Tegel IPO

[hardt]

8836

Looks like the ol' poop and scoop... might be time to accumulate alongside the instos.

[JoeGrogan]

8836

Looks like the ol' poop and scoop... might be time to accumulate alongside the instos.

Tread carefully, the sell downs may not have stopped yet.

[hardt]

Tread carefully, the sell downs may not have stopped yet.

You would have to be daft to sell down in this range, lets see how it goes today and tomorrow... have an order at 106.

[winner69]

You would have to be daft to sell down in this range, lets see how it goes today and tomorrow... have an order at 106.

Sounds like you onto good thing hardt - but don't miss out on the cheap ones by waiting for your 106, it probably will never come

[percy]

Warning.
Standing in the path of a runaway freight train is dangerous..

[Balance]

Sounds like you onto good thing hardt - but don't miss out on the cheap ones by waiting for your 106, it probably will never come

Indeed W69.

Very very successful old timer who managed a charitable trust from home office and turned $450,000 into over $5m in 10 years had this advice for some of us rookies years ago :

"If it is good enough to buy at $2.00, it is good enough to buy at $2.05. You are not investing for 1 or 2 % return. Playing for nickel and dime never made any real returns."

So good enough to buy at $1.06, good enough to buy at $1.07.

TGH - strictly for the plucky birds though as far as this 'plucked' observer is concerned!

[hardt]

There's a queue of 100k at 106... so I bumped it to 107 [small order]

[bottomfeeder]

That queue at 1.06, can disappear immediately; Ive seen that happen many times before. Either a desperate selller, withdrawl or re queue at a lower price. I have dropped my purchase from $1-06 to $1-04. I dont really want to buy any more, as this is starting to look like a gamble. However if it gets to $1-04, I'll take them. I think that they will write off a large lump of Goodwill at the next result. Its funny when a company is doing well, they either bump up the goodwill or do not write off any because they think its justified. When results are poorer, the goodwill is certainly over stated, and they write off a lump. It really should be the other way around. When the times are good, start amortising the goodwill, it makes the net result look a little poorer, but more realistic. So my crystal ball says that the company will be making a much lower profit after extraordinary items. After all the market has written off a lot of goodwill over book value already. Just what it will do to the shareprice who knows, realistically it shouldnt affect it, but there will always be those that see a low profit and will demand SELL SELL SELL.

[Beagle]

Warning.
Standing in the path of a runaway freight train is dangerous..

I'm with Percy on this one. Some of you good folks that have recently joined ST might benefit from having a good read of this thread.
http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits

[RGR367]

I'm with Percy on this one. Some of you good folks that have recently joined ST might benefit from having a good read of this thread.
http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits

With all those stuff to remember and without even a way of just being 50% sure, I'll just rely on gut feel to say that $1.08 is a nice price to get some more :) Or maybe I just love chicken.

[biker]

If there is no downgrade and the Chairman's exit is not related to company performance, current levels around 1.08 may turn out to be good value.......

[bottomfeeder]

Or if there is a downgrade and the exit is related to company performance, then 1-08 may be a little high. Gambling is not investing.

[silverblizzard888]

If there is no downgrade and the Chairman's exit is not related to company performance, current levels around 1.08 may turn out to be good value.......

It's all related.

#toooptimistic

[hardt]

As poultry prices pick up again, assuming volume growth in the domestic/export market remain, a profit warning is not coming.

I believe they already factored in possible weakness when they left a huge 20% spread in their forecast[ NPAT 33M-41M ]

- Lowest end would give us earnings of 9-10cps [ p/e 10-12 ]
- Highest end would give us earnings of 11-12cps [ p/e 9-10 ]
- Profit falling 10% [ 28M-29M ] gives us 8-9cps [ p/e 12-13 ]

Whichever way I look at it, 107 is undervalued... unless the company falls apart, I am not worried about my 107 holding..

[JoeGrogan]

As poultry prices pick up again, assuming volume growth in the domestic/export market remain, a profit warning is not coming.

I believe they already factored in possible weakness when they left a huge 20% spread in their forecast[ NPAT 33M-41M ]

- Lowest end would give us earnings of 9-10cps [ p/e 10-12 ]
- Highest end would give us earnings of 11-12cps [ p/e 9-10 ]
- Profit falling 10% [ 28M-29M ] gives us 8-9cps [ p/e 12-13 ]

Whichever way I look at it, 107 is undervalued... unless the company falls apart, I am not worried about my 107 holding..

Totally agree its a solid long term investment. A profit downgrade is pure speculation at the moment, however, everyone here seems to be convinced that its a sure thing. Must be those (understandably so) still bitter from the IPO.

Disc: Not holding but watching for an opportunity.

[biker]

.... Gambling is not investing.

Totally agree but stating the obvious and not applicable to TGH

[hardt]

Totally agree its a solid long term investment. A profit downgrade is pure speculation at the moment, however, everyone here seems to be convinced that its a sure thing. Must be those (understandably so) still bitter from the IPO.

Disc: Not holding but watching for an opportunity.

I can understand the reservations some have, I don't understand claims being made purely on speculation rather than facts.

I tend to keep away from emotions and speculation - I have missed out on huge profits thanks to a few nightmarish scenarios playing out in my head.

There are known knowns
There are known unknowns
There are unknown unknowns

[Joshuatree]

Like on H/C but less so i hope;there will be people on S/T aiming to buy (so trolling it down ,"sell this dog" and vice versa, pumping it up "all aboard toot toot" ( and selling out).

[Baa_Baa]

Totally agree but stating the obvious and not applicable to TGH

It is a gamble, buying in here, pure and simple. Buying any share that is in a sustained downtrend for whatever reason is a gamble. TGH is in a sustained downtrend.

Best maybe to patiently wait for a return to an uptrend, no one really knows how long this capital value carnage will go on for. It's folly to deny the market trend and equal folly to try and pick a bottom SP.

Just wait, it's better to leave a few $ on the table and enter into an uptrend, than waste time and money on guessing where a SP will eventually bottom out at.

Jmho
BAA

[hardt]

Like on H/C but less so i hope;there will be people on S/T aiming to buy (so trolling it down ,"sell this dog" and vice versa, pumping it up "all aboard toot toot" ( and selling out).

I doubt a few forum posts will even tickle market volumes.

All they ever talk about on hotcopper are penny stocks... 99% of posts there are pure unsubstantiated garbage...

[couta1]

I doubt a few forum posts will even tickle market volumes.

All they ever talk about on hotcopper are penny stocks... 99% of posts there are pure unsubstantiated garbage... Agree, I used to read the A2 thread a while ago, but that place really is Troll City.

[hardt]

It is a gamble, buying in here, pure and simple. Buying any share that is in a sustained downtrend for whatever reason is a gamble. TGH is in a sustained downtrend.

Best maybe to patiently wait for a return to an uptrend, no one really knows how long this capital value carnage will go on for. It's folly to deny the market trend and equal folly to try and pick a bottom SP.

Just wait, it's better to leave a few $ on the table and enter into an uptrend, than waste time and money on guessing where a SP will eventually bottom out at.

Jmho
BAA

Instead of understanding fundamentally why a stock has any sort of pattern going for it at all, we use the SP as a distinguishing factor to predict what tomorrow will look like...

[Joshuatree]

There are some fantastic authentic posters on H/C. 5 or 6 of them i keep in regular email contact with and have had some great trades due to their nous. Others like the retired young portfolio investment manager who trashes brokers reccos ; is without peer in the premium stock sector; brilliant. Just like on here you have to sort out the genuine from the not and not be influenced.

[hardt]

Tegel SP was in a gully of support around 113-114 range, F/A was looking good then, sure as hell looks good now...

The closer we get to June without word from the company, the more likely we will see this current speculation subside and simple fundamentals taking over leading up to the report - no news is good news.

I think we will see that gap above 110-114 filled over the next couple of weeks [ if fundamentals remain ] - Poop and scoop will be apparent soon enough.

[BlackCross]

"US Chicken Spot Price is at a current level of 1.240, up from 1.144 last month and up from 1.116 one year ago. This is a change of 8.39% from last month and 11.11% from one year ago"

That's from the IMF's primary commodity prices report (April 17). How relevant it is to Aus/NZ I'm unsure but I've decided to continue to hold and may even increase my holding.

[hardt]

Having a look around SharedClarity lately, their analysis is so thorough and without rhetoric, found it quite refreshing from the rest.

Their Tegel model is a wee bit more optimistic than mine, Thought I would put them to the test here, lets see how close they come to the June result.

SUMMARY BALANCE SHEET (NZDm)




FY15A
FY16A
FY17F
FY18F
FY19F


Cash & working capital
145.3
164.8
165.0
172.6
185.5


Fixed & intangible assets
507.3
518.3
527.5
536.1
554.9


Total assets
658.3
695.6
705.1
721.4
753.1


Debt
268.5
253.0
91.1
87.8
94.7


Creditors
76.9
103.7
95.6
101.7
111.8


Total liabilities
369.8
381.8
211.7
214.5
231.6


Shareholders' equity
288.5
313.9
493.4
506.9
521.4


ROCE
7.3%
9.6%
10.3%
10.7%
11.2%


WC to revenue
10.0%
9.8%
10.6%
10.2%
10.5%


Debt to capital
47.1%
44.2%
15.0%
14.2%
15.4%


Interest cover
1.8x
2.7x
8.2x
24.1x
24.7x



SUMMARY INCOME STATEMENT (NZDm)




FY15A
FY16A
FY17F
FY18F
FY19F


Revenue
562.7
582.9
618.6
654.6
703.3


Revenue growth
8.8%
3.6%
6.1%
5.8%
7.4%


EBITDA
61.3
75.5
81.5
85.3
90.9


EBITDA margin
10.9%
12.9%
13.2%
13.0%
12.9%


Normalised NPAT
5.5
23.7
37.8
44.9
48.5


EPS
-
6.7c
10.6c
12.6c
13.6c


NPAT
8.7
11.4
37.8
44.9
48.5



However great it would be, I am not so sure NPAT of 37.8 will be achieved - was thinking bottom end of guidance 33-35.

Seeing as I hold TGH - confirmation bias is a dangerous thing...

Looking forward to revisit come late June!

[Beagle]

I'm still expecting a downgrade. Won't surprise me in the slightest if they struggle to make $30m.

[Arbroath]

Agree. But it's like looking in the rear view mirror as chicken pricing was at 10 year lows for the just completed year. What matters is how pricing behaves in the next few months and if management can re-establish their credibility and ideally provide an explanation for the Chairmans departure. It is very poor that the NZX allow such a departure without a clear explanation. Also poor on the ex-Chairmans behalf. He would no doubt say his actions did the talking but it could be a material profit downgrade / goodwill write off dispute or just a personality clash with the major shareholder etc. All that aside I think at this price there is a lot of negativity built in to the price and investing is all about the price paid.

[JeremyALD]

I'm still expecting a downgrade. Won't surprise me in the slightest if they struggle to make $30m.

Do they have to do a downgrade annoucement before the annual result, or could they put the downgrade in the result announcement? I'm not sure how the disclosure rules work. Let's say they make 30 million profit, would they need to disclose that prior to the annual result? Surely they know at this point if they aren't tracking to forcast.

[JoeGrogan]

Do they have to do a downgrade annoucement before the annual result, or could they put the downgrade in the result announcement? I'm not sure how the disclosure rules work. Let's say they make 30 million profit, would they need to disclose that prior to the annual result? Surely they know at this point if they aren't tracking to forcast.

