NPX Chart

[Lizard]

Please can Phaedrus or another TA help me with a chart on NPX? Would like to know if TA would suggest it has broken out of that downtrend yet....

Thanks in advance. Liz

[pedro.nz]

http://img.villagephotos.com/p/2005-11/1106317/Npx2.gif

[Phaedrus]

Liz,
If you are talking about the "medium-term" downtrend of the last 3 months, the answer is no, that downtrend has not ended yet.
Trends are assumed to remain in existence until reversed, so NPX would need to make a higher high after a higher low to make a new uptrend and reverse the downtrend. It is still making lower lows and has just made a new lower high.
Sometimes it may be a bit difficult to see this from a price chart nless it is simplified a little. The chart below shows a "zig-zag" plot which ignores any change of less than 5%. You can easily see that this gives a continuing succession of lower highs and lower lows. A downtrend.
http://img.photobucket.com/albums/v418/789456/NPX1113001.gif

[Lizard]

Thanks Phaedrus/Pedro,

It looks like a dumb question now you've posted the charts like that...

I guess, from the FA side was expecting the downtrend to last another 6 months minimum and get back below $3.80, which still looks possible. Though a possible move of head office to Australia complicates things.

Unfortunately, I still have some NPX that I wish I'd sold earlier - the initial profit downgrade and suddeness of the fall caught me out - by the time the "bounce" came, it was so far down I decided to wait it out...

[Lawso]

I would have patience with this stock. NPX is one of the few on the NZX with significant truly international operations. Well managed and a world-class operator in its specialised fields. The annual report gives Australia 39% of projected total business, Europe 28%, NZ 13%, Asia 10%, Americas 10%. Unfortunately the next dividend, payable in April '06, will probably be the last to carry full imputation credits for kiwi shareholders and that could offset any s p recovery over the next six months.

[Phaedrus]

After giving a trendline-break Buy signal on 30/11/05, todays sharp rise takes NPX into a "medium-term" uptrend. (So long as the Close is above $4.30)
http://img.photobucket.com/albums/v418/789456/NPX122b002.gif

[Lizard]

Thanks for the chart Phaedrus. You'll be relieved to know that even I had managed to figure it needed to break $4.30 for the uptrend. Expected it to happen yesterday, but of course it waited till I was out today.

[8D]

[Phaedrus]

[u]Traders Section.</u>
Nuplex has been in an uptrend since late last year. Technically, it is still in an uptrend, but there are now signs of weakness appearing.
(1) It has hit obvious Resistance at $6.30.
(2) The RSI uptrend has been broken.
(3) A Class B RSI divergence has occurred. (These are Bearish).
Those that bought on the trendline break last November and selling out about now would be locking in a 45% gain made in just 22 weeks.

[u]Trend-followers Section.</u>
In spite of current short-term weakness, NPX is still in an uptrend. Price action remains above a confirmed trendline, a 7% trailing stop and a 30 day exponential moving average. A price break below any or all of these would constitute a Sell signal for trend-followers and less active investors.

[u]True Believers Section.</u>
(Those that have no exit strategy at all. The 'Buy and Hold' brigade.)
Consider this. As a long-term hold, NPX has been a dog. The current price is almost exactly what it was a year ago. NPX has risen just 80% over the last twelve years. That's around 5% per annum capital gain.

http://h1.ripway.com/Phaedrus/NPX52001.gif

[winner69]

quote:Originally posted by Phaedrus


[u]True Believers Section.</u>
(Those that have no exit strategy at all. The 'Buy and Hold' brigade.)
Consider this. As a long-term hold, NPX has been a dog. The current price is almost exactly what it was a year ago. NPX has risen just 80% over the last twelve years. That's around 5% per annum capital gain.




Phaedrus .... you are not allowed to call NPX a dog ... almost banning from sharetrader material that is

However what you say in your post does highlight the need for exit strategies doesn't it .... if one wants to make excessive returns (above average)

A lot of stocks such as NPX have had a good couple of years .... mainly because of a period of favourable economic / market conditions.

There is a danger that many investors have only the seen the good in NPX because they have only held for the last few years ... and not experienced the full economic cycle that NPX is exposed to .... reason for the 5% annyual returns you mention

Phaedrus ... you use the word 'believer' .... appropriate description because one day (nobody knows when) a lot of the gains made in the last few years might evaporate .... and NPX returns return to long term 'dog' status

Of course mate you are not one of thees believers are you .... you have your exit strategy .... good on you

Great post Phaedrus

[Lizard]

So who are these "true believers"? As far as I know, Snoopy doesn't even hold NPX...

I'm not entirely responsible for the resistance at $6.30, but I did sell a decent wodge there in late March. Probably the rest of the resistance movement was made up of Scotty and Lawso...;) After all, can't expect a nice income share like NPX to keep on trending up at 45% in 6 months... a rather harsh expectation. A return to profit growth is now built into the share price. Higher crude oil prices and lower construction activity are present. A lull in the share price is quite imaginable.

For the "buy and hold" (and don't spend your life watching the market) types, NPX has probably had a gross dividend yield of around 7% across that 12 year period - with a 5% capital gain I'm of the opinion that would still be a better return than the average retirement fund. Better still, the company has actually existed for 12 years - how many companies on the NZX even qualify under that criteria?

For the market-watchers, the periodic uptrends can be quite worthwhile.

I would guess any "true believers" would more than likely consist of the people who believe so strongly in NPX that they are willing to buy on the dips. So in that case, they've probably done very nicely from the uptrends too.

The losers? Fund managers and traders that buy into liquidity and a nice story each time they make an acquisition - and then have to live with the consequences of the sluggish digestion process?

[Lizard]

Oh, and just looking at my 1999 datex, it has eps of 16.91cps for NPX in 1994. The Forbar forecast for 2006 says 49.0cps - a 190% increase over 12 years, or 9.3% pa compound. Perhaps the greater volatility in the share price can be used to make the growth look far worse than it has actually been.

[Lawso]

quote:As a long-term hold, NPX has been a dog. The current price is almost exactly what it was a year ago. NPX has risen just 80% over the last twelve years. That's around 5% per annum capital gain.
You and I must be on different planets, Phaedrus. According to my records NPX closed on 13/5/05 @ 353. Today 625[?] Admittedly it was over $6 earlier in that year, but that was before the disappointing half-year result, due to negative factors which proved to be short-lived. (FBU and others suffered at the same time.)

OK, so I'm a "true believer". I first bought into NPX in May '02 when the price was 320c. I've added @ 525, 490 and 554. Sure, if I was a committed chart watcher I might have bought on lower dips. But my average buy price is 402.5c and my capital gain over four years is 55%, not counting dividend income of around +7%.

I rode out last year's big fall because I knew the company was sound and believed that the negative factors (construction slowdown, high NZ$) at the time were only temporary.

Deride those who "buy and hold" if you wish. I'm very happy with holding NPX. And I don't think anyone who was smart enough to buy this stock in mid-'05 @ way below $4 (and those who bought when I did) would call it a dog.

[Phaedrus]

Lawso, It is only in the last 2 - 3 years that NPX has performed reasonably well. Prior to that it had made no headway at all in [u]9 years</u>!!!!!
As a 1 year hold NPX has been exceptional.
AS a 3 year hold NPX has been reasonably good.
As a long-term hold, NPX has performed very poorly.
Just ask yourself this :- If NPX goes right back to where it came from, are you going with it? Again?

http://h1.ripway.com/Phaedrus/NPX55001.gif

[Lawso]

Some might call me an old codger but I don't live in the past to that extent, Phaedrus. Anyway, if I read your chart correctly, it looks to me like a history of higher highs and higher lows, at least for about the last 10 years.

And I notice you haven't tried to justify your assertion that the current price is almost exactly where it was a year ago.

No hard feelings. I enjoy and (usually) admire your posts.

[Phaedrus]

Sorry Lawso - my mistake. I should have said "The current price is almost exactly what it was over a year ago."
($6.20 on 24/2/05)

You are quite right, NPX has been in an uptrend for many years, albeit a fairly shallow one.

Anyone taking a slightly more active approach to their investing (3 trades in 12 years) would have made significantly more money from this stock than those that simply held over the same term. This is not a high level of activity. Don't think of it as trading - view it as profit protection.

Looked at another way, since 1994 NPX has plunged around 45% [u]three times</u>. Clearly this is quite a volatile stock. To my mind, 45% is far too big a correction to "ride out" - you are giving literally years of profit back to the market.

I don't deride the "buy and hold" approach so long as you have some sort of exit strategy in place. It is in fact the best approach for some stocks.

Not for NPX though.

[Anna Naum]

Looks like the $6.30 resistance line has been well broken!

[Phaedrus]

NPX has now triggered all of the SELL signals posted on this thread 2/5/06. (Exit points are marked by blue arrows) In order, these signals were :-
(1) A break of the 30 day ema.
(2) A break of the confirmed trendline.
(3) A break below previous support at $6.30 (At this point a downtrend had begun)
(4) 7% Trailing Stop hit.
The resistance at $6.30 was interesting to watch as it was overcome, became support, then that support was broken as a downtrend began.
I would think that most trend-followers would be out of this stock by now.

http://h1.ripway.com/Phaedrus/NPX615002.gif

[Lizard]

Thanks Phaedrus. I sold a few more today. They're above my valuation, though not alot, but I think there are better opportunities. Still got a few left - like them for the long term.

[glennj]

Yes thanks Phaedrus. Do find your charts interesting even though I'm not a trader. (Not for tax purposes at this stage & want to keep it
that way at the moment)
I have plenty of NPX accumulated at an average cost of c. $4 so at one level the idea of taking profits is attractive. On the other hand isn't NPX still in an uptrend if you take a longer time frame? Fundamentals, which many ignore, show that NPX is not overvalued. The dividend yield on the original purchase price is approaching 10% so holding isn't a problem. If I sold now chances are I'd be wanting to buy back in before too long.
Can see the point in selling NPX if you are a trader but not necessarily if you are protecting investor status.
How many of you traders are paying tax on your capital gains?

[Phaedrus]

Glennj, You are quite right when you say "Isn't NPX still in an uptrend if you take a longer time frame?" but how steep is this uptrend? Since 1994, NPX has averaged less than 5% pa capital gain. Not too many people would be satisfied with that. Now, let's look at the trade documented in this thread. Anyone buying and selling on the trendline breaks as posted here would have paid $4.25 and sold at $6.30. This is a 48% profit in just over 6 months, equivalent to over 90% pa. It has taken longterm holders years and years to make that much on NPX - and their 2 birds are still in the bush!

"Fundamentals, which many ignore, show that NPX is not overvalued" This is a matter of opinion. I do not consider myself qualified to question that statement, but NPX is now above Lizard's valuation, for example.

The use of charts and/or TA doesn't make you a trader. These things are only tools and in any case you set the parameters that control the level of your market activity. I have "traded" NPX just 3 times in over 12 years, for example.

Footsie and Paper Tiger don't agree with any of this stuff. PT calls it "Lookback in hindsight" and Footsie heartily agrees - "Thanks PT for stating one many miss. Its all hindsight..... Charts are just a map of the past.!!" I would like to see either of these gentlemen attempt to backup this accusation. I posted plenty of NPX charts before, during and after this trade. Anyone, everyone, could follow it as it unfolded. Footsie, charts are just a map of the past, but they enable us to determine the current state or condition of the market and thus make rational buy/hold/sell decisions.

[k1w1]

Phaedrus, on an unrelated point I was just wondering whether in the past week your system tipped you out of and back into any Australian shares which were very turbulent. Its just that my style left me standing nervously still wondering if I had made a huge mistake that I would later regret wheras if I was following your style I thought I would have been out of most of them and then back in later if I had been disciplined enough.

