his particular field were being offered jobs along with many others. Perhaps they feel they may be getting behind against the competition or are having to get on top of it before they do.

I too would like some of these but think there is enough downside to hold off. Lots competition, contracting margings and consumer spending on big ticket items will surely fall soon. The only upside I see is the deal with 'Lowes' and who knows how that will work out .

[Noddy]

Have been in the market for a dishwasher here in Melbourne. Price and feature wise the winner was Westinghouse. Store manager told us that Westinghouse had a new policy of price matching any import as they were not prepared to see any further reduction in market share.

Noddy Westinghouse brand is likely to disapear in Australia, maybe runout. The new owners in Australia of the Simpson & Westinghouse brands. Electrolux have made suggestions that they are thinking of consolidating all home appliances they make in Australia under there own brand Electrolux.

[PGL]

Getting very serious on this thread so, apologies if you've heard it before but..
Maybe FPA should have another crack at the South African Market.
Their last shipment there in the 1980s was turned back at customs because of the black agitators