As per the Market Listing Rules they have a duty to disclose information that could have a material effect on the share price. A change to a company's forecast is considered likely to be material. Therefore, they would have to disclose it if they "knew" that they were going to miss the forecast. Moreover, it is probable that management already know whether the wide guidance will be achieved or not. In my opinion if a downgrade is coming it will be sooner (before the end of may) rather than just before their results announcement date.

https://nzx.com/files/static/cms-documents//Guidance%20Note%20-%20Continuous%20Disclosure%20with%20Consensus%20ch anges%20-%20formatted%20170505%20clean.pdf

[silverblizzard888]

Do they have to do a downgrade annoucement before the annual result, or could they put the downgrade in the result announcement? I'm not sure how the disclosure rules work. Let's say they make 30 million profit, would they need to disclose that prior to the annual result? Surely they know at this point if they aren't tracking to forcast.

Usual case is when something is off by about 10% or more its considered material enough to make a disclosure immediately the minute they know of it. By not disclosing once known, then they are in breach of listing rules. Though it doesn't need to be 10%, but its a rough guideline, usually what a reasonable person would expect to know, it should be considered more than minor.

[JeremyALD]

Thanks guys makes sense. Given their forcast was so wide it would be really quite embarrassing if they didn't make it

[hardt]

I'm still expecting a downgrade. Won't surprise me in the slightest if they struggle to make $30m.

What new information do you have on their performance this half or is this just a hunch?

Macros support the theory of a solid result being on its way in June.

Don't mistake my demeanour for anything other than curiosity.

[hardt]

https://www.imf.org/external/np/res/commod/External_Data.xls

I guess people didn't believe the board when they claimed poultry prices were in the dumpster during 2016FY...

Now coming into 2017, over 3 quarters in and poultry spot has risen from NZ153 - NZ190 = +25% :t_up:




PPOULT - US

PPOULT - NZ

USD/NZD FX RATE



2016Aug

111.04

153.16

1.3793



2016Sep

110.34

151.43

1.3724



2016Oct

110.15

154.03

1.3984



2016Nov

110.19

155.57

1.4118



2016Dec

113.01

162.67

1.4394



2017Jan

114.48

156.57

1.3677



2017Feb

114.36

158.96

1.3904



2017Mar

123.95

179.73

1.4271



2017Apr

130.70

190.31

1.4561

[winner69]

https://www.imf.org/external/np/res/commod/External_Data.xls

I guess people didn't believe the board when they claimed poultry prices were in the dumpster during 2016FY...

Now coming into 2017, over 3 quarters in and poultry spot has risen from NZ153 - NZ190 = +25% :t_up:




PPOULT - US

PPOULT - NZ

USD/NZD FX RATE



2016Aug

111.04

153.16

1.3793



2016Sep

110.34

151.43

1.3724



2016Oct

110.15

154.03

1.3984



2016Nov

110.19

155.57

1.4118



2016Dec

113.01

162.67

1.4394



2017Jan

114.48

156.57

1.3677



2017Feb

114.36

158.96

1.3904



2017Mar

123.95

179.73

1.4271



2017Apr

130.70

190.31

1.4561




How does that relate to domestic NZ prices ......or what Tegel are getting

Just curious

[hardt]

How does that relate to domestic NZ prices ......or what Tegel are getting

Just curious

Should have clarified exclusive to export prices, there is no source [ that I know of ] that would indicate domestic prices here.

I would think for the most part, when the standard global spot price of a commodity goes up, possibly to a lesser extent AU/NZ would follow...

[Balance]

https://www.imf.org/external/np/res/commod/External_Data.xls

I guess people didn't believe the board when they claimed poultry prices were in the dumpster during 2016FY...

Now coming into 2017, over 3 quarters in and poultry spot has risen from NZ153 - NZ190 = +25% :t_up:



Good work, Hardt but I do not think that NZ poultry price trend reflects the US spot price trend.

According to Stats NZ, government food price data for March 2017 showed chicken prices fell 6.5 percent for the year.

US poultry price actually rose 8.39% over the same period - in NZ$, price was up 5.6% (NZ$ actually strengthened from .6730 in April 2016 to .7083 in March 2017).

As usual, demand and supply are the over-riding factors when it comes to setting domestic prices.

[winner69]

Good work, Hardt but I do not think that NZ poultry price trend reflects the US spot price trend.

According to Stats NZ, government food price data for March 2017 showed chicken prices fell 6.5 percent for the year.

US poultry price actually rose 8.39% over the same period - in NZ$, price was up 5.6%.

As usual, demand and supply are the over-riding factors when it comes to setting domestic prices.

Jeez - chicken prices down 6.5% (at retail?)

Possible that the supermarkets have reduced margins and Tegel stil doing OK?

[Balance]

Jeez - chicken prices down 6.5% (at retail?)

Possible that the supermarkets have reduced margins and Tegel stil doing OK?

TGH's half year results acknowledged decline in margins and drop in prices.

"Expecting recovery in the second half however".

Personal observation says that chicken prices have not recovered - still plenty of discounting going on, especially for drumsticks and now, chicken nibbles.

[Joshuatree]

Did i dream it or did i hear rumour they've selectively bred hens that have 3 or 4 drumsticks now; that would partially explain the glut?

[sb9]

Did i dream it or did i hear rumour they've selectively bred hens that have 3 or 4 drumsticks now; that would partially explain the glut?

:lol::lol::lol:

[Joshuatree]

Yeah and the first three legged hen they bred they named Jake The Peg diddleleg diddleleg

[Xerof]

The chicken farmer who pioneered breeding 3 legged chickens was asked if the taste was any different from those with only 2 legs:

"I don't know, they run so bloody fast I've never been able to catch them"

[BlackCross]

Thought I'd try to check the short positions on Tegel but I can't find any reporting of shorts on the NZX However found reported shorts on Tegle on the ASX (tgh.asx) of 0.01% which is pretty low (Inghams at 3.4% for instance). Perhaps not significant except that at least no one's shorting the crap out of them (in Aussie anyway).

Decided I might as well hold fire on any purchase until either a: Next leg down or b: Decent results and moving up (or c: don't bother and buy a new car instead).

[bottomfeeder]

I shouldn't break the news, but it will be out shortly anyway. Tegel has announced it has pioneered the genetic mutation of an eight legged chicken, and it expects its profits will increase fourfold over the coming years. Director has resigned because he felt sorry for the poor chickens. I have just raised a mortgage on my house and will be going all in shortly. Could be true?

8846

I hope you can access the photo, as otherwise this post just sounds stupid.

[Balance]

I shouldn't break the news, but it will be out shortly anyway. Tegel has announced it has pioneered the genetic mutation of an eight legged chicken, and it expects its profits will increase fourfold over the coming years. Director has resigned because he felt sorry for the poor chickens. I have just raised a mortgage on my house and will be going all in shortly. Could be true?




Haha - try chickens with 8 breasts, akin to sow with ten tits! Chicken breasts are the most valuable parts of a chicken, not drum sticks!

Looking forward to Tegel's innovative mutation program in action.

But again, that will spell the end of Tegel? Imagine Inghams advertising their wholesome 2 legged single breasts vs Tegel's 8 legged breasted chickens!

[bottomfeeder]

Even fake news seems to bounce the shareprice, a bit of a slight move, maybe it is true? A self fulfilling prophecy maybe. SP up 2 cents today.

[JeremyALD]

I've been thinking a little more about this one. Surely Affinity won't be happy with this performance given they still hold 45%. I can't imagine them wanting to cut their losses and sell the rest at say $1 a share. I'll be very interested to see what they do after the annual results are announced! Also my predicted NPAT is 34 million so I think the share price is about fair. Will be interested to see what the final dividend payment is, perhaps another 4 cents?

[hardt]

I've been thinking a little more about this one. Surely Affinity won't be happy with this performance given they still hold 45%. I can't imagine them wanting to cut their losses and sell the rest at say $1 a share. I'll be very interested to see what they do after the annual results are announced! Also my predicted NPAT is 34 million so I think the share price is about fair. Will be interested to see what the final dividend payment is, perhaps another 4 cents?

About 100million+ shares in Escrow, no matter how solid the result in June is - they could spook the market with a few big sells.

Given Affinity paid $600M for Tegel in 2011, if the report and outlook is strong I do not see why they would dump at the lowest point of the company...

[sb9]

Was doing some shopping last nite at local Countdown, noticed plenty of Tegel products on sale. One that caught my eye was frozen chicken (think 10 size) for $5 each, also frozen nuggets, fresh chicken sausages and other frozen chicken cuts.

Did my bit by buying few of those to help the company out.

Not yet convinced to buy their shares though :p

[Balance]

NBR headline article today (behind paywall) - "Tegel Too Chicken To Tell The Truth".

[BlackCross]

NBR headline article today (behind paywall) - "Tegel Too Chicken To Tell The Truth".

"The sudden exit of the poultry producer’s chairman demands explanation......"

Is the basis of the article.

[hardt]

"The sudden exit of the poultry producer’s chairman demands explanation......"

Is the basis of the article.

Essentially was the same article that was written on the day of the departure...

[Balance]

Essentially was the same article that was written on the day of the departure...

Knowing Tim Hunter (one of the very few reputable tenacious financial investigative journalists left in NZ), he would have followed through with some hard questions to Tegel and received bugger all clarifications - hence the headlines.

Pretty damning for a company which has already failed to meet prospectus forecast not to be willing or able to answer questions from a journalist.

BTW - just saw drumsticks on sale at Mad Butcher for $2.99 kg (today only).

[blackcap]

Knowing Tim Hunter (one of the very few reputable tenacious financial investigative journalists left in NZ), he would have followed through with some hard questions to Tegel and received bugger all clarifications - hence the headlines.

Pretty damning for a company which has already failed to meet prospectus forecast not to be willing or able to answer questions from a journalist.

BTW - just saw drumsticks on sale at Mad Butcher for $2.99 kg (today only).

What I got from the article was that the major shareholder probably had a disagreement with the chairman (inference is that the chairman would not budge on position of coy and shareholders would not be happy with that because they may want to exit) All conjecture though but my partner knows James in a personal capacity and she said he does not take crap lying down. So probably what Hunter was inferring that there was a disagreement between chairman and 45% shareholder where it became untenable for chairman to continue. What does that mean for up and coming result one wonders?

[Balance]

I've been thinking a little more about this one. Surely Affinity won't be happy with this performance given they still hold 45%. I can't imagine them wanting to cut their losses and sell the rest at say $1 a share. I'll be very interested to see what they do after the annual results are announced! Also my predicted NPAT is 34 million so I think the share price is about fair. Will be interested to see what the final dividend payment is, perhaps another 4 cents?

Why wouldn't Affinity be happy?

They managed to hoodwink the market into paying what has turned out to be a very high price for 55% of the company?

IPO valuation of $551m for a company which is going to report a profit of $34m - PER of 16.2X?

The bloody cheek is the IPO price range of $1.55 to $2.50!

The $2.50 would have given TGH a valuation of $889m at $2.50 - PER of 21.7 times to 28.6 times on their downgraded forecast!

Turns out those who warned against the Private Equity sell down were right all along.

[blackcap]

Certainly does not say a lot about minorities being protected by a Board from yet another PE fund trying to get out?

It may not, although the independents here have a responsibility. I think James was in a position where he could do nothing else but resign.

[biker]

Knowing Tim Hunter (one of the very few reputable tenacious financial investigative journalists left in NZ), he would have followed through with some hard questions to Tegel and received bugger all clarifications - hence the headlines.

Pretty damning for a company which has already failed to meet prospectus forecast not to be willing or able to answer questions from a journalist.

BTW - just saw drumsticks on sale at Mad Butcher for $2.99 kg (today only).

Totally disagree with your view on Tim Hunter. He wrote a scathing article on RBC and Luke Moriarty at the time of the verdict of the staff suing Arborgen case.
The unfounded case was basically thrown out on appeal.
Nothing from Tim Hunter when that was announced because it directly contradicted his view.
I suggest he may be going off half c o c k e d here also.
I certainly wouldn't put any value on his sensationalist articles.
All of the above is opinion only.