[Phaedrus]

K1w1,
I am in "caution" mode at the moment. While I have been flicked out of some Au stocks, buying is generally proscribed for me at the moment. I'm quite happy to be holding a bit of cash just now.

[glennj]

Phaedrus I know that using charts doesn't mean you are necessarily classed as a trader but to take full advantage of short term trends you probably do need to be a trader.

Back to NPX: I've been accumulating since 1998 and only buy when I consider the price to be value. My software tells me my annualised return using the end of May 06 price & including the cash component of the dividends is 29.7%. This doesn't compare to the annualised 90% you may have made trading the most recent trend line breaks but
I'm satisfied. My system is very low input and I can get away with only spending about 2 days a month on research & portfolio monitoring/updating. Without putting in a lot of extra time which I don't want to do at the moment I don't think I could increase my returns enough to cover the extra 39c in the dollar tax payable as a trader.
I don't only buy and hold but will sell if FA tells me something is way overvalued or that there is something seriously wrong.
Do find your posts thought provoking P. One day I may set up a dedicated trading portfolio & see how I go.

[Deev8]

quote:Originally posted by glennj

I don't think I could increase my returns enough to cover the extra 39c in the dollar tax payable as a trader.


This may seem like splitting hairs, but the extra tax that would be payable isn't 39% of the total annual return. It's 39% of the capital gains part of the return. The dividends, which in the case of Nuplex are not insignificant, are already taxed.

[glennj]

Am aware that it is the capital gain and dividends that are liable to be taxed. The taxing or non taxing of this capital gain is hugely important from my perspective. Hence the desire to stay classed as an investor with the IRD. Sometimes this means I sacrifice short term opportunities because too many buys & sells of the same stock
might have IRD reclass me as a Trader.

Received my tax assessment back today and they confirmed my calculations etc Am treated as an investor; only pay tax on dividends. Don't claim expenses except for research which they allow.

All a bit off topic I suppose. Mind you NPX would look sick if everyone sold at the trend line break.

ps. Yes the dividends are taxed but at 33c. Have to pay an extra 6c tho as part of provisional tax.

[Deev8]

quote:Originally posted by Deev8

The dividends, which in the case of Nuplex are not insignificant, are already taxed.



quote:Originally posted by glennj

Yes the dividends are taxed but at 33c. Have to pay an extra 6c tho as part of provisional tax.


Yes, quite right I was a bit lazy saying already taxed. I should have said the dividends are already taxed at 33%, or carry imputation credits for tax at 33%.

[shasta]

Glennj

Suggest you look at splitting your portfolio into 2 companies one for trading & one for investing.

Gets around the 39% problem & separates out your trading shares etc.

I personally see NPX as a mid/long term type share although ive been out of it for a long time.

[Phaedrus]

NPX has been in a "medium-term" downtrend since it peaked at $6.69 about 2 months ago. There is a tentative trendline in place. (Red)
I no longer hold any NPX, having sold out after a very profitable 6 month trade. (The red arrows mark Sell signals)

NPX would need to take out the old peak (overcoming resistance at <s>$6.90</s>$6.69) to continue the uptrend that began late last year.

http://h1.ripway.com/Phaedrus/NPX76001.gif

[Mothman]

Phaedrus could you please post an updated chart and your opinion on the support and resistance at present.

From what I have observed NPX has been trading in a narrow range for the last few months and probably awaiting some positive or negative news to drive the next move.

[Phaedrus]

Mothman, As you have noticed, NPX has been tracking sideways in a trading range for over 5 months, so far. This is bounded by support at $6.18 and resistance at $6.70. Notice, though, that over this time the On Balance Volume has been rising. NPX is being accumulated. It would not be at all surprising therefore if the eventual breakout was upward (rather than downward). In addition, trading ranges that come after an uptrend (like this one) are generally a continuation pattern - ie the breakout is most commonly upwards.
In the meantime, this is a good stock to be out of - there is no telling how long it will crab sideways like this - and of course there is always the chance that it just might break downwards. Why hold and run that risk?

http://h1.ripway.com/Phaedrus/NPX1015001.gif

[SCOTTY]

What risk? At $6.85 close and being ex divi. this is surely a raging buy. [:p]. A long time since I have charted. However, this appears a clasic rectangle with the breakout giving the future direction. Your guidence on future price would be much appreciated [8D]. Close in Aussie @ $A6.00 = NZ$6.93.

Cheers


quote:Originally posted by Phaedrus

Mothman, As you have noticed, NPX has been tracking sideways in a trading range for over 5 months, so far. This is bounded by support at $6.18 and resistance at $6.70. Notice, though, that over this time the On Balance Volume has been rising. NPX is being accumulated. It would not be at all surprising therefore if the eventual breakout was upward (rather than downward). In addition, trading ranges that come after an uptrend (like this one) are generally a continuation pattern - ie the breakout is most commonly upwards.
In the meantime, this is a good stock to be out of - there is no telling how long it will crab sideways like this - and of course there is always the chance that it just might break downwards. Why hold and run that risk?

http://h1.ripway.com/Phaedrus/NPX1015001.gif

[Deev8]

quote:Originally posted by SCOTTY

What risk? At $6.85 close and being ex divi. this is surely a raging buy.

Just curious Scotty, but is your opinion based on the information available on 15th October when Phaedrus last posted on this thread? In other words are you presenting a different interpretation of the same facts, or are you perhaps looking at more recent events up to last night's closing price?

[SCOTTY]

quote:Originally posted by Deev8


quote:Originally posted by SCOTTY

What risk? At $6.85 close and being ex divi. this is surely a raging buy.

Just curious Scotty, but is your opinion based on the information available on 15th October when Phaedrus last posted on this thread? In other words are you presenting a different interpretation of the same facts, or are you perhaps looking at more recent events up to last night's closing price?

Looking at the last nights closing price which was well above the resistance level. Just wondering what the next target price would be.
P.S. Last nights price. Not todays [B)]
Cheers

[dog]

Still a raging buy Scotty?

[SCOTTY]

quote:Originally posted by dog

Still a raging buy Scotty?

A better buy today than yesterday. [8D]
Cheers

[Lizard]

FWIW, my current valuation is $6.13.

[SCOTTY]

quote:Originally posted by Lizard

FWIW, my current valuation is $6.13.

How many have you got for sale at this price. I am definately interested [:p].

[Lizard]

Hi Scotty. When a stock looks like it will carry on rising, I usually plan to sell at about 20% above my valuation. So when it gets to $7.36, you can have them... provided nothing provokes an increase in my valuation before then. :)

[SCOTTY]

quote:Originally posted by Lizard

Hi Scotty. When a stock looks like it will carry on rising, I usually plan to sell at about 20% above my valuation. So when it gets to $7.36, you can have them... provided nothing provokes an increase in my valuation before then. :)

Hi Lizard.
ABN-AMRO have NPX on a target price of $7.38 (3rd Nov 2006). They also have forecasted Normalised EPS of 79c (pre goodwill amortisation and exceptional items)for FY09. If they are close, your $7.36 could still be good buying. :).
Cheers

[Lawso]

I understand NPX management have appointed an investor relations specialist and is planning a series of presentations to Australian brokers/fund managers. This would have to be positive for the s p over time. Though still based in NZ and with the vast majority of s'holders being Kiwis, only 25% of sales are in NZ, cf. 39% in Oz and 36% in other countries, according to the annual report. The message will eventually get through to overseas investors, esp. Oz, that this is a progressive, truly international business that dominates its sector in Australasia and is rapidly gaining strength in other markets.

I've been in NPX since '02, buying initially @ 320c. I'm looking forward to NPX doing a "FBU" - i.e. double-digit s p by the end of 2007.:) The only downside to this growth overseas is that, unlike the few Aussie s'holders, Kiwis no longer get full imputation credits - only about 40% from memory.

[Lizard]

quote:Originally posted by SCOTTY
Hi Lizard.
ABN-AMRO have NPX on a target price of $7.38 (3rd Nov 2006). They also have forecasted Normalised EPS of 79c (pre goodwill amortisation and exceptional items)for FY09. If they are close, your $7.36 could still be good buying. :).
Cheers



Decided to stick to my plan and sell today at $7.35, even though the price has been firing on good volume. USD weakness and a need for cash elsewhere were contributing factors.

[Deev8]

A strong half year result from Nuplex today.

Nuplex Industries Ltd, the leading manufacturer and marketer of specialty resins and chemicals, today announced an operating profit of NZ$24.6 million for the six months to 31 December 2007, an increase of 60 per cent over the previous corresponding period (pcp).

Net profit increased by 185 per cent and revenue increased by 3.5 per cent to $748 million.

The directors have increased the interim dividend to 20.0 cents per share, up 29 per cent on the pcp, payable on 4 April 2008 to shareholders on the register at 20 March 2008.

The full result announcement is here: Nuplex Industries Limited Preliminary Half Year Result (http://www.nzx.com/market/market_announcements/by_company?id=161139)

[Deev8]

A strong half year result from Nuplex today.And the shares are up by approx 7% at the moment.

http://www.nzx.com/market/security_details/by_security/price_graph?code=NPX

[Lizard]

NPX looking positive? Though alot of the volume seems to be going through in special crossings and not much on depth. Dark Liquidity.

As MacDuffy noted elsewhere, NPX looks a good pick based on value, first half results, exchange rates etc. Though it would be good to see debt pared back in the current environment.

[macduffy]

Market reaction looks a bit overdone to me but that's what happens these days!
I agree it's a good company. I hold a few and may look to add when/if there's a recovery in the SP.

;)

[Grimy]

Bought some today (too soon), will probably be buying some more tomorrow.

[Grimy]

Bought a few more today. I am happy to sit on them for the long haul.

[macduffy]

Any thoughts on NPX @ 3.25 level?

I'm considering.....

It's tempting. But I'm waiting to see some consolidation and recovery in the SP. Means I miss the bottom but sobeit.

;)

[macduffy]

Thanks for that Belgarion, I totally agree with your thinking.

FBU is 60% of my portfolio ATM so I was thinking of bringing NPX in at about 10%. I had placed a bid 15 mins before close @ 3.16 but it dropped to 3.20 and stopped there. I then cancelled and will rethink it overnight. Maybe it'll drop further on opening tomorrow and I'll be there with baited breath.

Cheers

Hi YanKIWI.

NPX at $2-80!
Hard to ignore at these prices but I'm resisting the urge and waiting for that upturn! Can't help wondering if a further profit downgrade is in the pipeline?

;)

[Hoop]

Macduffy, you have more control than I do.

I started my buy-in mid last week @ 3.16, then followed with a second buy-in @ 3.00 Friday.

I nearly bought again yesterday @ 2.80, buy thought I'd hold out for another day or so and see what happens. Be in mind though... online banking is up and running & my trigger finger is loaded ;)

Yankiwi you are buying in a freefall..why?
You are breaking all the investor rules for success.

[AMR]

Hey it's working so far for me, and I haven't invested any money in which I'm not prepared to lose. At least it's not in the pokies or in the casino's vaults.

I'm remaining positive!

Regards :)

Is it? How do you know it works better than chance? No offence intended, just asking.

[winner69]

SST Jenny Ruth gives NPX a bit of rave in todays edition ... article started off positive but got less so as it went on.

Started off with NPX being a beneficiary of falling crude prices but then went on expanding margins don't mean much if global demand tanks .. and then there is all that debt which counts out growth by acquisition

Hell's bells, even a broker downgraded NPX ....Doak and Taylor at MacQuaries downgraded NPX from 'neutral' to 'underperform' .... things can't be too bright if these individuals who are generally optimistic as hell do something like that

[winner69]

winner, could you post links please.

My overall view is that this is a good company but with too much debt. While lowering oil price would help then if they were selling plenty of product; i doubt they are at present. Meanwhile they continue to have to pay interest bills while their products are selling less and the margins are squeezed by the low oil price and consumers will be lowering their inventories. Like FBU ... one to be very wary of until the next result, or market guidance, is published.


You'll have to go down to the shop and buy a copy Belg

A gree with you thoughts

[winner69]

Oh dear ... a 'carefully' worded announcement which in effect ia a double downgrade

Half one guidance now has EBITDA at $42m - down from $45m-$50m they said in November .... not too bad

BUT now H2 is 'in line with H1' ..... ie EBITDA of say $42m -- lst November they said about $60m ..... whoops .... things are getting messy around the world ..... and even though they didn't say so prob a bit of optimism in this figure as well.

So full year EBITDA about $80m -- down from $110m they said a few months ago.

This $80m EBITDA is about $25m NPAT or EPS 30 cents .... so 270 is still a PE of 9 which is where good old fashioned chemical companies normally trade in good times

So expect some more price weakness over the next few days ..... surely not 200 ... but possible

Isn't it amazing that mean things get bad companies come out with short altogether not too clear announcements .... rather than the rave they come out when times are better

Sign of the times I fear ..... why even bother contemplate buying things like NPX at the moment .... wait until the bad times are well and truly over.

[winner69]

I'm tempted too but are watching FBU as NPX and FBU activities are somewhat related. ... When FBU turns, NPX should be good for a few bucks but so will FBU

http://finance.yahoo.com/q/ta?s=FBU.NZ&t=2y&l=on&z=l&q=l&p=m50,e100,v,b&a=r14,r14,ss&c=npx.nz

What you say now Belg ..... NPX ann not good for FBU prospects?

[winner69]

Looking at the NPX chart this is another case where Phaedrus would say never never buy into a downtrend .... no matter how good the the fundamnetals look

DB site still has PE of 5 ... dirt cheap for one of NZ good companies eh .... now we know why

Huntleys say UNDER REVIEW ..... maybe a SELL coming up

[Phaedrus]

Looking at the NPX chart this is another case where Phaedrus would say never ever buy into a downtrend .... Indeed! $7.75 to $2.58 in 15 months and still falling.....



Huntleys say UNDER REVIEW ..... maybe a SELL coming up Timely advice eh? What methodology do those guys use!


Spare a thought here for the poor fundamental analysts whose invstment decisions and timing are based primarily on company reports. You can see just how misleading they can be and how tenuous their relationship to subsequent shareprice performance.

I find it intriguing that such good reports were preceded by bigger price rises than those following the announcements. In fact, the excellent August result was followed almost immediately by a downtrending shareprice. Perhaps the news was anticipated and already built into the shareprice with exquisite accuracy. Perhaps it was common knowledge before the announcement. Perhaps the market was disappointed because even better results were expected. Perhaps this is evidence of insider trading. We will never know the reasons, but whatever they were, technical SELL signals were already firing and an on-going downtrend ensued.

It is fashionable on these boards to scoff at the perceived "foolishness" of the "Market", portraying it as a mindless herd of sheeple, a bunch of lemmings, emotional, over-reactive, irrational, manic-depressive. Never forget that collectively, the market knows all that is knowable about a stock. It sure knows more than any of us! To ignore or deride the market's assessment of the worth of a stock is very foolish in my opinion.

While NPX has been a disaster for fundamentalists, technically this is a very well-behaved stock with nice tidy reversals and clear secondary "medium-term" uptrends. The indicators shown here gave good agreement, with their buy signals marked by green arrows and sell signals marked by red arrows. There have been no buy signals for 6 months now and there is no sign of any being imminent.

http://h1.ripway.com/78963/NPX25.gif

[winner69]

.... It is fashionable on these boards to scoff at the perceived "foolishness" of the "Market", portraying it as a mindless herd of sheeple, a bunch of lemmings, emotional, over-reactive, irrational, manic-depressive. Never forget that collectively, the market knows all that is knowable about a stock. It sure knows more than any of us! To ignore or deride the market's assessment of the worth of a stock is very foolish in my opinion.



Well said Phaedrus

At the ORI AGM the other day the chairman said ...."In your board’s opinion the Orica share price presently does not reflect the strong fundamentals of the company. It underestimates the long term value of our assets; the strength of our balance sheet; our growth potential; the breadth of our business portfolio and its relatively low exposure to commodity price fluctuations.'

But give the man credit he did explain the fall in the shareprice ....'The market’s view of value has changed over the year'

Right on .... and how do you monitor the 'markets view of value' (in most cases a decrease in multiplies and increased investors risk aversion) by watching the charts of course

In the case of NPX it is a conbination of falling profits (doesn't apply ... so far .... to ORI) but that change in 'markets view of value' that has caused the NPX shareprice to fall as much as it has ......... and as Phaedrus demonstrates it has been slowly unfolding before our eyes on the NPX chart

AS Yogi Berra once said 'you can see a lot just by observing'

[winner69]

$2.05.. Where will it stop?

I'm sure glad I sold out @ $2.85 at a 5% loss :o

I'll be watching NPX for a turn and then get back in.

Just surprised it has taken so long after the announcement to get down to about 200 .... more downside I fear

[Dr_Who]

Just surprised it has taken so long after the announcement to get down to about 200 .... more downside I fear

I agree with ya Winner

[beacon]

All chemical firms currently taking a beating - even global conglomerates - but below $2 NPX is better value than DOW, unless I don't know something the market does. Oversold I think. Have you applied the Altman test to NPX winner?

[bull....]

Looks like sub 1 dollar soon , may be a candidate for govt bail out too.

Dont know where nz will get all the money for these bail outs , maybe they better get ready for some quantitive money printing.

[warthog]

Looks like sub 1 dollar soon , may be a candidate for govt bail out too.

Dont know where nz will get all the money for these bail outs , maybe they better get ready for some quantitive money printing.

It's quantitative easing.

NPX is "distressed" and in line with FPA for assistance if the bankers aren't happy. The hog will be surprised if the bankers are happy, and will be further surprised if NPX qualifies for government money.

[Nevl]

Both NPX and FPA could easily raise money through a Bond or Pref share issue offering a decent rate of return. Fonterra raising 700mill shows that they can raise the funds. Both have offshore debt but also offshore income. The problem is that for accounting purposes they have to balance the books in NZ$. FPA and NPX should tell us their debt and income in US$ and Euros and see if that looks sustainable.

[macduffy]

I'm not saying that they can't raise funds but there is a big difference between the financial strength and credit rating of Fonterra and that/those of FPA and NPX.
But I certainly don't know enough about those companies assets/liabilities and earnings in the various currencies to really make a call on this.

[winner69]

I'm not saying that they can't raise funds but there is a big difference between the financial strength and credit rating of Fonterra and that/those of FPA and NPX.
But I certainly don't know enough about those companies assets/liabilities and earnings in the various currencies to really make a call on this.

One thing not in NPX's favour about having a notes issue is that there is already $50m of them out there ... and punters view of NPX is such that people are selling them at a 20% yield which makes it unlikely they could go to the market and ask for more (re NPX020 9.3% 2012 jobs)

Problem really for NPX is that with the shareprice being slaughtered their market cap is now only $120m with bank debt of $350m and capital notes of $50m owing

[winner69]

Both NPX and FPA could easily raise money through a Bond or Pref share issue offering a decent rate of return. Fonterra raising 700mill shows that they can raise the funds. Both have offshore debt but also offshore income. The problem is that for accounting purposes they have to balance the books in NZ$. FPA and NPX should tell us their debt and income in US$ and Euros and see if that looks sustainable.

One of the big problems facing corporate Aust and NZ is that in 2009 are over $55 billion of overseas borrowings to be refinanced or paid. If overseas banks are not willing (or can't) to invest in this part of the world the experts say that Australian banks couldn't manage to finance that much .... maybe it is a case of first in first served or the strong get what they want or the weak fail

[beacon]

Survival of the fittest has always been the case. 2009 is not the problem it seemed last year, as the big four have already raised over half (probably close to 75%) of the funding required for the year.

[winner69]

I really didn't believe that NPX would fall much further .... but down 14% or 20 cents today ..... and ended the day on a low as well which is not good ... and quite a few shares changed hand

Market cap now just over $100m .... it wasn't that long ago they were buying things in excess of $200m ....

Things must be pretty dire

[Jim]

Would you dare to catch a falling knife ?????

[Dr_Who]

I really didn't believe that NPX would fall much further .... but down 14% or 20 cents today ..... and ended the day on a low as well which is not good ... and quite a few shares changed hand

Market cap now just over $100m .... it wasn't that long ago they were buying things in excess of $200m ....

Things must be pretty dire

Does anyone have a valuation on NPX?

How much debt do they have?

[winner69]

Some play money at $1 ..... only hope some buyers near the end of the day .... reckon at least what analysts put on them ... $4 plus

[winner69]

Does anyone have a valuation on NPX?

How much debt do they have?

Bank Debt last accounts $350m plus capital notes $50m

Book Value $365m so if trading at BV worth $4.42 ... hows that for a valuation

Just shows you how distressed punters think NPX is

Might need to keep my $1 shares eh

[winner69]

Some play money at $1 ..... only hope some buyers near the end of the day .... reckon worth at least what analysts put on them ... $4 plus

30% plus in 2 days not to be sneezed at ... pity only some play money ....

[Dr_Who]

Good trading Winner.

Who dares wins!

[paul29]

Rights offer coming up soon

If an equity raising is conducted the Company expects it would include a pro rata
entitlement or rights offer to eligible shareholders. The securities issued under any pro
rata offer would be ordinary shares having the same rights as the existing ordinary
shares of the Company.

[macduffy]

There was a time when a rights issue was good news with value to the shareholder.
Sadly, an issue today usually means that the company is in a bit of strife and the SP gets driven down.

[Dr_Who]

When a company has its second downgrade burdened with huge debt usually means one way slide for the sp, esp when there is a rights issue coming up.

[bull....]

And generally the rights issues are heavily discounted in this environment so if you own shares your be heavily diluted.

[Xerof]

Only diluted if you don't take up your rights

[Voltaire]

WDT will be an interesting test case in the current climate - the rights expired 5pm tonight. I'm not anticipating a high uptake but we'll see. Following the WDT rights issue the SP quickly migrated to the exercise price (10c) and wallowed there.

Rights issues are a risky endeavour when cash is short. Price dilution aside, many people simply don't have spare cash to pour into companies that have already cost them dearly; if they do have spare cash there is no shortage of equally compelling companies also trading at discount rates.

Disc. hold WDT and associated (expired) rights

[Grimy]

Okay, so I bought wayyyyyyyy too early into this one!
Still keen on the company and at around a dollar I am almost ready to jump in again (but that goes for a few companies I'm in at present).
Only thing holding me back is that niggly fear that things could get worse...........
Am trying to keep a reasonable level of cash for purchases once that queasy feeling of making a huge mistake diminishes somewhat!

[Phaedrus]

Okay, so I bought wayyyyyyyy too early into this one!
At around $3.40, you sure did! Specifically, what was it that actually made your buy too early, though? The fact that NPX was still in a downtrend.


At around a dollar I am almost ready to jump in again - Only thing holding me back is that niggly fear that things could get worse........... Mere emotion, Grimy, feelings. I would have hoped that what was holding you back would be facts like the on-going downtrend, falling OBV, and absence of any Buy signals! Who knows how low NPX will go?


Am trying to keep a reasonable level of cash for purchases once that queasy feeling of making a huge mistake diminishes somewhat!Good on you for keeping your powder dry, but making investment decisions on the basis of the presence or absence of nausea is hardly an objective system! Why not wait until NPX stops falling?