[JeremyALD]

Well personally I think if they weren't going to hit forcast there would of been an annoucement by now. The financial year ended 30 April so they would have a fair idea by now. I still don't understand how there range was so wide but it's almost definite they are going to come in at the bottom end of guidance. Where to next year though? Who knows, but at around $1 you do start to see some value so long as there aren't more things Tegel is hiding.

I think the IPO was a bit of a sham but at the same time I still think Tegel is a fairly quality business that can turn it around in the next few years. It would probably be better if Affinity sold out in some ways so they can rebuild from scratch and have fresh leadership. I disagree that Affinity would of expected this SP performance in the IPO listing. At the end of the day they still hold 45% and do have to consider brand damage by a failed IPO.

[Balance]

Totally disagree with your view on Tim Hunter. He wrote a scathing article on RBC and Luke Moriarty at the time of the verdict of the staff suing Arborgen case.
The unfounded case was basically thrown out on appeal.
Nothing from Tim Hunter when that was announced because it directly contradicted his view.
I suggest he may be going off half c o c k e d here also.
I certainly wouldn't put any value on his sensationalist articles.
All of the above is opinion only.

I have followed Tim's articles over the years - all the way from Sunday Star Times to NBR - he has certainly saved me a few bobs over the years either from investing in or getting out of companies with questionable management.

Prefer myself to have a journo tackle management and companies on the hard issues rather than the mind numbing regurgitation of PR press releases masquerading as 'news' and investigative news. Tim is bound to get a few wrong there and then - goes with the territory.

[Balance]

Well personally I think if they weren't going to hit forcast there would of been an annoucement by now. The financial year ended 30 April so they would have a fair idea by now. I still don't understand how there range was so wide but it's almost definite they are going to come in at the bottom end of guidance. Where to next year though? Who knows, but at around $1 you do start to see some value so long as there aren't more things Tegel is hiding.

I think the IPO was a bit of a sham but at the same time I still think Tegel is a fairly quality business that can turn it around in the next few years. It would probably be better if Affinity sold out in some ways so they can rebuild from scratch and have fresh leadership. I disagree that Affinity would of expected this SP performance in the IPO listing. At the end of the day they still hold 45% and do have to consider brand damage by a failed IPO.

Compare and contrast with Ingham - ING has announced they expect to meet prospectus forecast so stock is on PER of 12 times.

Given TGH's track record, it deserves to trade at at least a 20% discount to ING.

TGH at $1.07 has a market cap of $380m. Market is telling you to expect a profit of less than $30m.

[hardt]

Compare and contrast with Ingham - ING has announced they expect to meet prospectus forecast so stock is on PER of 12 times.

Given TGH's track record, it deserves to trade at at least a 20% discount to ING.

TGH at $1.07 has a market cap of $380m. Market is telling you to expect a profit of less than $30m.

Dumbfounded forecasting is the reason TGH has been dragged through the mud by investors...

ING had conservative forecasts that were not likely to be missed, TGH was plumped up as a high growth option for investors... right now TGH is undervalued given where it should be if forecasts are met - one month till we find out.

[Xerof]

Ogden most likely went due to disagreement over a strategic direction the PE guys want to take (most likely stuff them with debt, and up the divi's) ((thats the company not the chickens))

If thats the case, then the next chair will have room up the back of his suit jacket for a large manipulative hand and will most likely do as he is asked

JMO, but somewhere between the truth and fake news

[bottomfeeder]

Who needs an independent director who resigns at first sign of trouble. He should have stuck with it and did his job.

[Baa_Baa]

Who needs an independent director who resigns at first sign of trouble. He should have stuck with it and did his job.

Some Directors are smart enough to see the sh1t before it hits the fan, and given the liability of Director's, the smart ones get the heck out well before the calamity. Not saying that is the case here, just something to consider. Could be any number of reasons.

[percy]

Who needs an independent director who resigns at first sign of trouble. He should have stuck with it and did his job.

Not so.
The only course of action an honourable man has, when he disagrees with the major shareholder [if this is the case], is to resign.
It sends a very clear message/warning to shareholders.
This, coming on top of them not meeting their own forecasts,rings big warning bells to me.
I like compnies that do as they say they will.
Yes I sold out on the first broken forecast,and will avoid them until they can prove they are worthy of reconsideration.I have a very long memory.

[blackcap]

Who needs an independent director who resigns at first sign of trouble. He should have stuck with it and did his job.

His obligation is to the company and not the shareholders. If he was put in an untenable position by the other directors (ie they could not agree to a course of action) then what was he supposed to have done? He cannot really "stick with it and do his job" because his job is not able to be done. Sort of caught between a rock and a hard place. Go public is not an option either as that does not help the company, you cannot force other directors to do as you want, so as Percy says, there is no other action but to resign, and this should be enough warning to shareholders without actually coming out and saying that things are not as they should be.

[Balance]

Dumbfounded forecasting is the reason TGH has been dragged through the mud by investors...

ING had conservative forecasts that were not likely to be missed, TGH was plumped up as a high growth option for investors... right now TGH is undervalued given where it should be if forecasts are met - one month till we find out.


Not dumbfounded - deliberately bullish and very high, to try and extract the highest price possible from the IPO. There can be no other conclusion to be drawn from the severe profit downgrade 6 months after the IPO.

Note that most of the proceeds were used to repay the redeemable shares of the vendors?

And there in lies the big difference between Ingham and Tegel - one with 'conservative' forecasts to give the company a strong share market foundation and positive sentiment, the other with what has turned out to be wildly bullish 'high growth' forecasts to extract the highest price from the market.

One is listed on ASX and the other NZX - says a lot?

[hardt]

Not dumbfounded - deliberately bullish and very high, to try and extract the highest price possible from the IPO. There can be no other conclusion to be drawn from the severe profit downgrade 6 months after the IPO.

Note that most of the proceeds were used to repay the redeemable shares of the vendors?

And there in lies the big difference between Ingham and Tegel - one with 'conservative' forecasts to give the company a strong share market foundation and positive sentiment, the other with what has turned out to be wildly bullish 'high growth' forecasts to extract the highest price from the market.

One is listed on ASX and the other NZX - says a lot?

TGH was sold as a high growth stock... turned out to be a low/mid growth stock... is now being treated like a negative growth stock...

Underlying EBITDA did meet the forecasted $75M for 2016... how they got the rest of it so wrong raises a few suspicions for sure.

[bottomfeeder]

His obligation is to the company and not the shareholders. If he was put in an untenable position by the other directors (ie they could not agree to a course of action) then what was he supposed to have done? He cannot really "stick with it and do his job" because his job is not able to be done. Sort of caught between a rock and a hard place. Go public is not an option either as that does not help the company, you cannot force other directors to do as you want, so as Percy says, there is no other action but to resign, and this should be enough warning to shareholders without actually coming out and saying that things are not as they should be.

As chairman he had some more power to make things right. He took the easy way out.

[percy]

As chairman he had some more power to make things right. He took the easy way out.

Not so.
A lesser man would have stayed.

[blackcap]

As chairman he had some more power to make things right. He took the easy way out.

Pray tell me what was he to do?

[Balance]

Pray tell me what was he to do?

I think bottomfeeder wants James to restore the sp back to at least IPO level? :D

[Balance]

For a good laugh - from comments in NBR a few months ago :

"It is a foul thing to commit to these strutting bantam roosters and their crowing claims of endless growth, a great turnaround story and a steady stream of profits making retail investors rich.

What do they take us for, a pack of silly old chooks? Most of us know that private equity isn’t there to make retail investors rich, retail investors are there to make private equity rich! Of course they will argue that to make an omelette from time to time you will need to break a few eggs, but the smart money knows to never put all your investment eggs into the one basket, and certainly not a private equity basket at that, for that is the quickest way for the chickens to come home to roost and a fox to be put among the hen house of poor investment returns. Sooner or later egg will end up on the retail investor’s face.

And look at Tegal and Inghams, both companies have now being left to play chicken with each other rather than delivering tasty nuggets to their investors. I think it’s getting to the stage where private equity needs to be told to scramble."

[iceman]

This really sums it up Balance. We have had far too many private equity lead IPOs in recent years that turn out bad for retail investors. I simply don´t touch any of these IPOs from private equity and while I realise I may lose out on some good opprtunities, I have no intention of changing that rule of mine. I don´t trust any of them and their pre IPO forecasts and commentary. Tegel is yet another good example and reminder.

[trader_jackson]

This really sums it up Balance. We have had far too many private equity lead IPOs in recent years that turn out bad for retail investors. I simply don´t touch any of these IPOs from private equity and while I realise I may lose out on some good opprtunities, I have no intention of changing that rule of mine. I don´t trust any of them and their pre IPO forecasts and commentary. Tegel is yet another good example and reminder.

Wasn't Summerset sold off by Quadrant Private Equity at $1.40 a share 6 ish years ago? (owned 97% of Summerset, sold 30%, had 56% in escrow at listing)
Huge under performer all PE IPO's eh...

[Beagle]

There's an exception to every rule TJ but by and large I think what Balance and Iceman have posted above hits the nail squarely on the head !

[iceman]

Wasn't Summerset sold off by Quadrant Private Equity at $1.40 a share 6 ish years ago? (owned 97% of Summerset, sold 30%, had 56% in escrow at listing)
Huge under performer all PE IPO's eh...

As I said in my earlier post TJ " I realise I may lose out on some good opportunities¨. Nobody is saying they are all bad investments. SUM is currently one of my biggest holdings. But I simply don´t buy into private equity IPOs these days and happy to wait for the companies to get some runs on the board before I invest in them. In Tegels´case, it has proven to be a wise move. Each to their own.

[hardt]

As I said in my earlier post TJ " I realise I may lose out on some good opportunities¨. Nobody is saying they are all bad investments. SUM is currently one of my biggest holdings. But I simply don´t buy into private equity IPOs these days and happy to wait for the companies to get some runs on the board before I invest in them. In Tegels´case, it has proven to be a wise move. Each to their own.

Agree with you on Tegel being one of those "iffy" buys at IPO... 1 year on and shedding almost 40% ... it has landed on a value pick for a lot of people looking for a high yielding stock at 6-8% that leads the market in an infinitely growing revenue model that has a somewhat low risk of disruption.

If the forecast is met, even on the lowest end, I would buy more shares in Tegel all the way up to 140c and look to hold for a lifetime...

[Balance]

If the forecast is met, even on the lowest end, I would buy more shares in Tegel all the way up to 140c and look to hold for a lifetime...

Good on you Hardt.

The market needs people like you to provide liquidity.

[silverblizzard888]

Its never been about what opportunities you miss in the market, cause there's always many opportunities presenting themselves, its about the ones you are certain of that help you come out on top overall.

Now Tegal could be offering a good opportunity but it could also be a pitfall.

The Uncertainties
-Due to this coming out from private equity and the lack of history it means uncertainty.
-The poultry market is a bit mixed right now too so thats uncertainty there too.
-Chairman resigned so thats uncertainty of what happen inside the company.

Certainties (Lets not forget theses)
-Tegal supplies majority of NZ market (50%)
-Well-known brand
-Strong export product (NZ branded, no hormones added)

At the end of the day I think Tegal is still relatively a decent company, but it'd have to be selling at the right price to justify the uncertain risk presented. Where does the margin of safety present itself? Currently it'd be at the lowest guidance range of $33 million profit. Given Air NZ (whos generating cash hand over fist) was pushed to the brink of its pricing range due to competition and uncertain expenses and ticket pricing leading to profit drops, which was PE 8.4 (currently) I'm incline to do the same until they prove more. 33 x 8.4 = $277 million Market Cap or 78 cents would present the best buying opportunity (of course it may never get here and you can buy at higher range but the more the price trends here the better the justification for risk and I know you're going to say its different industry but for me risk is similar in terms of uncertainties). Lets say they achieve mid range target, of $36.5 million profit then I'd still prefer 86 cents before I could feel safe buying.
*These prices adjust for a mixed negative with positive situation

[hardt]

Its never been about what opportunities you miss in the market, cause there's always many opportunities presenting themselves, its about the ones you are certain of that help you come out on top overall.