Grimy, You are not the only one who bought into NPX's current downtrend. At $3.10 Yankiwi made the same mistake. Look at what happened, though. You bought "happy to sit on them for the long haul" and so continued to hold - even though the "long haul" was steadily South. As a "Buy and Hold" investor, at $1.05 your purchase is now worth barely a third of what it was just 15 months ago.

By contrast, Yankiwi quickly recognised that he had made a mistake (the shareprice continued on down) and because his stoploss was hit, he exited. He made a 5% loss versus your 65% loss.

Grimy, It would be good if you could benefit from this experience. I would like you to learn the importance of NOT buying into downtrending stocks, and see the importance of using some sort of "stoploss" to limit your losses when you do get it wrong - as we all do, on occasion.

At the time, Yankiwi was quite happy to be buying into a downtrend and I would hope that he, too, would now see the folly of this. Hoop did question his actions at the time.

I'll post an updated chart. Note the ongoing downtrend, the steadily falling OBV and the absence of any Buy signals.

http://h1.ripway.com/78963/NPX38.gif

[winner69]

Indeed! $7.75 to $2.58 in 15 months and still falling.....


Timely advice eh? What methodology do those guys use!


Spare a thought here for the poor fundamental analysts whose invstment decisions and timing are based primarily on company reports. You can see just how misleading they can be and how tenuous their relationship to subsequent shareprice performance.

I find it intriguing that such good reports were preceded by bigger price rises than those following the announcements. In fact, the excellent August result was followed almost immediately by a downtrending shareprice. Perhaps the news was anticipated and already built into the shareprice with exquisite accuracy. Perhaps it was common knowledge before the announcement. Perhaps the market was disappointed because even better results were expected. Perhaps this is evidence of insider trading. We will never know the reasons, but whatever they were, technical SELL signals were already firing and an on-going downtrend ensued.

It is fashionable on these boards to scoff at the perceived "foolishness" of the "Market", portraying it as a mindless herd of sheeple, a bunch of lemmings, emotional, over-reactive, irrational, manic-depressive. Never forget that collectively, the market knows all that is knowable about a stock. It sure knows more than any of us! To ignore or deride the market's assessment of the worth of a stock is very foolish in my opinion.

While NPX has been a disaster for fundamentalists, technically this is a very well-behaved stock with nice tidy reversals and clear secondary "medium-term" uptrends. The indicators shown here gave good agreement, with their buy signals marked by green arrows and sell signals marked by red arrows. There have been no buy signals for 6 months now and there is no sign of any being imminent.

http://h1.ripway.com/78963/NPX25.gif

That was a great post Phaedrus .... esp about the increased activity leading up to announcements which were positive (and not that long ago either) and then since the August announcement its all been downhill with no buying interest at all accordinging to the OBV

I wonder if there has much churn in the NPX share registry .... did all those who made money in the past sell out to the bargian hunters ..... or are all the big players holding out through think and thin (have to invet in something don't they) and hoping they don't have to front up with too much more in the near future

Charts are intrigiung eh .... they do tell a story eh .... even to the extent of signalling bad times before the world is told about them

Even a fundamentalist would probably be out of NPX a while ..... a key component of fundamental analysis is an understanding of the environment that the company operates in and there was enough signs to soud a warning ..... then there was the fundamentals of the global financial markets and consideration of how that would affect a company like NPX .... and on asset valuations generally ..... at the time of reconfirming that things were not going to be too good (November) the EV/EBITA multiple was about 10 times (pretty rich ven in the best of times) ... so little wonder the share price drifted to about 240 before the real bad news came out ..... and then iit was 7 times EBITDA which these days is pretty high as well ........ and in vie of the immediate earnings outlook for NPX and the risk aversion of most investors about $1 is fair enough .... stilll an EV of $0.5billion on EBITDA of $80-90M (being optimistic here as well) .... would those who think NPX is cheap front up with $0,5 billion to buy them?

Fundamental analysis (as Phaedrus points out beyond what you read in company reports and announcements) gave plenty of warning signals ..... and the charts confirmed all these ..... pretty powerful force iis FA and TA in tandem

[Grimy]

Mere emotion, Grimy, feelings. I would have hoped that what was holding you back would be facts like the on-going downtrend, falling OBV, and absence of any Buy signals! Who knows how low NPX will go?

Good on you for keeping your powder dry, but making investment decisions on the basis of the presence or absence of nausea is hardly an objective system! Why not wait until NPX stops falling?

Grimy, It would be good if you could benefit from this experience. I would like you to learn the importance of NOT buying into downtrending stocks, and see the importance of using some sort of "stoploss" to limit your losses when you do get it wrong - as we all do, on occasion.


Thanks Phaedrus. I understand and agree with all your points. I think to pay a bit too much for a good company is neither here nor there. But I agree that to buy the same company at the lowest price (or thereabouts) is better! I just have to sort out good companies and pricing and I'll be away!
I have no experience with charting. The closest I get is a spreadsheet updated weekly of the companies I am interested in-and believe me, that spreadsheet has kept me out of the market for a while. Basic charting I guess.
Although every $ is important to me, I can't help treating this as a hobby as well (which means I know that I should have better systems, etc). If I didn't enjoy doing a bit of reading, etc. on companies and investing as a whole then I'd be better off leaving my money in a bank, or spending it. I consider my bad investment decisions to be similar to buying something at a store that I later find out to be not what I want, or need, or it turns out to be c**p. I just try to learn from the experience for the next time.
I know I need to learn a lot more!
One question....since when has nausea not been a quantifiable indicator/tool!!
Cheers.

[Phaedrus]

See how effortlessly W69 combines fundamental and technical analysis?

Where is the conflict?

Why the interminable petty squabbles?

It is foolish to restrict yourself to one or the other.

Use both!

Read the book "What Works on Wall Street". The author (James P. O'Shaughnessy) found that strategies combining value and momentum work best, outperforming both technical and fundamental approaches used alone.

[Grimy]

Thanks, will look it up.

[Phaedrus]

YK, there is an old saying that you have probably heard - "Cut your losses and let your profits run". In practice, many inexperienced investors do exactly the opposite. They sell their winners, hold on to their losers, and kid themselves that they are making a profit. Mention the losers and they will tell you: 'I'm hanging on to them until the price comes back.' What's worse, by selling their winners and hanging on to their losers, they have created a system that will automatically ensure that they end up holding a portfolio of losers.

You seem to have mastered the first bit (that's the hard part that most everybody has trouble with!) but have chosen to cap any profits that you might make.

Consider these two scenarios :-
(1) NPX runs as high as $1.34 and then goes into a slow steady inexorable downtrend. Your system as stated would keep you in NPX until you had turned your 30% gain into a 7% loss - at which point you would sell.
(2) NPX goes into a slow steady inexorable uptrend (climbing all the way back to, say, $6) Your system has you selling out at $1.35. This would cause you a LOT of anguish, believe me!

We can only take what the market will give us, YK - and a "target sell price" doesn't qualify as an exit strategy.

[winner69]

I bought a few NPX to re-enter @ $1.04 on close Tuesday 3rd. First thing Wednesday morning I set a stoploss @ $.97 and have a target sell price of $1.35 :rolleyes:

With these parameters in place I stand to lose 7% or hopefully gain 30%. I can live to trade another day with a negitive outcome or be very happy with overall possitive NPX results. <fingers crossed> :D

Yankiwi - well that was a short trade unfortunately but Phaedrus pleased you had a stop at 97 even though you had to go to 96 to sell

I sense you are really keen on NPX and that you will be tempted to have another go ........ soon?

[winner69]

.



Asking for the receivers opinion... hmmmm


Thats a bit mean mate but as McGrath Nicol pride themselves in CORPORATE RECOVERY who knows ..... pretty impressive list of 'clients' listed on their website

[Ish]

You sure are right there Winner, a short trade indeed. I was picking there would be ample support at $1.00, but was wrong there once again.

Yes I do like NPX. I fell they are a solid, well managed company. I'm sure I will have another go with them, but this time I'll leave the guess work to someone else and wait for the trend reverse. It'll happen and IMO that time isn't to far off.

I'm not going to cry over spilt milk, I knew the risk before buying. At that time I thought the risk was worth it. :rolleyes:

On a happier note, tonights keno draw has given me another $500 to play with.:D(and only 1 number off 20K:rolleyes: and 2 numbers off 100K:rolleyes::rolleyes:)

Oh well.. time to go hunting again :D

I hope you arent planning on buying $500 worth of shares.

Unless you are a complete newcomer and are just wetting your appetite & stimulating your interest in shares.. any profit you make will be eroded by the brokerage fees.

I'm sure thats not the case but just saying!

[STRAT]

$1.05 to $1.70 - a 62% increase would be a meaningless move? :rolleyes:

The opposite actually Yankiwi. It would mean its time to keep a close eye on it :D

[Dr_Who]

Geez big Mr Market fought back in the arvo ... Not me! Who was it and why?

Short covering by the hedge funds?

NZ market has no liquidity and market can be easily manipulated by the funds.

[winner69]

Not me this time :D

Maybe the tide has turned and you should go all in Belgie ;)

Must piss you off a bit though yankiwi seeing your cash go down the gurgler so quickly .... and then seeing the share price recover the next day .... but stay disciplined

Phaedrus would have said don't buy into a downtend in the first place ..... maybe that is the lesson this time around

Nothing essentially wrong with NPX at the moment except they are in trouble with the bank ... and that is not a good place to be is it .... and more often than note it is shareholders who either lose out or need to put more cash in.

After the inevitable capital raising is the time to be buying into NPX ... if they accept the fact it doesn't pay to be highly leveraged and sort that out in a decent way than a fair value will eventually come.

To do it properly (once and for all to steady the ship) they need to raise at least $150m ... if not $200m ..... and with only only a market cap of $85m that will be some effort eh ... but desperate times I fear

Even with new shares at $1 after all the kurfuffle book value would be over $2 and with a solid balance sheet and even in down times still making money no reason that it shouldn't get back to book value at least in due course.

So yankiwi ... wait for the capital raising .... new shares at a $1 or less .... a lot of NPX problems disappear and new shareholders can benefit heaps

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10561930

http://www.directbroking.co.nz/directtrade/dynamic/announcement.aspx?id=2185486

Nice ... Strangely friendly bankers ... and NZ First too.


Thats why NPX prob is worth a punt once the dust settles ..... wished they had gone for a bit more though to get the pain over once and for .... $110m not quite enough in my humble view

[Jim]

In the 2ZB in the Larry Williams talk show was saying that it could be between $0.40-$0.50 cents a share. A big dilution from the closing price of $1.07

[winner69]

In the 2ZB in the Larry Williams talk show was saying that it could be between $0.40-$0.50 cents a share. A big dilution from the closing price of $1.07

Yes indeed ... inevitable dilution when raising $110m when your market cap is only $85m.

Be interesting how much the 'placement' brings in and what discount the punters want

But heck Jim ... at 40 cents thats another 275 million shares and there are only 80 million odd now .... surely not but times are getting desperate eh.

Watch this space ... could be some fireworks

[shasta]

In the 2ZB in the Larry Williams talk show was saying that it could be between $0.40-$0.50 cents a share. A big dilution from the closing price of $1.07

Jim

Have a look at what happened with TSE (ASX).

Huge discount from previous closing price, but required to get the funds...

[macduffy]

Jim

Have a look at what happened with TSE (ASX).

Huge discount from previous closing price, but required to get the funds...

Yes, the TSE issue at $1-25 was a good buy for those who picked them up shortly thereafter at a bit above that level.

If the NPX issue price is similarly discounted they will look similarly attractive, IMO. NPX remains a good business, suffering from debt indigestion brought about largely by foreign currency borrowings blowing out in NZD terms.
TSE had the same problem.