Now Tegal could be offering a good opportunity but it could also be a pitfall.

The Uncertainties
-Due to this coming out from private equity and the lack of history it means uncertainty.
-The poultry market is a bit mixed right now too so thats uncertainty there too.
-Chairman resigned so thats uncertainty of what happen inside the company.

Certainties (Lets not forget theses)
-Tegal supplies majority of NZ market (50%)
-Well-known brand
-Strong export product (NZ branded, no hormones added)

At the end of the day I think Tegal is still relatively a decent company, but it'd have to be selling at the right price to justify the uncertain risk presented. Where does the margin of safety present itself? Currently it'd be at the lowest guidance range of $33 million profit. Given Air NZ (whos generating cash hand over fist) was pushed to the brink of its pricing range due to competition and uncertain expenses and ticket pricing leading to profit drops, which was PE 8.4 (currently) I'm incline to do the same until they prove more. 33 x 8.4 = $277 million Market Cap or 78 cents would present the best buying opportunity (of course it may never get here and you can buy at higher range but the more the price trends here the better the justification for risk and I know you're going to say its different industry but for me risk is similar in terms of uncertainties). Lets say they achieve mid range target, of $36.5 million profit then I'd still prefer 86 cents before I could feel safe buying.

Why are you comparing trailing PE of Air NZ with the forward PE of TGH...

AIR NZ has a negative PEG and TGH, although low, has a PEG of 1.6-1.8 and $1 of book value for every 80c you put in.

[silverblizzard888]

Why are you comparing trailing PE of Air NZ with the forward PE of TGH...

AIR NZ has a negative PEG and TGH, although low, has a PEG of 1.6-1.8 and $1 of book value for every 80c you put in.

AIR is a poven listed company, TGH is a unproven listed company, both are in an uncertain industry and in competitive markets. Ones growing and the other declining in revenues, so for me they intersect in value. Growing revenues with low margins? I can find you many examples like WHS for example, it doesn't mean much if you're not making extra money for the risk taken, all it does is expand a cost base that may comeback and bite you if not properly compensated.

Book value (Assets $716 - Liabilities $244 - intangibles $334 = $138 million your liquidity value or book value if anything bad was to happen, as a shareholder you would get about 38 cents back

[Balance]

Its never been about what opportunities you miss in the market, cause there's always many opportunities presenting themselves, its about the ones you are certain of that help you come out on top overall.

Now Tegal could be offering a good opportunity but it could also be a pitfall.

The Uncertainties
-Due to this coming out from private equity and the lack of history it means uncertainty.
-The poultry market is a bit mixed right now too so thats uncertainty there too.
-Chairman resigned so thats uncertainty of what happen inside the company.

Certainties (Lets not forget theses)
-Tegal supplies majority of NZ market (50%)
-Well-known brand
-Strong export product (NZ branded, no hormones added)

At the end of the day I think Tegal is still relatively a decent company, but it'd have to be selling at the right price to justify the uncertain risk presented. Where does the margin of safety present itself? Currently it'd be at the lowest guidance range of $33 million profit. Given Air NZ (whos generating cash hand over fist) was pushed to the brink of its pricing range due to competition and uncertain expenses and ticket pricing leading to profit drops, which was PE 8.4 (currently) I'm incline to do the same until they prove more. 33 x 8.4 = $277 million Market Cap or 78 cents would present the best buying opportunity (of course it may never get here and you can buy at higher range but the more the price trends here the better the justification for risk and I know you're going to say its different industry but for me risk is similar in terms of uncertainties). Lets say they achieve mid range target, of $36.5 million profit then I'd still prefer 86 cents before I could feel safe buying.
*These prices adjust for a mixed negative with positive situation

Not too far off from you :

ING has stated it will come in at forecast - so trading on PER of 12X.

Allowing for the two months lag between balance date, TGH should trade at best on a discount of 10% to 20% against ING.

Assuming that TGH (by hook or by crook or cook) come in at $31m, it should trade at 84c to represent reasonable entry.

Remember that downgrades do not come in ones - they come in threes.

[hardt]

AIR is a poven listed company, TGH is a unproven listed company, both are in an uncertain industry and in competitive markets. Ones growing and the other declining in revenues, so for me they intersect in value. Growing revenues with low margins? I can find you many examples like WHS for example, it doesn't mean much if you're not making extra money for the risk taken, all it does is expand a cost base that may comeback and bite you if not properly compensated.

Industry PE for airlines is around 11-12, industry average for the food industry is in the low 20s... how you fail to see the difference between these industries has me confused.

You drag WHS in here as well, a bleeding retailer???

[Beagle]

As I said in my earlier post TJ " I realise I may lose out on some good opportunities¨. Nobody is saying they are all bad investments. SUM is currently one of my biggest holdings. But I simply don´t buy into private equity IPOs these days and happy to wait for the companies to get some runs on the board before I invest in them. In Tegels´case, it has proven to be a wise move. Each to their own.

I agree 100%. Private Equity has a MASSIVE vested interest when they make their forecasts. Generally the company being floated has already been the subject of serious restructuring and financial engineering and often forecasts are predicated on the results from these panning out as expected, which often of course they don't. Wealthy private equity investors can't help themselves being greedy nine times out of ten, in my opinion, so a cautious investor does well to take a prudent approach and let the company get some runs on the board and prove itself.

[Beagle]

Not too far off from you :

ING has stated it will come in at forecast - so trading on PER of 12X.

Allowing for the two months lag between balance date, TGH should trade at best on a discount of 10% to 20% against ING.

Assuming that TGH (by hook or by crook or cook) come in at $31m, it should trade at 84c to represent reasonable entry.

Remember that downgrades do not come in ones - they come in threes.

I'm with Balance on this, given all the uncertainties and the Chairman's resignation I think about 80 cents is reasonable buying IF they can make $30m.

[silverblizzard888]

Industry PE for airlines is around 11-12, industry average for the food industry is in the low 20s... how you fail to see the difference between these industries has me confused.

You drag WHS in here as well, a bleeding retailer???

The all produce and sell common commodities, subject to retail demand and pricing and above all for me risk is all the same no matter what form it takes.

*The average height of a kiwi male is 1.77m if someone is shorter than that can expect to grow to that?

[hardt]

The all produce and sell common commodities, subject to retail demand and pricing and above all for me risk is all the same no matter what form it takes.

Equivalency has now been drawn between food [ which is required for human life] and a thousand dollar aeroplane ticket to get you halfway across the world because you need a break from work...

It is not like Tegel is selling a luxurious niche product that given a downturn in the market will see a drastic shift in consumer behaviours, they sell chicken for Godsake!

I can tell I am not getting my point across here, if I think its a good buy at $1.07, I sure as hell am going to buy in at 80C for a 10% dividend in a company that sells food to hungry people...

[JeremyALD]

I'm with Balance on this, given all the uncertainties and the Chairman's resignation I think about 80 cents is reasonable buying IF they can make $30m.

This time I might have to disagree Roger. If they hit thirty million dollars about a $1 seems fair. Remember people were happy to buy in at $1.55 on a forecast of 45 million profit. They are going to fall short but not by 50%.

There are still lots of attractive things about the sector in general. I think it's looking ok around the current price, but there are certainly concerns which could push it lower.

[couta1]

Equivalency has now been drawn between food [ which is required for human life] and a thousand dollar aeroplane ticket to get you halfway across the world because you need a break from work...

It is not like Tegel is selling a luxurious niche product that given a downturn in the market will see a drastic shift in consumer behaviours, they sell chicken for Godsake!

I can tell I am not getting my point across here, if I think its a good buy at $1.07, I sure as hell am going to buy in at 80C for a 10% dividend in a company that sells food to hungry people... Go with your own convictions, you only have to convince yourself it's good buying at current levels, if others disagree, that doesn't matter, just like I've convinced myself that Air is not good buying at current levels.

[silverblizzard888]

Equivalency has now been drawn between food [ which is required for human life] and a thousand dollar aeroplane ticket to get you halfway across the world because you need a break from work...

It is not like Tegel is selling a luxurious niche product that given a downturn in the market will see a drastic shift in consumer behaviours, they sell chicken for Godsake!

I can tell I am not getting my point across here, if I think its a good buy at $1.07, I sure as hell am going to buy in at 80C for a 10% dividend in a company that sells food to hungry people...

No equivalency has been drawn between food needed for living and flight tickets needed for travel whether for business, special occasions and general travel (not just tickets for worldwide travel, last I checked AIR was a domestic carrier too ^^.) Flying has become a general transport need like a car. Flying is no longer just a luxury, though it can be too, but very much affordable and many people can travel for quite low prices these days, heck price of a few chickens can have you on the plane these days when buying right.

Actually Tegel do sell premium added value products, a luxury in terms of chicken products, not everyone will be having a budget to afford that. Most only having a budget for their chicken drums, thighs and the whole chicken (low margin products).

Your points are taken and its a fair perspective, though I feel you've narrowed your vision down too much, perhaps it may serve you well and perhaps it won't, markets generally shows whose right in the long run and if you think the risk is worth it at $1.07 I can respect that too. I hope you can keep that optimism if in the case it drops to 80 cents and keep enough money to average down.

[Beagle]

Following simple TA analysis would have avoided holders losing a LOT of money. Clear and ongoing downtrend since last August at $1.80. Breech of the 100 day MA would have seen IPO investors sell at $1.67 for a modest profit. NEVER EVER buy in a downtrend (KW). Currently the 100 day MA is $1.25.

Until that's breeched on the upside confirming the end of the downtrend and the establishment of a recovery, TA people would be keeping their powder dry.
For more aggressive TA investors looking to buy into the early stages of a trend reversal even the 30 day MA is at $1.14.
With the recent resignation of the Chairman I see no reason to take a speculative position regardless of what PE one think's is fair because the question is just as much what is the profit for FY17 but also what is the outlook for FY18 ?

[percy]

So very true.................PPH...??????????????......... .....lol.

[Rep]

Jeez - chicken prices down 6.5% (at retail?)

Possible that the supermarkets have reduced margins and Tegel stil doing OK?

Yeah, Foodstuffs and Progressive would take a hit for their supplier so that they can keep making enough money... you haven't worked in FMCG industry have you Winner?

[Balance]

Yeah, Foodstuffs and Progressive would take a hit for their supplier so that they can keep making enough money... you haven't worked in FMCG industry have you Winner?

Notice how Foodstuffs and Progressive take time bi-weekly to have chicken on special? And this week, Mad Butcher has drumsticks on special again at $2.99 kg and breasts at $7.99 kg.

[Rep]

Notice how Foodstuffs and Progressive take time bi-weekly to have chicken on special? And this week, Mad Butcher has drumsticks on special again at $2.99 kg and breasts at $7.99 kg.

If a FMCG Demand Manager has a lot of product to shift - particularly if it's perishable fresh product, they will tender/pitch for the promo space with the supermarket category manager.

That will mean either paying for the shelf space (e.g. those aisle end product specials aren't randomly chosen, the manufacturer has to buy that space) and/or doing a deal for the product to be sold cheap to the the supermarket (sometimes it might be a low price, for other reasons - it might be some 'free product' or a rebate if the volume is achieved (which of course it will be as the category manager won't be lured into setting a high hurdle to get their rebate/credit or their free pallets of product). Inghams and Tegel are apparently busting at the seams with fresh product - so you'll see fresh product used as a loss leader. Excess fresh product is usually frozen or turned into value add... when that value add starts being discounted then it's a good indicator that the frozen warehouse space is full as well.

[Balance]

If a FMCG Demand Manager has a lot of product to shift - particularly if it's perishable fresh product, they will tender/pitch for the promo space with the supermarket category manager.