[winner69]

Yes, the TSE issue at $1-25 was a good buy for those who picked them up shortly thereafter at a bit above that level.



..... agree with you there macdffuy

[New Jersey girl]

I have been watching this as I only sold out a third of my holding at $6+, and am suffering from buying the rest years ago at $3.50 or less. Somewhat keen to hold more.

I don't get the foreign debt question. Their March 16 statement suggested their debt is largely in Australian dollars, with only a few capital notes in $NZ. We have not depreciated against the Australian dollar very much, and in any case as the NZ/AU is at the bottom end of a 20 year trading range it seems unlikely that it will decline further. The asset base is largely offshore too - and a good chunk is outside Australasia, so appreciating against the $A dollar. So why are debt covenants such an issue? It does not seem to be the case that the company has tons of $US or euro debt, which could cause problems given the depreciation of the $A and $NZ in the last 9 months. It could be the case that someone borrowed too much from citibank, and now is suffering fromtheir Australasian retreat.


One wonders if this would be a problem if the accounts were in $A? One wonders what the Chief finance officer has been paid for in the last few years? Even though I am hoping the share price will rise from the march 15 $1.07 level - there could be someone out there that thinks Nuplex is a bargain at $1.50, and sees this as a golden opportunity to get a serious chunk of the company cheap, something they can't do by picking up the odd hundred thousand shares from panicked sellers on the market - having to sell quantities of new shares cheap because one borrowed inthe wrong currency is not consistent with a CFO job done well.

NJG

[winner69]

Kinda agree Winner. The amount raised is betting that the global recession will end towards the end of the year.

Macquaries Lyall taylor agrees with us Belg ..... he suggests that they should have gone for another $50m-$75m to avoid the risk of going back to shareholders with their hands out again ..... about the same amount that i thought they needed to raise .... but things are pretty stressed and with a market cap of $85m at the time of the announcement all this is pretty embarassing for them

http://www.stuff.co.nz/business/2270321/Will-Nuplex-have-enough

[winner69]

LOL - Look at us vultures circling ... NPX must be pleased ... Lets see the outcome of the book build and placement first tho (and Im watching very closely as HBY may need to do the same).

Hope you not implying that vultures are horrible mean people here belg .... fact of life that soon is probably one of the best times ever to become a NPX shareholder

[winner69]

Not looking too good

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10562203

Whatever massive wealth destruction coming up for current shareholders

[bull....]

When trading resumes looks like a massive fall coming either way.

[warthog]

Refer the hog's scribbles of late:

http://www.sharetrader.co.nz/showpost.php?p=244312&postcount=77

Bankers: scrambling to lend you money to buy an umbrella when the sun is shining but won't lend you a dime when it starts to rain.

[winner69]

7 for 1 at 23 cents will make an interesting return to trading after the halt

[Dr_Who]

7 for 1 at 23 cents will make an interesting return to trading after the halt

You think it is worth a trade at these levels?

[Anna Naum]

Pity they do not emply more people in NZ....then the Govt could bail them out

[warthog]

The ship is taking on water.

[Dr_Who]

It is funny how it comes out on the news and not the NZSE.

[The BOWMAN]

Sounds like a horrible plan to raise money. I think the market value of the current shares will be close to 23c today after opening. This will undermine the rights issue a lot and the whole thing will get even worse.

[Lego_Man]

Trading halt extended...

[bull....]

Lets hope they go for a big capital raising in the 100s millions instead of 110m , when they are in this position better to go for broke than go broke.

[The BOWMAN]

i take it not many of you guys work in the markets. i warned you not to touch this ****. there is not a lot of money floating around at the moment and its going to be hard to convince anyone to back this rights issue at the moment (especially at the scale required to save the company). banks are in control now. maybe govt will bail out - ala air nz. who knows? why take the risk? easier ways to make money.

buy fph you mugs.

um, really intelligent stuff.

[Lego_Man]

buy guns, gold, land, and a chinese language tutor you mugs.

Fixed.....

[whatsup]

I take it "smoking-----" that you do work in the finance sector, please enlighten , Newplex has been around for a generation and doesnt desirve to go down so completely , isnt there any support for this industrial heavy weight???

[whatsup]

Look at todays trades after the ann?

[The BOWMAN]

ah just saw the announcement - instos underwriting (so company will survive) - will collect the underwriting fee so their effective cost of participation will be far lower than the entry price for you guys. This is real gun to the head stuff - its bad but looks like they will survive.

Are all instos people as uninformed and slow as you?

[Xerof]

It's what I would call a free lunch......

[macduffy]

ah just saw the announcement - instos underwriting (so company will survive) - will collect the underwriting fee so their effective cost of participation will be far lower than the entry price for you guys. This is real gun to the head stuff - its bad but looks like they will survive.

Now that's the line that I would expect the underwriters to take to talk down the uptake by shareholders!

The market, however, seems to think they are a steal at 23c so there ought to be a couple of cents worth of value in the rights. I wouldn't like to see it left there for the underwriters.

[stevo1]

Having read the statement to NZX (still in trading halt on ASX) with all the inherent world economy risks ,decreased demand etc etc etc and the fact they have $371mill debt (currency not denominated but I assume $AU)they are going to raise NZ$132.8 why the hell would anyone want to pay 55cps to own a debt obligation of 1.61? (for the 7 entitlement shares)= total of $2.15 for 8 shares.
When after the raising 8 shares at 23cps will possibly cost $1.84 assuming market at issue price.(of course there is no guarantee they will trade at 23cps)
(NPX will still owe AU$263mill not including capitol note redemption for cash or further dilutive shares)Stil further dilution with shares to NZ First capitol.
All seems pretty messy and uncertain.to me.

http://www.nzx.com/markets/NZSX/NPX/announcements/4879972

[Lego_Man]

The underwriters can smoke my totem pole.

I cant wait to inject more capital, after paying 5.30 for my existing shares...

:eek:

[bull....]

if you buy now you have to hope the price after rights issue is more than 23c.

Anyone wish to assume the price after rights issue.

[Dr_Who]

Anyone know the theoretical value of the shares once rights starts trading?

[whatsup]

Dr, approx.28c

[Dr_Who]

Dr, approx.28c

Thanks whats up.

Whats is the formula to calculate the rights?

[The BOWMAN]

Well, if ASB Securities forecast is anything to go by, it is estimated that EPS for 2009 is 28.7 cents. After the rights issue, that becomes 3.6 cents per share. Hardly impressive even if the rights are valued at 0 c.

[bull....]

Based on a last sale price 50c the shares should trade at roughly 27c ex rights with rights trading roughly around 3c .

Sound right to anyone?

[kura]

Based on a last sale price 50c the shares should trade at roughly 27c ex rights with rights trading roughly around 3c .

Sound right to anyone?

Sounds about right to me

Reccomend a read of todays NBR article, about what a good deal the underwriters got for themselves !

[Nevl]

NPX has to be a takeover target at these prices!! Would be a shame though, but still Du Pont or Dow or one of the German companies would be looking ithink.

[Thumpa]

The NZD has re-bounded over 10% upwards in the last week.
Any USD debt is now reduced 10% in NZD terms allmost overnight
Typical Shylock banks have forced NPX to do this at their most vunerable moment.
Why weren't the banks recommending hedging at the time? They certainly had no problem lending then.

[kiwi_on_OE]

One positive from this is that at least raising the capital from existing shareholders allows them to retain ownership in the same proportion as they do now, if they wish. If it turns out to be successful and the company ends up over-capitalised in a year or two, then they can always do a share buy-back from the shareholders to return the cash issue capital to them.

If outside shareholders had come along, put in $130m for a 3/4 share of the company (proportion is debatable, but it would've been large), and the company subsequently recovered existing shareholders would not have been too happy to have only received a fraction of the recovery. Although having said that, I suppose any sort of positive return would be accepted.

Note shareholder displeasure with Rio going to Chinalco to raise capital and not existing shareholders.

I'm not saying that it will/won't return to previous profit levels etc. The decision to go to existing shareholders could be viewed as the instos not being interested so the board went to existing 'mug' shareholders for the cash, alternatively that the board decided to do the right thing for existing shareholders. I'm sure there will be views on what fellow contributors think about the NPX board.

As to a solution to prevent this happening in the future to NPX and others. My thoughts are that companies could have outstanding options, exercisable at the discretion of the board. This would allow them to get capital into a company when required. Effectively an insurance policy on the companies capital requirements.

[macduffy]

As to a solution to prevent this happening in the future to NPX and others. My thoughts are that companies could have outstanding options, exercisable at the discretion of the board. This would allow them to get capital into a company when required. Effectively an insurance policy on the companies capital requirements

QUOTE.

The problem is that an option has to have a pre-determined exercise price and anything remotely "reasonable" that was set a year or more back would probably have been in the $4- $5 range.
No one would be taking them up at such a price these days - the options would be well out of the money.
You'd have the same problem with warrants such as Infratil's.The odds are that the the strike price would be far in excess of the existing SP.
The sad fact is that NPX's borrowings in foreign currencies have blown out as a result of the weakness of the NZD. What looked to be prudently hedged by receivables in the various currencies has been inflated in translation to NZD and caught on the hook of banking covenants. It's also happened to a lot of Aust companies.

[Anna Naum]

NPX has to be a takeover target at these prices!! Would be a shame though, but still Du Pont or Dow or one of the German companies would be looking ithink.

A look at both Du Pont and Dow suggests they have problems of there own!!

[kiwi_on_OE]

macduffy - they key to my solution is that the 'options' are exercisable at the discretion of the board, not the holder of the 'option'. Obviously 'option' is not really the right word. So yes, the price might be $4-5, and the holder would be well and truly screwed at the current market price. Holders would obviously want some return to compensate them for the risk, maybe they could receive dividends, or some portion thereof. Similar in concept to Lloyds Names. They receive annual premiums for providing insurance, if they ever need to pay up they could lose thousands/millions - whatever they put up as insurance.

I haven't followed the details of the NZD on NPX debt, sounds similar to FPA. Would be interesting to hear mgmt/board reason that they didn't hedge their shareholder funds into foreign curr. In the case of FPA and other exporters, they've got exactly what they wanted with the NZD, so not a good show that it's ended up screwing the balance sheet/company.

[macduffy]

Hi kiwi.

What you're describing is basically an uncalled liability on a share.
Now these have an unfortunate history, going back to the Standard Insurance debacle in the 60's when a solid Dunedin insurance company was undone by its rogue Sydney manager. I forget the details but shareholders lost not only the 4 or 5 quid that the shares had been selling at but also another 10 shillings a share, I think it was, as the shares were partly paid and the call was promptly made. I remember it well, having acted in a very junior capacity for a holder.
Currently, of course, we have the horrendous position of BrisConnect ( I think that's the name ) unitholders in Australia who not only hold practically worthless units but are up for two further calls which threaten to bankrupt a very large number of people to the tune of millions of dollars.
I don't see too many shareholders being interested in uncalled libilities for a long time to come.

[Balance]

Hi kiwi.

What you're describing is basically an uncalled liability on a share.
Now these have an unfortunate history, going back to the Standard Insurance debacle in the 60's when a solid Dunedin insurance company was undone by its rogue Sydney manager. I forget the details but shareholders lost not only the 4 or 5 quid that the shares had been selling at but also another 10 shillings a share, I think it was, as the shares were partly paid and the call was promptly made. I remember it well, having acted in a very junior capacity for a holder.
Currently, of course, we have the horrendous position of BrisConnect ( I think that's the name ) unitholders in Australia who not only hold practically worthless units but are up for two further calls which threaten to bankrupt a very large number of people to the tune of millions of dollars.
I don't see too many shareholders being interested in uncalled libilities for a long time to come.

Cut to the chase - they are called partly paid shares per your post above. One of the most dangerous instruments that investors could ever own.