That will mean either paying for the shelf space (e.g. those aisle end product specials aren't randomly chosen, the manufacturer has to buy that space) and/or doing a deal for the product to be sold cheap to the the supermarket (sometimes it might be a low price, for other reasons - it might be some 'free product' or a rebate if the volume is achieved (which of course it will be as the category manager won't be lured into setting a high hurdle to get their rebate/credit or their free pallets of product). Inghams and Tegel are apparently busting at the seams with fresh product - so you'll see fresh product used as a loss leader. Excess fresh product is usually frozen or turned into value add... when that value add starts being discounted then it's a good indicator that the frozen warehouse space is full as well.

Plenty of that going on with our local Pak n Save - chickens (drumsticks, nibbles, legs, breast meats etc) on special at the entry area all week long!

And frozen lamb legs a few days ago.

[sb9]

Plenty of that going on with our local Pak n Save - chickens (drumsticks, nibbles, legs, breast meats etc) on special at the entry area all week long!

And frozen lamb legs a few days ago.

Absolutely, have noticed that with our local Countdown too..plenty of Tegel (Fresh and Frozen) stuff on sale.

Must be going on guns blazing to reach sales targets I think.

[Rep]

Absolutely, have noticed that with our local Countdown too..plenty of Tegel (Fresh and Frozen) stuff on sale.

Must be going on guns blazing to reach sales targets I think.

And thus sales are achieved and the promo/rebate quietly gets slipped into marketing and promotional costs...

[Balance]

https://www.nzx.com/files/attachments/258911.pdf

A month away and all will be revealed - will the chooks be clucking or chucking?

[JeremyALD]

https://www.nzx.com/files/attachments/258911.pdf

A month away and all will be revealed - will the chooks be clucking or chucking?

Well I think this indicates they're a least going to meet guidance for the financial year. As Roger mentioned the forward guidance will be the interesting part.

[janner]

A fan dance coming on with very few feathers.

[hardt]

From Investor relations 28/05/17, bog standard reply in regards to Ogden... still nice to see my "no news is bad news" bait being taken.

Financials for the year ending April 30 would surely be well known... conviction is still there for me.

Hi XXXX

Thank you for your e-mail.
Having valued his tenure at Tegel, James Ogden has sought to balance the number of board roles and other responsibilities which he wishes to concentrate on. James worked very hard as Chairman of Tegel and was very much focused on the IPO process from the very early stages in September 2015 and seeing the company through listing on the NZX and ASX. We are very grateful to James and the work he put in.
Tegel has a leading market position and is number one across all branded poultry product categories in New Zealand. We have an established and growing export business and have well recognised products across a range of categories.
We look forward to presenting our annual results to market on 27 June.

Kind regards
XXXX

PS I understood the proverb to be “No news is good news”.

[JeremyALD]

Did they email you this? Why didn't they say this in their announcement then or in response to nbr??

[winner69]

So no news is good news = NPAT of $34m

No surprises

Current share price what market thinks it worth - ie fairly valued?

What (if anything) is going to drive shareprice forward to say $1.50?

[Arbroath]

I'll play devil's advocate for you winner....

Chicken prices are near 10-year lows. FY18 might see a gradual recovery in prices as inventory issues resolve slowly as both major players, post listing, start to behave a little more rationally in their NZ duopoly (Tegel & Ingham are c. 85% of the NZ poultry market). Tegel could easily make $40m npat if that scenario plays out and with better sentiment (i.e. all the disappointed ipo punters have sold out for $1.05-1.20 a share) the share price might recover towards $1.50 as the expectation of higher npat and dividends takes hold. Essentially the float was priced too aggressively and they look to be at least a year behind their IPO forecasts but if they start to look like they can deliver 10% npat growth then the sentiment/share price could recover quite quickly...

[hardt]

Did they email you this? Why didn't they say this in their announcement then or in response to nbr??

I am guessing they didnt have a gathered response to the departure for the market announcement and talking to the press would make it seem like a big deal...

8867

[JeremyALD]

I am guessing they didnt have a gathered response to the departure for the market announcement and talking to the press would make it seem like a big deal...

8867

LOL at them saying no news is good news. I love how much Tegel talk themselves up despite losing shareholders 35% in capital in one year. I still think it's fairly priced at the moment but I'm not buying anymore than a few thousand shares until they give me a bit more confidence

[Balance]

From Investor relations 28/05/17, bog standard reply in regards to Ogden... still nice to see my "no news is bad news" bait being taken.

Financials for the year ending April 30 would surely be well known... conviction is still there for me.

Hi XXXX

Thank you for your e-mail.
Having valued his tenure at Tegel, James Ogden has sought to balance the number of board roles and other responsibilities which he wishes to concentrate on. James worked very hard as Chairman of Tegel and was very much focused on the IPO process from the very early stages in September 2015 and seeing the company through listing on the NZX and ASX. We are very grateful to James and the work he put in.
Tegel has a leading market position and is number one across all branded poultry product categories in New Zealand. We have an established and growing export business and have well recognised products across a range of categories.
We look forward to presenting our annual results to market on 27 June.

Kind regards
XXXX

PS I understood the proverb to be “No news is good news”.

Nice of them to give a reply but not nice at all of them to try and hoodwink Joe Public with the BS on James Ogden resigning.

What an absolute load of garbage to come out with that line about James wishing to concentrate on other board roles! If that was the case, that would have been stated when he resigned AND James would have provided notice for an orderly exit.

If James resigned for the stated reason with the way he left immediately, I would have to say that he has well and truly lost credibility in a big way.

Begs the question what kind of fools Tegel must think the investing public are - maybe not surprising given they managed to hoodwink with an IPO process with financial forecasts which bear no resemblance to reality!

[silverblizzard888]

"James Ogden has sought to balance the number of board roles and other responsibilities which he wishes to concentrate on. "

Even if we accept that as the reason, so he chose to keep the best roles and ditched the questionable ones i.e Tegals?

[winner69]

Some companies Ogden director of not been good investment - Tegel, Warehouse and to some extent Summerset

[Balance]

Some companies Ogden director of not been good investment - Tegel, Warehouse and to some extent Summerset

And if his style is that he resigns immediately,

and suddenly,

without giving notice

because (according to Tegel) he is attempting to balance his board roles and other responsibilities, then he is not a person who should be appointed to any board!

[bottomfeeder]

And if his style is that he resigns immediately,

and suddenly,

without giving notice

because (according to Tegel) he is attempting to balance his board roles and other responsibilities, then he is not a person who should be appointed to any board!

Totally agree with that.

[Balance]

NBR today : "Ex Tegel chairman cites ‘angst’ on missing profit target. After his sudden resignation last month, another company’s shareholders get an explanation."

Interesting.

Now why would Mr Ogden resigned suddenly and without notice in May 2017 over the missed profit target which was announced in December 2016?

Unless it is a case of him reviewing the results for 31 March 2017 in May and he decided he had enough of yet another downgrade?

[JeremyALD]

NBR today : "Ex Tegel chairman cites ‘angst’ on missing profit target. After his sudden resignation last month, another company’s shareholders get an explanation."

Interesting.

Now why would Mr Ogden resigned suddenly and without notice in May 2017 over the missed profit target which was announced in December 2016?

Unless it is a case of him reviewing the results for 31 March 2017 in May and he decided he had enough of yet another downgrade?

If that was the case Tegel would of had to announce the drop by now. Why do you have such strong hate for Tegel balance?

[hardt]

Why does everybody think that a resignation of a chairman of an underperforming company is some sort of doomsday event, what are the chances of Ogden being "asked" to bow out?

[Balance]

If that was the case Tegel would of had to announce the drop by now. Why do you have such strong hate for Tegel balance?


Strong word 'hate' JeremyALD!

Making them accountable - that's more appropriate language for a company which :

1. Inflated forecasts to suck investors into its IPO - no other way to explain a reduced forecast (with a reduced range big enough to drive a truck through),

2. Has its Chairman resigned suddenly without any explanation,

3. Wrote to one shareholder/investor/poster with some cock and bull story about the Chairman resigning to 'balance' :D his board positions and other responsibilities. http://www.sharetrader.co.nz/showthread.php?10411-Tegel-IPO/page58

Explanation required - 1. is bad enough but to compound 1. with 2. and 3. verges on total contempt for investors and shareholders (save those who are happy to accept 1., 2. & 3. as feather plucking good stuff).

[JeremyALD]

Strong word 'hate' JeremyALD!

Making them accountable - that's more appropriate language for a company which :

1. Inflated forecasts to suck investors into its IPO - no other way to explain a reduced forecast (with a reduced range big enough to drive a truck through),

2. Has its Chairman resigned suddenly without any explanation,

3. Wrote to one shareholder/investor/poster with some cock and bull story about the Chairman resigning to 'balance' :D his board positions and other responsibilities. http://www.sharetrader.co.nz/showthread.php?10411-Tegel-IPO/page58

Explanation required - 1. is bad enough but to compound 1. with 2. and 3. verges on total contempt for investors and shareholders (save those who are happy to accept 1., 2. & 3. as feather plucking good stuff).

Did you get burnt personally? I agree it's been a shambles but I do think the dislike on this thread has become a bit overbearing, at least until they release their next results. Tegel is still a sound company regardless of the bs in the IPO. The market seems to have found fair value around these levels. Strong support at 1.05

[percy]

Just after the IPO two leading brokers had target prices of between $1.95 and $2,10.
Now support at $1.05.?
Why?
To find the answer,read Balance's post.
I prefer to invest in companies who do what they say they will do.
TGH can't even meet their on forecasts.
I now see them as a proven underperformer,whom lack credibility ,and trust ,from investors ,such as myself.

[Sideshow Bob]

Just after the IPO two leading brokers had target prices of between $1.95 and $2,10.
Now support at $1.05.?
Why?
To find the answer,read Balance's post.
I prefer to invest in companies who do what they say they will do.
TGH can't even meet their on forecasts.
I now see them as a proven underperformer,whom lack credibility ,and tust ,from investors ,such as myself.

Simple but sage words - "companies who do what they say they will do"

[Arbroath]

Did you get burnt personally? I agree it's been a shambles but I do think the dislike on this thread has become a bit overbearing, at least until they release their next results. Tegel is still a sound company regardless of the bs in the IPO. The market seems to have found fair value around these levels. Strong support at 1.05

I agree Jeremy the sentiment seems irrationally negative. I've no doubt they were too aggressive in their IPO forecasts but thats why I avoided them at $1.55+ (don't get me started on the appalling float process re the price either). However, chicken prices are at 10-year lows which is a material change from when they floated and the company will still make $30m+ npat - if they don't deliver that then they'd be more than 10% below their recent and reconfirmed guidance and everyone would have cause to complain loudly. So at $30m+ we have a company at 12x earnings selling a product at a cyclical low in pricing (opinion obviously on actual cyclical low) and quite low balance sheet gearing.

I am now long at $1.13 and think we can see 40-50% upside over 2-3 years plus a fully imputed 6%+ yield - I like the odds at this point despite all the negativity. I'll be looking at the result closely and may change my view but thats investing...

[Balance]

I agree Jeremy the sentiment seems irrationally negative. I've no doubt they were too aggressive in their IPO forecasts but thats why I avoided them at $1.55+ (don't get me started on the appalling float process re the price either). However, chicken prices are at 10-year lows which is a material change from when they floated and the company will still make $30m+ npat - if they don't deliver that then they'd be more than 10% below their recent and reconfirmed guidance and everyone would have cause to complain loudly. So at $30m+ we have a company at 12x earnings selling a product at a cyclical low in pricing (opinion obviously on actual cyclical low) and quite low balance sheet gearing.

I am now long at $1.13 and think we can see 40-50% upside over 2-3 years plus a fully imputed 6%+ yield - I like the odds at this point despite all the negativity. I'll be looking at the result closely and may change my view but thats investing...