Hence, the invention of warrants and options.

[Nevl]

A look at both Du Pont and Dow suggests they have problems of there own!!

Yeah those names were the first that came to mind and I know Du Pont is worried as I have Dutch friend who works for them. But there are plenty of chemical companies which would be happy to pick up $1bill in sales for less than $200 mill plus $400mill in debt.

[Stranger_Danger]

Belg - especially if the NZ dollar decides to keep rising, and, this is admittedly a big *if*, hindsight tells us some Nuplex customers ran their inventories down to unrealistically low levels on a kneejerk, and need to rebalance, even if demand is destined to be weak for some time.

[winner69]

NPX currently has an EV of about $440m ... as Nev says sounds bloody cheap for $1.5 billion of sales .... but then some of those chemical companies being touted are on much the same multiplies.

Where to for the NPX shareprice though in the short to medium term

Even if NPX got back to making $50m in a year or two on a PE of 10 then market cap would be $500m. After rights issue thats about 75 cents a share (if the top up goes ahead thats about 68 cents.

Applying same multiples as this years likely earnings (allowing for a lower interest expense) one would expect the share price to be 40 cents to 45 cents post rights in the short to medium term ... after things have settled down and multiples becoame a bit more normal

In that respect picking some up at 23 cents looks a good deal ... which means current shareholders really do need to front up with more dosh to recover the situation

Assume that a lot of those currently buying are doing do to participate in the rights issue and not waiting to see if a decent amount of rights come onto the market

Interesting article that Gaynor did yesterday in The Herald. his main concern seemed to be that a tight top down management structure (the world essentially controlled by Hirst) possibly has lead to some of NPX problems along with not foreseeing (oe not reacting to) the implications of a global downturn and a credit crunch.

I somewhat agree with those comments ... if only based on the fact that over a long period of time NPX earnings have barely covered it costs of capital .... in spite of the optimisitic outlooks and all that it has never really been able to break free from that which would have added real shareholder value

Be keeping an eye on the NPX chart ... might soon be a shareholder

[macduffy]

That's pretty much my take on things, winner.

The dilution is such that any shareholder not prepared to take up the rights would probably be selling now. That, coupled with a likely nominal price for the rights - 2 or 3c? - should mean that not a lot get traded. Unless, of course, the NZD continues to strengthen and to improve NPX's foreign currency borrowing position. Things could look a little brighter then.

[Nevl]

NPX currently has an EV of about $440m ... as Nev says sounds bloody cheap for $1.5 billion of sales .... but then some of those chemical companies being touted are on much the same multiplies.

Where to for the NPX shareprice though in the short to medium term

Even if NPX got back to making $50m in a year or two on a PE of 10 then market cap would be $500m. After rights issue thats about 75 cents a share (if the top up goes ahead thats about 68 cents.

Applying same multiples as this years likely earnings (allowing for a lower interest expense) one would expect the share price to be 40 cents to 45 cents post rights in the short to medium term ... after things have settled down and multiples becoame a bit more normal

In that respect picking some up at 23 cents looks a good deal ... which means current shareholders really do need to front up with more dosh to recover the situation

Assume that a lot of those currently buying are doing do to participate in the rights issue and not waiting to see if a decent amount of rights come onto the market

Interesting article that Gaynor did yesterday in The Herald. his main concern seemed to be that a tight top down management structure (the world essentially controlled by Hirst) possibly has lead to some of NPX problems along with not foreseeing (oe not reacting to) the implications of a global downturn and a credit crunch.

I somewhat agree with those comments ... if only based on the fact that over a long period of time NPX earnings have barely covered it costs of capital .... in spite of the optimisitic outlooks and all that it has never really been able to break free from that which would have added real shareholder value

Be keeping an eye on the NPX chart ... might soon be a shareholder

Thanks for that Winner. I was too lazy to go through the figures myself and just rattled off numbers that allow for 500mill shares at about $0.3 and debt after rights issue of about $400 mill. The medium term outlook for NPX is positive though Gaynor is correct to highlight once again NZ's lack of management depth unable to take advantage of a great company and make more of it. The debt problem is not such an issue for me but their ability to move into new markets and come up with new composite materials. After all steel is basically on its last legs as a high end product. Modern composites are already moving in to Car and building technology. Shipping containers are being built out of light weight composites and soon Ships will be as well. NPX is in an industry that will be the future but I cannot see them being the ones to take advantage of this. A lack of imagination and an unwillingness to take risks will mean that they end up being another Navman, Fletchers, Forest products, Glaxo, etc. Still i think the best play on this is as a takeover target 18 months down the track. Would love for them to be in a position to be the company doing the takeover but it will take management 20 years to again built up the courage to do anything exciting or innovative.

[Dr_Who]

NPX sp is holding remarkably well. Looks like it may even go higher. Is there a large buyer or just good demand? Anyone know why the sp is moving up?

[Dubdee]

Perhaps the stock price is up because the underwriters have a "greenshoe".

This means the lead managers have allocated more stock than is actually issued by NPX so that they can mop up weak selling in the market.

If the price remains firm they call on their option for NPX to cover their short position.

[macduffy]

Perhaps the stock price is up because the underwriters have a "greenshoe".

This means the lead managers have allocated more stock than is actually issued by NPX so that they can mop up weak selling in the market.

If the price remains firm they call on their option for NPX to cover their short position.

I doubt that.

It's a rights issue so the underwriters only have their individual rights allocations plus the number covered by the option.

I think its more likely that the market is seeing some value in the new shares at 23c and as noted earlier, because of the heavy dilution factor, its likely that most holders will take up their rights leaving few for rights trading.

In short, more buyers than sellers at present.

;)

[macduffy]

A very optimistic view methinks. ;)

Maybe.

But if Mr Market didn't see value in NPX at 23c he wouldn't be paying 52c for them cum rights.
Any price above 23c implies some value in the rights. Currently, that's assessed at 3.625c per right.

[macduffy]

Could be existing holders not wanting to be diluted by the additional 15%

My point exactly!

;)

[Dr_Who]

Hey smokin, thats why there are buyers and sellers on the market. If analyst agrees with eachother then there wont be a market. It depends if you are long or short will determine who you believe in.

[whatsup]

When is the last trading date b4 the shares go ex the 1/7 issue at .23 per share.
lots of shares traded over the last few days is this trading by the underwriters or the share holders at large.????

[The BOWMAN]

When is the last trading date b4 the shares go ex the 1/7 issue at .23 per share.
lots of shares traded over the last few days is this trading by the underwriters or the share holders at large.????

Nuplex Industries Limited (Nuplex) today announced a fully underwritten renounceable rights issue (Rights Issue) of seven fully paid ordinary shares in Nuplex (New Shares) for every existing Nuplex share held by shareholders with a registered addressed in Australia or New Zealand at 7.00pm New Zealand time (5.00pm (AEDST)) on 1 April 2009 (Eligible Shareholders) at an issue price of $0.23 per New Share.

[whatsup]

Thank you TB

[Dr_Who]

NPX sp has gone mental. :eek:

[macduffy]

Nuplex Industries Limited (Nuplex) today announced a fully underwritten renounceable rights issue (Rights Issue) of seven fully paid ordinary shares in Nuplex (New Shares) for every existing Nuplex share held by shareholders with a registered addressed in Australia or New Zealand at 7.00pm New Zealand time (5.00pm (AEDST)) on 1 April 2009 (Eligible Shareholders) at an issue price of $0.23 per New Share.

It might pay to check that.

I've made a note that the shares trade ex rights from 26 March. Unfortunately, I can't find the actual announcement!
:o

But will keep looking.

Meanwhile, Mr Market continues to see value in the new shares at 23c!

;)

[whatsup]

AXS reg shares trade ex 26/3/09: N Z reg shares trade ex 2/4/09 I think this is the dates,

[macduffy]

AXS reg shares trade ex 26/3/09: N Z reg shares trade ex 2/4/09 I think this is the dates,

Thanks, whatsup.

Those dates are confirmed ( NPX announcement of 20 March).

:)

[Casa del Energia]

What's the consensus out there?

Having a few Nuplex but also wanting to keep a good level of cash reserves for other opportunities, I feel reluctant to stump up. BUT my take on this whole fiasco is simply an imaginary crisis in the minds of some bankers and by flogging off my rights then I dilute myself out of which is (is it?) an otherwise sound company. On the other hand - the market in general is closer to stabilising and opportunities abound - - being just a mortal and of limited funds, I cannot be everywhere at once. My action is probably to take up all my rights as it seems probable that action in itself will be quite lucrative. What are you others going to do?

But - by jingo; I'm still annoyed. No - absolutely hopping bleedin mad.

[OldRider]

Cde: Hopefully 23cps will turn out to be a steal, the price rise over the last day or so
tends to support this, and I will be taking up my allocation as well.

There is still a nagging doubt about whether others know something I don't?

[macduffy]

I'll be taking up my rights which will leave me with shares averaging about 82c each, compared with 29c for anyone buying today at 70c cum rights.
I agree that they look a steal at 23c and that there is only a very low risk that the issue won't be a success. The SP rise lately bears this out and the recent strength of the NZD is working to help correct their overall debt position.
More to the point though is that any holder who doesn't take up their rights will be badly diluted. There is every incentive then to find the money to subscribe.
Just IMO of course.

;)

[Dr_Who]

What impact will the high NZD have on NPX bottom line profit?

[macduffy]

What impact will the high NZD have on NPX bottom line profit?

Hi doc.

Difficult question and I hope someone else will rise to the challenge and do some research on this. I may have some time later myself.

The point is of course that NPX has operations in several countries and sales in many more. That was the rationale for borrowing in various currencies in that the receipts would constitute a natural hedge to some degree against the borrowings, or at least against the interest payable. As we know, that strategy came unstuck in that the banking covenants, interest/earnings ratios etc, were expressed in NZD terms so these blew out out as the NZD lost value.
Although the NZD has firmed against the USD, we need to look also at how it is trading against the other relevant currencies and their relative weightings as far as NPX is concerned.
Overall, although a firmer dollar will impact earnings I would expect it to be beneficial to NPX because of the translation effect on borrowings but the extent of this needs some more work.

:)

[Grimy]

I'll be taking up the rights I'm entitled to.

[Jim]

I am taking up all my rights allocation.

[macduffy]

Good article on NPX problems by Bruce McKay in this morning's DomPost. Doesn't seem to be on Stuff website.

He reckons that the debt structure is likely to be overweight NZD and AUD and underweight in Euros although company doesn't disclose the exact breakdown in currencies.
Interesting that although NPX has multi-currency borrowing facility, it is finally denominated in AUD. Company reports in NZD so there is plenty of scope for currency movements to play havoc with results.

Doesn't answer doc's query exactly but my gut feel is that a strong/stronger NZD is good for NPX from a debt perspective but bad for earnings. The sooner they change their reporting to AUD, the better.

[Anna Naum]

Good article on NPX problems by Bruce McKay in this morning's DomPost. Doesn't seem to be on Stuff website.

The sooner they change their reporting to AUD, the better.

The sooner the company comes clean and advises what the sensitivity to currency/demand etc the better. After all they are asking for as much as $125m+ to shore up the balance sheet.

[Dr_Who]

Doesn't answer doc's query exactly but my gut feel is that a strong/stronger NZD is good for NPX from a debt perspective but bad for earnings. The sooner they change their reporting to AUD, the better.

I was thinking the same thing. I have a feeling in the short term it will benefit their debt level, but in the long term it may have an impact on their underline profit if NZD continues to strengthen.

How high will NPX sp go? Surely, it has run abit too hard.

[Anna Naum]

I was thinking the same thing. I have a feeling in the short term it will benefit their debt level, but in the long term it may have an impact on their underline profit if NZD continues to strengthen.

How high will NPX sp go? Surely, it has run abit too hard.

Come now Dr Who, with a byline like yours you must know stocks fluctuate both up and down.

[Casa del Energia]

I was thinking the same thing. I have a feeling in the short term it will benefit their debt level, but in the long term it may have an impact on their underline profit if NZD continues to strengthen.

How high will NPX sp go? Surely, it has run abit too hard.

88c, up 20. Hasn't stopped yet. But if the market is like me - it is still trying to work out what the price is. Perhaps it is starting to filter through that this whole fiasco is simply a banker created artifact.

PS - I've jacked up enough dough to take up my rights and still keep myself in beer and fags - So I'm in boots and all.

[Dr_Who]

NZD has hits its high of .5740 and have started trending down again, currently trading at .5595.

[tsb]

anyone got an opinion? cos sure as hell I haven't
I sold down WDT as we are getting to the end of the tax year (I know they have firmed up)
Bought 12K NPX @ 54 cents
would you hold and go for all the options
or
sell half now and go for all the remaining options?
Why?
Thanks
TSB

[POSSUM THE CAT]

TSB A bird in the hand might be better than Two in the Bush

[bull....]

If you sell at 88 half thats 2040 profit

Keep half 6000 get 42000 rights at .08c sell rights thats 3360 profit so 5400 total profit.

Keep lot 84000 rights 6720 profit

Keep all shares and it goes to 40 later thats 84000 + 12000 = 96000 shares so 25800 total cost value at 40 is 38400 so 38400 - 25800 = 12600 profit.

take your pick

Hold myself and considering the same things.

[tsb]

hey thanks you guys. Its helped a lot.
I've found that you always need to have something to go into next and I didnt mention that I also have a bucket of VCT which goes ex at the end of the month and some could fund the full number of rights.
Nuplex does seem to have a pretty good record even if they did go a bit full on with expansion.

After the first flush of the new share sells and 6-12 months down the track I'll hopfully look forward to Nuplex being a comfortable investment. I'll go for the longer term
Thanks again
TSB

[Hoop]

anyone got an opinion? cos sure as hell I haven't
I sold down WDT as we are getting to the end of the tax year (I know they have firmed up)
Bought 12K NPX @ 54 cents
would you hold and go for all the options
or
sell half now and go for all the remaining options?
Why?
Thanks
TSB

Rule of thumb The KISS method.... buy in uptrends, sell in downtrends.

Hands up those on ST that do it the other way round.

[Dr_Who]

I think NPX has run too hard too fast.

This is a big rights issue with alot of rights to offload onto the market.

[macduffy]

I think NPX has run too hard too fast.

This is a big rights issue with alot of rights to offload onto the market.

Yes, there's a lot of rights involved but the cost of taking them up is relatively low at 23c and the current theoretical value of the rights is only about 3c.
So on the one hand the cost of taking up the shares for a lot of holders is not particularly high and on the other, the rights are hardly worth selling, except in substantial number, particularly after brokerage.
The fact that the head shares are selling at a big premium to the 23c indicates to me that there is going to be a firm take-up and that any cheap rights will find willing buyers.

Just IMO of course.

;)

[Casa del Energia]

Timetable

Start rights trading 2/4
End rights trading 15/4
Offer close 20/4

(NZX only - Aussies, you'll have to look it up)

[whatsup]

WOW ! $ + this morning!!!!!!!!!!!!!!!!!!!!

[Hoop]

anyone got an opinion? cos sure as hell I haven't
I sold down WDT as we are getting to the end of the tax year (I know they have firmed up)
Bought 12K NPX @ 54 cents
would you hold and go for all the options
or
sell half now and go for all the remaining options?
Why?
Thanks
TSB

Rights start trading in OZ today
check out NPXR.ASX
NPX.ASX trade today as ex entitlement
What happens in OZ for the next 4 trading days may aid in your decision process

[Casa del Energia]

! 96c - getting well beyond the market analysts price range. Anyone got a good theory about the price strength?

[winner69]

At this rate the rights might be worth more the new shares

[macduffy]

! 96c - getting well beyond the market analysts price range. Anyone got a good theory about the price strength?

Refer the reasons in post #221.

Add to that, increasing confidence that the issue will settle NPX's debt problems ( but not, of course, the hit to its profitability, but they're not on their own there! ) plus a firmer NZD which also helps the debt position, plus some confidence, flowing from the firmer US markets that the worst of the recession may be close.

The interesting thing is that at a cum rights SP of say, 96c, the theoretical rights value increases only marginally - to about 9c - so perhaps there is still some incentive to buy the heads, despite their apparent "heady" increase.

All just IMO of course.

;)

[beacon]

Banks squeezed too hard ... and the market knows it. And the underwriters ... oh well ... all's well that ends well. Hopefully John will be smarter next time...

[bull....]

The increase in currency will have reduced their debt position from last result combine this with the money raised to reduce debt and cost savings under way and maybe the position post rights will look pretty good.

Even at 1.1 still cheap entry rights worth 11 heads post 34 , analysts suggested post issue values between 32 - 50 c

[whatsup]

Hoop, Whats your guess that the NPZR open in Aussie today, only 15 min to go so hurry?

[Hoop]

Hoop, Whats your guess that the NPZR open in Aussie today, only 15 min to go so hurry?
A12cents?
cheated abit though

[Hoop]

looking at the depth no sellers and buyers at 2cents
NPX ex is at 35cents opening hype but sellers fallen to 30 cents

[bull....]

nz shares at discount to aus heads so nz will need to rise i would say

[Hoop]

NPX fell back to 30Ac but 7 minutes later back up to 34
NPXR depth still no sellers ...2 buyers
31,800https://www.directbroking.co.nz/DirectTrade/images/spacer.gif @ 2cents 20,000 at 1 cent

[Hoop]

nz shares at discount to aus heads so nz will need to rise i would say
Back to 30Ac that's about $NZ1.05 counting the rights

[whatsup]

Hoop, Whats the deal on the bonus option?

[Hoop]

Hoop, Whats the deal on the bonus option?

Hoop had a mental breakdown when writing the last post
please ignore I have edited it

Trying to multi-task NPX with PRC......and failed:p

[Thumpa]

NPX Aussie up 35% today
NPX New Zealand up 21%

[New Jersey girl]

Well, well, well. At $1.05 there is lovely support for the first part of the Modigliani -Miller theorem. If shareholders borrow $132 million on their own account to pay the company's debt holders $132 million, and the company is not distressed, it shouldn't change the value of a firm.

Now to see if the second part of the theorem holds. If the firm is in distress, a capital raising that removes the threat of bankruptcy should raise the value of the firm.

The pity of it all is that Nuplex waited so long that they had to give away a part of the firm to the investment bankers that arranged the capital raising. While the cost was not as high as it could have been, one still thinks the retiring chief financial officer has done shareholders a great disservice.

[Hoop]

there are still short sellers still in the system for NPX.....ouch!!!

http://www.nzx.com/news/markets/4884324

quote from the same article...
....Macquarie predicts a 12-month target of 38 cents a share, with Morningstar picking the stock to trade at 40.8 cents after the rights issue. Both have upgraded their recommendations to clients......

[Balance]

there are still short sellers still in the system for NPX.....ouch!!!

http://www.nzx.com/news/markets/4884324

quote from the same article...
....Macquarie predicts a 12-month target of 38 cents a share, with Morningstar picking the stock to trade at 40.8 cents after the rights issue. Both have upgraded their recommendations to clients......


Ouch time alright for short sellers. Hope they have iron-spheres (read marbles) to withstand the short-squeeze!

[Ponda]

NPX Aussie up 63% today
NPX New Zealand up 25%

The NZ market has a bit of catching up to do!!!!

[Hoop]

profit taking in progress...105c down to 91c back up to 95c ....be interesting to see what happens when ASX opens.

[Dr_Who]

I think NPX has run too hard too fast.

This is a big rights issue with alot of rights to offload onto the market.

Yeap, it has run abit too hard and too fast.

[winner69]

Oh the indignity of it ..... old iconic NZ company being used by the instos to screw the poor old retail investors and make heaps for themselves

Mr Hunter needs to realise that's how this nasty world operates .... they haven't done anything wrong

Nuplex: The rights issue rip-off


http://www.stuff.co.nz/business/2299535/Nuplex-The-rights-issue-rip-off/

[Balance]

Oh the indignity of it ..... old iconic NZ company being used by the instos to screw the poor old retail investors and make heaps for themselves

Mr Hunter needs to realise that's how this nasty world operates .... they haven't done anything wrong

Nuplex: The rights issue rip-off


http://www.stuff.co.nz/business/2299535/Nuplex-The-rights-issue-rip-off/

Does not make it right. Indecent and immoral things are often not wrong ... but are they the right and decent things to do?

Good on Tim Hunter for bringing it to the public's attention.

FNZC spreading the rumours and end up advising Nuplex (according to article). What a master-stroke!

[Hoop]

.........

Mr Hunter needs to realise that's how this nasty world operates .... they haven't done anything wrong.....

Balance quote.. "....Does not make it right. Indecent and immoral things are often not wrong ..."


http://photo.goodreads.com/authors/1200337855p2/3720.jpg (http://www.goodreads.com/author/show/3720.Anne_Frank) "The weak die out and the strong will survive, and will live on forever"
— Anne Frank (http://www.goodreads.com/author/quotes/3720.Anne_Frank) (The Diary of Anne Frank (http://www.goodreads.com/book/show/5507.The_Diary_of_Anne_Frank))


Disc: very short term opportunity taken without moral regret


(http://www.goodreads.com/quotes/show/74282)

[Dr_Who]

Oh the indignity of it ..... old iconic NZ company being used by the instos to screw the poor old retail investors and make heaps for themselves

Mr Hunter needs to realise that's how this nasty world operates .... they haven't done anything wrong

Nuplex: The rights issue rip-off


http://www.stuff.co.nz/business/2299535/Nuplex-The-rights-issue-rip-off/


Great article.

From funds shorting the living daylights out of NPX to investment banks screwing the the other end.

[Balance]

Balance quote.. "....Does not make it right. Indecent and immoral things are often not wrong ..."


http://photo.goodreads.com/authors/1200337855p2/3720.jpg (http://www.goodreads.com/author/show/3720.Anne_Frank) "The weak die out and the strong will survive, and will live on forever"
— Anne Frank (http://www.goodreads.com/author/quotes/3720.Anne_Frank) (The Diary of Anne Frank (http://www.goodreads.com/book/show/5507.The_Diary_of_Anne_Frank))


Disc: very short term opportunity taken without moral regret


(http://www.goodreads.com/quotes/show/74282)

And where are Hitler and the Nazis?

The management and Board of Nuplex need to account for how dumb they have been. Imagine them negotiating on contracts with suppliers, customers and regulatory agencies.

[winner69]

And where are Hitler and the Nazis?

The management and Board of Nuplex need to account for how dumb they have been. Imagine them negotiating on contracts with suppliers, customers and regulatory agencies.

Chairman Aitken seems to have been a bit of a lame duck in all this Profile doesn't inspire one ... including the recent highlight of being president of Formica Corporation. If it was true that they asked GS for guidance last year and it didn't come too much than somebody has to be shot.

After Hirst the board is essntially 2 retired dudes from Ernst Young and a lawyer.

Gaynor from The Herald questioned Nuplex tight management strcuture amd their ability to run a global chemical business .... maybe he should get stuck into their board as well.