1. Chairman of company resigned abruptly with no explanation in May 2017.

2. Company wrote in response to one poster that he resigned to 'balance' his board positions and other responsibilities.

3. Chairman told another company's shareholders he resigned due to 'angst' over profit forecasts - 5 months after profit downgrade (Dec 16) and 2 months (May 17) after balance date (when results are presumably known and being finalized).

2. and 3. do not compute.

Ironically, this is what Mr Ogden had to say about the appointment of a full time PR executive at Tegel :

Chairman, James Ogden says Ms White's extensive investor relations experiencewill greatly assist the organisation with its focused growth strategy.

"We are looking to grow our business domestically and in offshore markets,"says Mr Ogden. "Aleida's local and international experience will greatly
support these goals and

strengthen the provision of information and relations with our investor community."

*************

First real opportunity to engage with the investor community re sudden resignation of Chairman and she FAILED BIG TIME. Sp fall is testimony to that gross mismanagement.

She and Tegel must think that the whole of the investor community are like the chooks Tegel slaughter by the millions each month. Or is it a case she thinks everyone is a headless chook?

[bottomfeeder]

I have a few of these. OK the IPO was a flagrant money making exercise for the promoter. Overpriced at the IPO price, but still this company does produce something, and does it fairly well. At 1.05 I feel it is worthwhile sticking with in the long term. Just wish they would become more principled in their outlook. The Directors should forget about the shareprice for now and concentrate on building a worthwhile company, and get rid of more debt and write off more goodwill. Incidentally chicken prices may be a t a low but not for long. My wife and I had Carls Jnr last night, it cost us $29-90 for two and we didnt order anything extreme. WQe talked about it and it is cheaper and probably better for you to go to the supermarket, get a rotisserie chicken, saland and some rolls. So that is what we are going to do now. I bet a lot of people are thinking the same thing.

[winner69]

Tegel shareprice going well today - up to 110

[sideline]

Tegel shareprice going well today - up to 110

Leaving the NZ50 on Friday - anybody expect fallout from this?

[JoeGrogan]

Leaving the NZ50 on Friday - anybody expect fallout from this?

Where does one find the list of who's entering and leaving the index?

[Joshuatree]

Looks like NZX have passed the baton to S&P to manage our various indices. Well talk about dumbing down inefficiency; i can't find any relevant info when i click on what I'm told to ;there is nothing there about the NZ mkt let alone the companies that make up the various index's!! maybe someone else more techie can but not user friendly in my book!.

[sideline]

Looks like NZX have passed the baton to S&P to manage our various indices. Well talk about dumbing down inefficiency; i can't find any relevant info when i click on what I'm told to ;there is nothing there about the NZ mkt let alone the companies that make up the various index's!! maybe someone else more techie can but not user friendly in my book!.

try this link (https://us.spindices.com/search/?query=nz&Search=GO&sortType=Date&resultsPerPage=25&ContentType=Announcement)

it lists all S&P announcements, filtered for "NZ". Right now the current changes are the top announcment. I watched on Friday for the
announcement to appear and it appeared on the list AFTER market close! Does anybody know if fund managers or other subscribers have prior access to these announcements???

[Joshuatree]

Thanks ; let me know if you can find what stocks make up the various indices e.g. NZX 50. Im done looking.

[Balance]

try this link (https://us.spindices.com/search/?query=nz&Search=GO&sortType=Date&resultsPerPage=25&ContentType=Announcement)

it lists all S&P announcements, filtered for "NZ". Right now the current changes are the top announcment. I watched on Friday for the
announcement to appear and it appeared on the list AFTER market close! Does anybody know if fund managers or other subscribers have prior access to these announcements???

Fund managers and brokers (the proactive and progressive ones anyway) track the stocks in the indices very closely - most of the time they have a good idea of what are likely to be included and excluded in the forthcoming reviews. All based around market cap, excluded shareholdings, time on the market etc.

But gone are the days when funds make changes only on the day of the index changes - nowadays they try to take positions well ahead of time.

The fund managers and brokers subscribe as well of course to the index services - costs money. Am sure NZX gets a cut from S&P.

[sideline]

Thanks ; let me know if you can find what stocks make up the various indices e.g. NZX 50. Im done looking.



NZX does not wish to publish this info, however they try to sell a product called 'Smartshares', one of which (FNZ) is basically the NZ50 with each
share capped at a maximum of 5% weighting. Funds like this must regularly publish reports about their underlying investments - you will find your
list of NZ50 shares in their last report (dated 31-03-2017). Since the amount invested in each is listed, you can also calculate the weightings.

On 31-03-2017 FNZ held 591000 TGH shares.

correction: the fund is FNZ (=fifty NZ), not TNZ ! sorry

[blackcap]

NZX does not wish to publish this info, .

I always wondered why, but apparently they sell it?

[JoeGrogan]

Thanks ; let me know if you can find what stocks make up the various indices e.g. NZX 50. Im done looking.

Yeah i tried looking that up the other month and ended up with nothing but methodology documents. Does the NZX withhold it for paying customers?

[sideline]

Yeah i tried looking that up the other month and ended up with nothing but methodology documents. Does the NZX withhold it for paying customers?

try this link (https://www.nzx.com/files/attachments/258922.pdf) for the FNZ annual report.

Page 12 & 13 have the details.

[JoeGrogan]

try this link (https://www.nzx.com/files/attachments/258922.pdf) for the FNZ annual report.

Page 12 & 13 have the details.

Cheers :t_up:

[Louloubell]

Just bought a small parcel, have to declare soon! :D

[Entrep]

Surprising strength given they are about to get the boot from NZX50. Chicken CPI up?

[Lego_Man]

My wife and I had Carls Jnr last night, it cost us $29-90 for two and we didnt order anything extreme. WQe talked about it and it is cheaper and probably better for you to go to the supermarket, get a rotisserie chicken, saland and some rolls. So that is what we are going to do now. I bet a lot of people are thinking the same thing.

Unfortunately the people who really need to be doing that, probably aren't.

[Balance]

Unfortunately the people who really need to be doing that, probably aren't.

Bang on.

Talk to the fast food operators (especially KFC) and they will tell you their best customers are from the lower socio-economic groups.

[Meextr]

and the higher socio-economic groups buy the shares

[winner69]

Was doing something else but found these numbers

Poultry production in NZ over the years - up to March this year (from Stats NZ)


At record levels ....but annual growth has been slowing the last few quarters

No idea what it means but interesting

[Balance]

and the higher socio-economic groups buy the shares

Too true!

BTW, KFC does a huge thriving growth business exporting meals to the Islands. Try figuring that one out!

[sb9]

Surprised not to see anyone mention that special crossing of over 10mln shares @1.075 around midday.

[Louloubell]

Surprised not to see anyone mention that special crossing of over 10mln shares @1.075 around midday.

I did! Exactly at midday!;)

[Joshuatree]

Did no-one see that big Tongariro size crossing go through around midday?.Guess everyone was chow downng their smorgasbords?

[Entrep]

Woooooooosh

[JeremyALD]

I think it's safe to say there won't be another downgrade which is leading to a bit of a SP recovery heading towards the annoucement.

[bottomfeeder]

I think it's safe to say there won't be another downgrade which is leading to a bit of a SP recovery heading towards the annoucement.

Maybe, or maybe some risk takers only hoping for the best.

[silverblizzard888]

Likely no downgrade, though investors are looking optimistic about this meeting the middle of the guidance, quite a gamble if you ask me since I view it near the lower end.

Lets hope no one-off items are added in there either.

[bottomfeeder]

Likely no downgrade, though investors are looking optimistic about this meeting the middle of the guidance, quite a gamble if you ask me since I view it near the lower end.

Lets hope no one-off items are added in there either.

I believe there will be a writedown of Goodwill that the market does not expect.

[JeremyALD]

Likely no downgrade, though investors are looking optimistic about this meeting the middle of the guidance, quite a gamble if you ask me since I view it near the lower end.

Lets hope no one-off items are added in there either.

If they hit middle of guidance the SP would be well above current levels.

[Master98]

No news is good news, if final results fall into their guidance then shares will worth more than current level.

[Joshuatree]

Mmmmh, s/p back above 60 DMA on BIG vol, looking promising ; says he reaching for the anti hex bottle.

[JeremyALD]

Mmmmh, s/p back above 60 DMA on BIG vol, looking promising ; says he reaching for the anti hex bottle.

I bought back an extra small size parcel at $1.09. Only $800 away from making back my losses from the IPO! Considering topping up but think I'll wait till the results. It has burned me once before!

[JBmurc]

My first NZX purchase in a long lonnnggggg time .... ST hold

trading through 30-60 day MA

Overall NZX bores me to tears ....but hoping this trade will spike my interest once again

[Joshuatree]

https://img.buzzfeed.com/buzzfeed-static/static/2015-07/12/17/enhanced/webdr07/anigif_enhanced-26515-1436735211-2.gif?downsize=715:*&output-format=auto&output-quality=auto

[777]

https://img.buzzfeed.com/buzzfeed-static/static/2015-07/12/17/enhanced/webdr07/anigif_enhanced-26515-1436735211-2.gif?downsize=715:*&output-format=auto&output-quality=auto


https://img.buzzfeed.com/buzzfeed-static/static/2015-07/12/17/enhanced/webdr07/anigif_enhanced-26515-1436735211-2.gif?downsize=715:*&output-format=auto&output-quality=auto

[Joshuatree]

Thanks 777 ; still haven't sussed out this basic tool:ohmy:

[777]

Thanks 777 ; still haven't sussed out this basic tool:ohmy:

Just copy and paste the URL.

[Hoop]

Has this woofer with feathers turned around???...

Disc:.. hold none

[JeremyALD]

It climbed 11 cents before the last report too and we all know how that went. I'm optimistic, but I'm not expecting a stellar report. My predictions are 34 - 36 million NPAT, with 10% or so NPAT growth predicted in the next year.

I'm keen to hear more about exporting progress.

[JeremyALD]

Dividend wise maybe another 4 cents?

[JBmurc]

Happy with the market close good solid support ..another 2017 divie be brilliant .. to drive towards my sell price>>>>>

[hardt]

Without realising, I have found myself in a rather large position in TGH averaging around 107, the rebound off the markets overreaction was blatantly obvious last month, unsure why so many were poopooing the idea.

Looking forward to lower end of guidance... 4c dividend and a conservative forecast this time round.

[Balance]

Without realising, I have found myself in a rather large position in TGH averaging around 107, the rebound off the markets overreaction was blatantly obvious last month, unsure why so many were poopooing the idea.

Looking forward to lower end of guidance... 4c dividend and a conservative forecast this time round.

Good on you Hardt (And sincerely meant).

You should not make the assumptions however that the rebound is sustainable (until it really is).

Also, investors have choice to invest and you will find this revealing (I believe you also have the stock) - I found myself for example with a rather large position in another stock (knowingly) and there is no contest which stock I prefer to be in.

One has not disappointed the market, consistently delivers and is on a solid international growth path. The other has disappointed the market, been frugal with the truth and has limited growth upside.

Choose between ATM and TGH - no contest.

[Meextr]

2,800,000 went through at 117 at 1110 so there is some confidence out there.

[silverblizzard888]

2,800,000 went through at 117 at 1110 so there is some confidence out there.

Someone just sold 2,800,000 at 117 at 1110 so there is no confidence at that level too.

[tim23]

But someone just bought them at 117 who have confidence. ..

[Balance]

That is the beauty of the sharemarket. For every buyer, there must be a seller. For every seller, there must be a buyer.

[tim23]

I agree whenever there is a market meltdown commentators say everyones selling but any number are buying!

[BlackCross]

"For every buyer, there must be a seller."

In this case the market maker?

[Entrep]

If a tree falls in a forest and no one is around to hear it, does it make a sound?

[Joshuatree]

Depends on how many supplejack are holding it up and if they can, its a maul; very noisy:t_up:

[Balance]

I agree whenever there is a market meltdown commentators say everyones selling but any number are buying!

Actually, share prices move on the day depending on where the balance of buying and selling resides.

More sellers than buyers, price goes down.

More buyers than sellers, price goes up.

Punters like to comfort themselves when prices are falling that for every seller, there's a buyer. Actually true but sellers have to move down to meet buyers' price and vice versa.

[Hoop]

Yep Balance...These comfort punters should google "buyers market"....anyway for now at least TGH market have changed to a sellers market..

The price has moved from its 1.05 bottom to today at 1.21 which happens to be part of the bear/bull resistance zone price (1.21 is the closing day resistance line)...Going above this 1.21 line one should exercise caution for the margin of error as the intraday resistance line is at 1.23)...So a price above 1.23 indicates a higher high and puts a check on the downtrend and puts the bear on notice (chartwise a strong buy signal)..If the price fails to break though the 1.21/1.23 resistance and falls away, it marks the end of another sucker rally and one should expect the downtrend to continue and the price to revisit and put pressure on the 1.05 bottom..

Currently at 1.22

Disc: on watchlist

[JeremyALD]

Yep Balance...These comfort punters should google "buyers market"....anyway for now at least TGH market have changed to a sellers market..

The price has moved from its 1.05 bottom to today at 1.21 which happens to be part of the bear/bull resistance zone price (1.21 is the closing day resistance line)...Going above this 1.21 line one should exercise caution for the margin of error as the intraday resistance line is at 1.23)...So a price above 1.23 indicates a higher high and puts a check on the downtrend and puts the bear on notice (chartwise a strong buy signal)..If the price fails to break though the 1.21/1.23 resistance and falls away, it marks the end of another sucker rally and one should expect the downtrend to continue and the price to revisit and put pressure on the 1.05 bottom..

Currently at 1.22

Disc: on watchlist

Really though Hoop it all depends on the annoucement on Tuesday doesn't it. A good result and trend upward will continue, a bad result and it will go back down. People are taking positions at the moment expecting a fairly solid result in line with guidance. It completely depends on the result where this goes.

[Balance]

Really though Hoop it all depends on the annoucement on Tuesday doesn't it. A good result and trend upward will continue, a bad result and it will go back down. People are taking positions at the moment expecting a fairly solid result in line with guidance. It completely depends on the result where this goes.

I suspect market expects a result at the bottom end of the forecast - and in the absence of a downgrade to date, I agree TGH will most likely deliver towards bottom end of forecast (Ogden resigning is indicative of that).

The outlook is what is critical - abatement of competition and discounting, export market growth and payment of dividend from cashflow rather than debt.

[JeremyALD]

I suspect market expects a result at the bottom end of the forecast - and in the absence of a downgrade to date, I agree TGH will most likely deliver towards bottom end of forecast (Ogden resigning is indicative of that).

The outlook is what is critical - abatement of competition and discounting, export market growth and payment of dividend from cashflow rather than debt.

Yeah I agree. It's a bit of a toin coss at the moment so happy with a small share heading into the result.

[winner69]

Really though Hoop it all depends on the annoucement on Tuesday doesn't it. A good result and trend upward will continue, a bad result and it will go back down. People are taking positions at the moment expecting a fairly solid result in line with guidance. It completely depends on the result where this goes.

I know nothin .....but it could be a case of buy the rumour sell the fact

[Beagle]

I know nothin .....but it could be a case of buy the rumour sell the fact
Yes that is what concerns me. I've certainly noticed the clean break up through the 100 day MA like a lot of others have but...Ogden wouldn't have resigned without very good reason I would have thought, so maybe some people are counting their chickens before they've hatched ? One things for sure, although some people recently buying at $1.07 might be feeling a little clucky, poor beleaguered IPO investors sure aren't !

[JeremyALD]

Yes that is what concerns me. I've certainly noticed the clean break up through the 100 day MA like a lot of others have but...Ogden wouldn't have resigned without very good reason I would have thought, so maybe some people are counting their chickens before they've hatched ? One things for sure, although some people recently buying at $1.07 might be feeling a little clucky, poor beleaguered IPO investors sure aren't !

I'm kind of thinking he was asked to leave by Tegel, but that's only my thoughts. He wasn't a very good chairmen for them and he didn't give me any confidence in the time he was the chair of the company

[peat]

Its just that chickens (due to their rubberiness) bounce higher than cats.

[winner69]

I'm kind of thinking he was asked to leave by Tegel, but that's only my thoughts. He wasn't a very good chairmen for them and he didn't give me any confidence in the time he was the chair of the company

Ogden seems to bringing bad 'luck' to some of his other directorships - The Warehouse and Summerset

[couta1]

Ogden seems to bringing bad 'luck' to some of his other directorships - The Warehouse and Summerset Yeah I thought to myself when they read out his directorships at the AGM, other than SUM, he had a fine bunch of dogs(Even SUM acting like one currently)

[hardt]

Good on you Hardt (And sincerely meant).

You should not make the assumptions however that the rebound is sustainable (until it really is).

Also, investors have choice to invest and you will find this revealing (I believe you also have the stock) - I found myself for example with a rather large position in another stock (knowingly) and there is no contest which stock I prefer to be in.

One has not disappointed the market, consistently delivers and is on a solid international growth path. The other has disappointed the market, been frugal with the truth and has limited growth upside.

Choose between ATM and TGH - no contest.

I already have 30% of my net worth ( of my short life's work ) in ATM, I'm not comfortable with putting anything more down, no matter how well I have done with them so far.

Quants on Tegel are solid, disregard the previous overly optimistic forecasting and just look at the numbers, explosive growth is never going to be available in a #1 market leader in NZ... Organic growth domestically and moderate export growth including a well above market dividend is all there.

Very much looking forward to the results next week, as previously stated the 105-110 entry opened up a 20-30% upside in the couple months. If the results land anywhere in the wide forecast.

Either way, it was a solid pick that many took advantage of early with very little downside in my opinion ( uncertainty breeds bargains ).

[Valuegrowth]

Tegel was due for rebound after slide in their stock prices. There is a value in chicken. Did Forsyth Barr upgrade to outperform in April 2017? I think so. Long term fundamentals are intact barring they don’t see any strong competition.

[Hoop]

Really though Hoop it all depends on the annoucement on Tuesday doesn't it. A good result and trend upward will continue, a bad result and it will go back down. People are taking positions at the moment expecting a fairly solid result in line with guidance. It completely depends on the result where this goes..

Exactly, or is it?...Most investors (including me) have FA dialed in as a default in their personal makeup.. and therefore puts major focus on the announcement....Are there other factors in play??
I wait for the break out..not Tuesday...

Disc: on watchlist

[silverblizzard888]

Last time there was a rebound back up to the long term trend was in Dec 16 and I don't think I need to tell you what happened next.

[winner69]

Last time there was a rebound back up to the long term trend was in Dec 16 and I don't think I need to tell you what happened next.

It went down again .....but silver, this time it's different

[silverblizzard888]

It went down again .....but silver, this time it's different

Oh true this time it's different, bring on Tuesday! Chickens gonna fly or do they?

[Joshuatree]

Simply the original prob was an increase in volumes in the industry by the main producers esp Inghams and Tegel. The mkt wasn't big enough to cope hence a glut. All their feed is imported and global feed is in oversupply hence cheap; this is what started the ramp up.. Global demand for chicken is good however atm due to bird diseases etc, overseas.If tegel has ramped up its exports that will be helpful.
Its also thought by some that Tegels estimates re sales and profits were exaggerated in the IPO by the Sellers.

[Beagle]

Promotors originally were talking $2.50 for the IPO float. This could give some investors a clue as to their greed. Greed usually manifests itself in others ways too...like creative forecasting and in some cases attempts to bend the GAAP rules around reporting to artificially inflate one years results to make things look better / head off any potential litigation against the promotors creative forecasting.
You would hope that the veracity of a thorough audit would sort any and all of these issues out thoroughly wouldn't you...but consider this...all those audits of finance company books during the GFC could really be completly relied upon to detect fraud, error and deliberate corporate malfeasance couldn't they and the finance company Trustee's did such a "wonderful" job protecting investors money didn't they ! Something smell's a little "off' in the kitchen which is probably why Mr Ogden jumped ship.

[Joshuatree]

Roger the tainter; classic very smelly piece.:t_up:

[Valuegrowth]

http://www.thepoultrysite.com/poultrynews/38797/nz-appetite-for-chicken-breast-meat-soars/

NZ Appetite for Chicken Breast Meat Soars

[Valuegrowth]

There is shortage in lamb meat. There is a shortage of lamb exports from Australia and NZ. Lamb prices are rising. Beef prices are solid and consistent but with the dairy payout picking up, cull cow numbers are expected to drop. Therefore, cheap chicken will have more demand globally in the coming months. 2017/18 is going to be another chicken year globally as well as in New Zealand. Today, I visited one meat shop and I hardly found any lamb meat there. So far New Zealand lamb has performed strongly for the last six months. New Zealand is the world's largest exporter of lamb meat. A drop in lamb slaughter rates in New Zealand has pushed up prices to multi-year highs in export markets.

[Balance]

There is shortage in lamb meat. There is a shortage of lamb exports from Australia and NZ. Lamb prices are rising. Beef prices are solid and consistent but with the dairy payout picking up, cull cow numbers are expected to drop. Therefore, cheap chicken will have more demand globally in the coming months. 2017/18 is going to be another chicken year globally as well as in New Zealand. Today, I visited one meat shop and I hardly found any lamb meat there. So far New Zealand lamb has performed strongly for the last six months. New Zealand is the world's largest exporter of lamb meat. A drop in lamb slaughter rates in New Zealand has pushed up prices to multi-year highs in export markets.

All cyclical - farmers cut back lamb production in response to low prices in previous years, prices go up due to lower supply and guess what happens? Farmers cut back supply even further as they rebuild stock numbers, accentuating the supply shortage situation! Lamb prices move from high to low in a 3 year cycle. Beef prices are only back to their average over the last 7 years.

Chicken prices certainly look really good internationally. However, New Zealanders have always paid a huge premium over prices in other countries. Go to Asia and chickens are cheap as.

[Balance]

http://www.thepoultrysite.com/poultrynews/38797/nz-appetite-for-chicken-breast-meat-soars/

NZ Appetite for Chicken Breast Meat Soars

Meanwhile, drumsticks and chicken legs are being offered at ever lower prices as chickens have one 'breast' but two legs.

[Hectorplains]

Meanwhile, drumsticks and chicken legs are being offered at ever lower prices as chickens have one 'breast' but two legs.

Drumsticks are chicken legs...Essential wings and legs are byproduct. The price issue is that breast - skin on - is still being specialed at $7.99kg. This suggests the glut is not yet over.

[hardt]

Consumption growth > Glut

[Balance]

Consumption growth > Glut

Not true, Hardt.

Why prices have been under pressure.

Agree with you however that if consumption can continue to grow, price dynamics will change.

Those in the industry will tell you however that there are huge production facilities coming through in both NZ and Australia.

[hardt]

Not true, Hardt.

Why prices have been under pressure.

Agree with you however that if consumption can continue to grow, price dynamics will change.

Those in the industry will tell you however that there are huge production facilities coming through in both NZ and Australia.

Keynesian is kaput, supply does create the demand.

More chicken on the shelves, the better.

[silverblizzard888]

Keynesian is kaput, supply does create the demand.

More chicken on the shelves, the better.

If supply outpaces growing demand then you still just end up with lower prices. Inputs and Outputs in business tend to be lagging factors and don't actually react instantly, put that along with management who are adamant that the situation will change and there is no end to the supply, but there is limited number of people in NZ and amount that can be exported. Just like the stand off between oil suppliers not too long ago, no one would back off until everyone was suffering detriment, though unlike oil these chicken producers aren't gonna hold meetings to talk about this one.

[Joshuatree]

Glut GLUT GLUT cluck cluck. Thats why production went over the top. Glut GLUt Cluck. About the 4 th year of bargain grain.
Grains piled on runways, parking lots, fields amid global glut | Reuters (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwiv2NCkidrUAhWMmpQKHVEdAb8QFggoMAA&url=http%3A%2F%2Fwww.reuters.com%2Farticle%2Fus-usa-grains-storage-analysis-idUSKBN17D0EO&usg=AFQjCNG4NKG7REPw2szsCBhVc80YNJ9lMw)

[Valuegrowth]

Finally, it is showing some positive momentum and currently it is trading around $1.21. Tegel Group Holdings has a significantly low debt on its balance sheet. Long term investors should study their financial soundness.



52 week

1.05 - 1.80

[mfd]

Promotors originally were talking $2.50 for the IPO float. This could give some investors a clue as to their greed.

If you remember, this higher share price would have been associated with a smaller number of shares being issued for the same total share of the company. The range of total value being offered was $299-344 million. To quote the share price offered in isolation is at best misleading.

[Joshuatree]

Yes,and pretty irrelevant to the price that is being offered now anyways:eek2:.Still in the red holding a few but i sold majority after IPO at a loss and bought AIR:)

[Valuegrowth]

I found another interesting link.

https://claytonnewsreview.com/taking-aim-at-tegel-group-holdings-limited-nzsetgh-shares/63412/

There are four analysts are covering in the current year and two have recommend as buy. If I am correct even Forsythe Barr Upgraded to OUTPERFORM in April 2017. They expect better year in 2018 according to following link. Is it a good price to buy now?

https://nz.finance.yahoo.com/quote/TGH.NZ/analysts?p=TGH.NZ

Please note that I don’t have any shares of Tegel but I am following eagerly it now.

[JBmurc]

Sold my trade for small profit on friday .....@1.21 .....be interesting to see if it retraces to purchase price

[Valuegrowth]

It went down again .....but silver, this time it's different

Is it different this time?

[Valuegrowth]

Sold my trade for small profit on friday .....@1.21 .....be interesting to see if it retraces to purchase price

I expected it to drop below $1.00 but it didn't happen. It may go up when demand for consumer staples go up during second half of this year.

[JBmurc]

I expected it to drop below $1.00 but it didn't happen. It may go up when demand for consumer staples go up during second half of this year.

Yes lots of roast chickens >> not sure if I'll trade again but would be tempted if it drops to 1.15-1.16

[JeremyALD]

Dropped by 4.5% ahead of results. What will happen tomorrow is anyones guess. There'll be suprises in store I'm sure.

[JBmurc]

Yes dropped right away to the close ... glad I took my trade ..not to greedy (for once!!!!)

Could well be a smart BUY on the close

[hardt]

No matter which way it goes there will be a gap come tomorrow morning.

[RGR367]

No matter which way it goes there will be a gap come tomorrow morning.

I'm betting that it doesn't go lower than my last acquisition cost of 107.

[Balance]

So will it be chicken breasts, chicken heads or the bishop nose today?

I see some souls bailing out yesterday ahead of the results today - do they know something (insider trading stuff) or are they simply nervous despite all the bravado talk?

[JeremyALD]

34.2 million NPAT and 4.10 cent dividend. Growth expected next year. In line with my expectations. Pretty happy overall and expect a decent day ahead of trading.

[winner69]

Pretty classy presentation

https://www.nzx.com/files/attachments/260622.pdf



Pity they mentioned the PFI numbers ....but that's all dusted and forgotten eh

[winner69]

So sell 7k tonnes more chicken for increased sales of $31m but Gross Profit down $2.3m because the cost of sales were up $34m. I thought feed was cheap as at the moment.

So pricing not the only thing affecting margins

Just as well (as some say) the local pricing issues are easing. So F18 better prices will feed straight through to the bottom line ...that's good, might offset the costs side

[hardt]

A pretty much expected result without any surprises.

Solid result nonetheless... 4.1c dividend is great, getting more book for your buck is always a good thing too... Still dirt cheap going forward IMHO, opinions change and so do operating metrics...

[JeremyALD]

Fully imputed too, not bad. I would of liked to hear more about the domestic market and pricing - but seems soft pricing will be around in FY18 too (albeit starting to ease)

[winner69]

I think punters at the moment aren't attracted to Tegel because it might be a great company but because it shareprice is so so cheap. Seen as so cheap thst even vegetarians and animal lovers could be tempted to buy.

[silverblizzard888]

Looks like they made it across the line for NPAT, though by the looks of only by having a 53 week time frame and possibly because of 'other revenue' increasing from 48 to 53 million, which could be legitimate or desperate selling to make sure they crossed the threshold. If not for 53 weeks they would not have met their export target and not much growth on the export end of things. Margins are down and vague forecast given for future outlook. Overall it looks alright, looks better dressed than I thought, though still a bit of uncertainty about these guys. Dividend seems alright . Nothing to convince me to be a shareholder, but hope shareholders are happy with this.

[winner69]

Looks like they made it across the line for NPAT, though by the looks of only by having a 53 week time frame and possibly because of 'other revenue' increasing from 48 to 53 million, which could be legitimate or desperate selling to make sure they crossed the threshold. If not for 53 weeks they would not have met their export target. Margins are down and vague forecast given for future outlook. Overall it looks alright, looks better dressed than I thought, though still a bit of uncertainty about these guys. Dividend seems alright . Nothing to convince me to be a shareholder, but hope shareholders are happy with this.

Food stocks always seem a bit problematical

Like the staples of all staples in bread, milk etc - goodman Fielder was a dog of an investment when listed. Always at the beck and call of customers.

[JeremyALD]

I think the lack of forcast is a good thing in away. They've learn from their previous mistakes and providing massive forcast ranges. I'd say they are very confident they'll at least improve NPAT next year, but have decided not to go into any further details to not disappoint the market again.

[winner69]

I think the lack of forcast is a good thing in away. They've learn from their previous mistakes and providing massive forcast ranges. I'd say they are very confident they'll at least improve NPAT next year, but have decided not to go into any further details to not disappoint the market again.

You are easily pleased - they weren't going to say we are going to make less next year were they!!!

[trader_jackson]

Pretty classy presentation

https://www.nzx.com/files/attachments/260622.pdf



Pity they mentioned the PFI numbers ....but that's all dusted and forgotten eh

Then need it to try hide all the issues... they must have dreamed up the PFI because nothing is really that close... but at least most were a bit better than last year... another year of growth on all fronts right? - something they are keen to point out I note... pitty they didn't clearly point out that operating cash flow actually got worse (not way better like they were expecting)... at least we now know why that high flyer on sum other boards decided to quit abruptly.

Good luck to the holders, at least a 4 cent dividend goes some of the way to help for the dozens of cents erased since listing

[couta1]

So it's priced about right currently.

[JeremyALD]

You are easily pleased - they weren't going to say we are going to make less next year were they!!!

Didn't you just say it was a "great result". Anyway let's see what happens. They have a very dominate NZ market position and there are positives in this stock. Everyone is very keen to crusify them on this site, however if you look at the current SP and results (whilst ignoring the prospectis, which yes deserves to be factored in) there does seem to be value. Someone would need to do some serious convincing to tell me this stock is worth than less than $1 with growing revenues, export growth and 52% NZ market share who has pulled out 34 million NPAT in a massive chicken glut.

[BlackCross]

"....at least we now know why that high flyer on sum other boards decided to quit abruptly...."

Perhaps my aging years but having had a read through all the .pdfs I still can't find any reference to his leaving? Could someone give me a pointer please?

[Master98]

"....at least we now know why that high flyer on sum other boards decided to quit abruptly...."

Perhaps my aging years but having had a read through all the .pdfs I still can't find any reference to his leaving? Could someone give me a pointer please?


final results already out, I can't see any point of you why still obsessed with former chair leave.

[trader_jackson]

"....at least we now know why that high flyer on sum other boards decided to quit abruptly...."

Perhaps my aging years but having had a read through all the .pdfs I still can't find any reference to his leaving? Could someone give me a pointer please?



https://nzx.com/companies/TGH/announcements/300692

"Tegel Group Holdings Limited Chairman resignation" loud and clear on the NZX website (5 May)

[Joshuatree]

A good result considering.I was very slow at joining dots here. TGH from $1.60 to $1.20 since listing and the real beneficiary of adding value to cheap chicken RBD from $5.10 to $5.95 in same time frame:eek2:

[BlackCross]

https://nzx.com/companies/TGH/announcements/300692

"Tegel Group Holdings Limited Chairman resignation" loud and clear on the NZX website (5 May)

Yes, that tells us he is leaving but not why,as your post 'loudly and clearly' suggested we now know.

[JeremyALD]

Yes, that tells us he is leaving but not why,as your post 'loudly and clearly' suggested we now know.

Thats been well discussed. No one knows why he left other than poor company performance...

[JBmurc]

... Buy & Hold IMHO ... 6.7% divi using the FY17 yield(should be able to repeat FY18) ... reduction in debt , more automation to continue to lower costs , free range growth ...do like the rebranding ... not going shoot through the roof but I'd be expecting 10-15% return for a YoY hold

[couta1]

Thats been well discussed. No one knows why he left other than poor company performance... Probably wants to spend more time with the grandkids.

[JBmurc]

Anyone know ex.date for 4.1c divi ?

[couta1]

Anyone know ex.date for 4.1c divi ? Not up on NZX yet, should be early July.

[JBmurc]

Not up on NZX yet, should be early July.

Right thanks couta

[Kelvin]

Anyone know ex.date for 4.1c divi ?

12 July according to the Appendix 7

[couta1]

I'm in for the divvy, result was okay and the stock is quite liquid.

[JeremyALD]

I'm in for the divvy, result was okay and the stock is quite liquid.

Not a bad choice Couta. You might have to hold for a bit though, could see it dropping after the dividend payment but it will climb back up. I see the possible low around $1.05, but should stablise after the divvy.

[winner69]

Slide 6 in preso has some nice charts.

If you take their revenue and divide by production ou get a good feel for pricing of the finished product (say yield per tonne)

f17 yield was $6,152/tonne down from $6,252/tonne in F16

Current (average prices) are 5.8% less than FY15

I'd say talk of increased prices is just wishful thinking - chicken is really just chicken after all - winning consumer preference on price.

[couta1]

Not a bad choice Couta. You might have to hold for a bit though, could see it dropping after the dividend payment but it will climb back up. I see the possible low around $1.05, but should stablise after the divvy. I can't see it dropping to that level, I wouldn't be buying for the divvy if I could. The market has given the result a pass grade, otherwise the price would be down on yesterday IMO.

[JBmurc]

Yes back in @ 1.16 ...see if I can make another profitable trade ....good to see some support at these levels

End of the day with 60,000+ more kiwis p.a + tourism growth ...and chicken a increasing favourite food choice .... I'd be very surprised to see
TGH not keep on a slow but steady growth path (well till some mega International BUYs them)

[JeremyALD]

Good to see your confidence guys. I'll wait a few days and see where the SP leads before topping up :)

[Hoop]

TGH failed at 1.21 (1.23) resistance level..and the FY announcement failed to ignite the sharprice to cause a break out....could be the end of another sucker rally, folks.
On the positive side the chart still seems bullish although weakening as the sucker rally dissipates..

See detailed Chart on the Using TA to time entries and exits thread Post #283 (http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits/page19)

[Beagle]

the old 53 week trick eh...fooled some into thinking they'd met guidance but the market overall has voted and seems unimpressed, down 5 cents before the result and 2 cents after it. I'm thinking the shares just like their chicken will be on super special for quite some time. A sustained commodity glut is exactly that no matter how you slice and dice it, just ask the Saudi's or the Russians !

Other than the obvious 53 week trick I wonder if the other beagle has time to go sniffing and digging into their accounts looking for any less obvious accounting tricks, (this hound too busy barking up other trees). Come in Snoopy !