Seems to me that Hirst and the rest of the board are still in denial reading between the lines of some of their comments

[Casa del Energia]

Oh the indignity of it ..... old iconic NZ company being used by the instos to screw the poor old retail investors and make heaps for themselves

Mr Hunter needs to realise that's how this nasty world operates .... they haven't done anything wrong

Nuplex: The rights issue rip-off


http://www.stuff.co.nz/business/2299535/Nuplex-The-rights-issue-rip-off/

Smells bad. Shame we don't have a Senate Committee in NZ. I suspect multiple rats. Keep digging, folks.

[whatsup]

Possibility some of the instos were/are the same ones who NPX went to a year ago for a placement when NPX wanted cash to fund the purchase of those resin assets, they possibly were concerned with the debt levels then and are now making their point not to get caught again as well as taking the chance to average down ,,,,we all should be doing the same.

[Tanger]

NPX currently trading on NZX at 82c. Taking up the 7 for 1 at 23c gives an average price of 30.4c. On the ASX, currently trading ex rights at AUS$0.32 (about NZ$0.38). Aside from the fact there are still a couple of days to go, what am I missing?

[Hoop]

whatsup (http://www.sharetrader.co.nz/member.php?u=4990)
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Hoop, Whats your guess that the NPZR open in Aussie today, only 15 min to go so hurry?


A12cents?
cheated abit though

First trade 7.9Acents today
long way from my 12 cents guess ....however the next seller is at 12 Acents:)

Tanger I too am wondering the price difference.

[Ekrub]

What do learned contributors feel the NZX market price for NPX
will be tomorrow, (April 2nd)? Ex rights entitlement.

[macduffy]

What do learned contributors feel the NZX market price for NPX
will be tomorrow, (April 2nd)? Ex rights entitlement.

I don't know about "learned" but based on the current SP of 75c cum issue, the theoretical ex rights price would be 29.5c and the rights price 6.5c.
I would expect a bit of selling pressure on the heads while the rights are traded so maybe a market price around 27/28c?

The rights will interest me if they come under heavy pressure, say 2.5 - 3c.



;)

[Ekrub]

If it's at those levels, I think I'll have a punt. Thanks Macduffy.
I'lll get to own a few of 600+ million shares. There'll have to be
a consolidation somewhere down the line methinks.

[macduffy]

Now that the SP has gone to 85c those calcs are already out of date!

It may pay to wait to see today's closing price and then reassess. Personally, I'll still be interested if the rights get sold down too heavily.


;)

[macduffy]

NPX finished on 81c so ex rights theoretical price is 30.25c and rights value 7.25c.

Not too far from the previous calc so my earlier thought still reasonably valid as far as I'm concerned.

;)

[biker]

Sold NPX heads at 35c today and bought them back as rights at 30c.


Funny old market :-)

[Dr_Who]

Completely bizzare market in NPX.

[macduffy]

Sold NPX heads at 35c today and bought them back as rights at 30c.


Funny old market :-)

Yes, a nice arbitrage, biker.

And it's still available for anyone with enough heads to make the exercise worthwhile.

[Dr_Who]

Surely you must have rocks in your head to buy the head sures.

[blackcap]

I have been a broker in the past and seen such things before but can anyone come up with a reasonable reason why the heads are trading at such a huge huge premium to the rights + 23 cents? I can for the life of me not work it out.

The problem is I dont have enough heads to sell to make the exercise worthwile (ala brokerage) but surely some instos can make a quick buck along the way? Its not that the heads are cum div or anything either is it.....

[macduffy]

I can only guess that some buyers are under the mistaken impression that the heads have a dividend advantage. But surely the market's better informed than that.....?

Otherwise, is it a tactic on the part of someone to keep a healthy market in the rights? Pure guess, that!

Meanwhile, I've taken the bait and bought some rights today.

:cool:

[Dr_Who]

Otherwise, is it a tactic on the part of someone to keep a healthy market in the rights? Pure guess, that!

:cool:

You are on to it Macduffy.

NPX sh are beening screwed both ends.

[Hoop]

From observation...

The Aust head shares price trading on the ASX at 28.5Ac is equivalent exchangewise to 34.7 NZc (28.5/0.82=34.7) so no real difference. ( NZX 34NZc at the close on Friday)

It seems (using FA) these shares are near to their valuations at present.

Therefore... the anomally is not the head shares ...its to do with the rights pricing.

The difference regarding rights on the ASX is interesting as 28.5AC - 23NZc** = 5.5 Ac near to that of trading rights price on the ASX at 5.2Ac so there is an out of alignment difference happening on the ASX. as that market is "perceived" to be using a NZc figure in their Ac figures...hence that perception is creating confusion.

Remember.. the head shares are priced similarly in both countries (exchangewise).



Observation shows at close on the ASX the NPXR rights were at 5.2Ac which is the exchange equivalent to 6.3NZc (5.2/0.82=6.3)
Therefore the close on the NZX for NPXRA rights were 6.2NZc shows there is no real difference, therefore there is no real out of alignment difference happening using the exchange rate price method.

**So it seems the market is adhering to the exchange rate price difference between the two countries for pricing the rights using the NZ 23 cents as a reference figure only...thus throwing up this mathmatical difference as outlined below
ASX 28.5Ac - 5.2 Ac = 23.3 Ac (near to the 23NZc*** cost to right to buy)
NZX 34 NZc - 6.2NZc = 27.8NZc (4.8c difference)

***not in Acents

may help to explain the pricing conflict as there seems to be a risk factor built in...but see my next post to clarify further

[Hoop]

Further to my last post...
Note:...the rights are purchase at 23NZC therefore the ASX although they are referencing the 23 cent mark as the difference between their head share and rights...I would personally assume that this is the risk factor built in and the arbitrarily figure that the ASX market is using to calculate the risk factor price. is the 23NZc figure as opposed to any other figure that they could have at this time.

If the Ozzies buy the rights I assume it will be at 23NZcents so they pay 23*.82 = 19Ac

Therefore on the ASX there is a risk price factor 28.5 -19 = 9 - 5.2 = 3.8Acents
On the NZX there is a risk price factor of 34 - 23 = 11 - 6.2 = 4.8NZcents

Question: Is the risk price the same on both Stock Exchanges ?
Answer: Yes near enough.. theoretical 4.8NZc x 0.82 = 3.93Ac.. Actual 3.8Ac

Selling the heads now and buying back the equilvalent number of rights makes economic sense only under the following scenerio that you are going and were always going to keep the NPX shares (in theory) until the day after conversion date. The market is telling you that using this strategy there is a risk that NPX shares could fall (but not necessarily) in value between now and conversion date That risk price is the discounted 4.8 NZc at this moment.

[macduffy]

Hi Hoop.

I think I follow your reasoning here but there is one major factor which seems to throw a spanner in the works.
The volume of both heads and rights being traded on the ASX is a fraction of that traded on the NZX. Yesterday, ASX traded about 10% of the number of heads traded in NZ. The rights trading was even thinner - a miniscule 2% of the number traded in NZ.
It doesn't look to me as though the arbitrage between the heads and the rights is being driven from Australia although I'm not aware of the respective NZ/Aust shareholdings.

Incidentally, I assume that by "conversion" date you mean "application" date?

:)

[Balance]

I can only guess that some buyers are under the mistaken impression that the heads have a dividend advantage. But surely the market's better informed than that.....?

Otherwise, is it a tactic on the part of someone to keep a healthy market in the rights? Pure guess, that!

Meanwhile, I've taken the bait and bought some rights today.

:cool:


No big hurry to buy the rights or shares just yet.

The institutions have options to call on Nuplex to issue them 99m shares at 23 cents. Anything they can get above 1 cent from selling their existing shareholdings and rights , they will and have as it's a freebie at the expense of those who cannot underwrite and get the options.

So work the share price up and feed the rights to the quacking ducks. Heads they win, tails you lose.

[Dr_Who]

I was thinking the same thing Balance, hence my last post that sh are getting screwed both ways.

Dont forget. The Obama admin are glooming GM and Chrysler for a possible bankruptcy. How will the collapse of the US car industry affect NPX?

[macduffy]

The Obama admin are glooming GM and Chrysler for a possible bankruptcy. How will the collapse of the US car industry affect NPX?
__________________
QUOTE.

That depends on whether NPX sell disproportionately more product to GM and Chrysler than they do to the rest of the world-wide car industry. Besides, GM and Ch will still be producing cars, albeit on a probably reduced scale.

[contrarianinvestor]

Even after this mess they still blame everything else and boasts a "Proven Management Team and Board" and prints positive bs spin in big bold letters in their interim report. All they proved was that they can destroy almost all shareholder value. Shareholders should ask some serious questions next time they meet.

[winner69]

Even after this mess they still blame everything else and boasts a "Proven Management Team and Board" and prints positive bs spin in big bold letters in their interim report. All they proved was that they can destroy almost all shareholder value. Shareholders should ask some serious questions next time they meet.

Agree there mate ... Chairman Aitken made a comment in the press that suggested he is still in denial and its all the banks fault etc ... quoted as covenants were "a fairly arbitrary number". "We had our senior debt cover ratio set at three times. Other companies have them at 3.5, four times. It's important to come back to the reason covenants are there. [They] are there as a warning signal so the banks can say `here's a hurdle you haven't met, let's sit down and talk'. It doesn't mean the company's not trading well."

Sort of says they were niave enough to accept such terms in the first place because they thought that they would never be an issue (why didn't they get their ratio set an 'arbitrary' 4) and then a 'proactive proven management team' should have seen this coming and talked to the bank instead (as it seems) giving the banks the excuse to talk to them

Even though they will get their cash, at some expense to current shareholders, i agree with what Gaynor said the other day when he questioned thie current management teams ability to run a global organisation ... things ain't going to be easy and if they are to perform to anaysts expectations that support a 40-45 cents share price there has to be changes at the top. Since they started down this global expansion path the profit expectations given by this proven management team have never been met.

[Grimy]

Even after this mess they still blame everything else and boasts a "Proven Management Team and Board" and prints positive bs spin in big bold letters in their interim report. All they proved was that they can destroy almost all shareholder value. Shareholders should ask some serious questions next time they meet.

Yes after receiving the report I started wondering if I want to get much deeper into this share................

[Hoop]

Hi Hoop.

I think I follow your reasoning here but there is one major factor which seems to throw a spanner in the works.
The volume of both heads and rights being traded on the ASX is a fraction of that traded on the NZX. Yesterday, ASX traded about 10% of the number of heads traded in NZ. The rights trading was even thinner - a miniscule 2% of the number traded in NZ.
It doesn't look to me as though the arbitrage between the heads and the rights is being driven from Australia although I'm not aware of the respective NZ/Aust shareholdings.

Incidentally, I assume that by "conversion" date you mean "application" date?

:)

Hi MacDuffy.
True the pricing and possible arbitraging would not be driven from a small trading volume area such as the ASX compared to the amount of volume on the NZX.

My inference of the ASX importance is that they are a week ahead of the NZX ...so reference to NPXR pricing (on the New Zealand side) became real when the ASX starting trading on the 26 march... a week before NZX (2 April). For that week the rights and the adjusted head shares were alot higher, so the ozzies were more optimistic than us Kiwis..since then the NZX has traded the rights as well and the ASX prices for both heads and rights have fall down in line with the NZX prices (as you MacDuffy correctly say the NZX is the dictating market).

The trading for the rights close on the ASX on the 9th April and on the NZX on the 15th (2 trading days difference due to Easter)....so some ASX activity may be evident on thursday 9th which possibly could spill over on to the NZX (not holding breathe over it though:rolleyes:)

Incidentally, I assume that by "conversion" date you mean "application" date?
No.. I mean't first day of trading ..Again I think ASX is a trading day ahead of the NZX (Friday 24 April)

[macduffy]

Hi Hoop.

The Offer Document is silent on when trading of the new shares commences in NZ. I don't know why this should be so but it's probably got something to do with the different settlement rules between ASX/NZX.
As shares are allotted on 23 April and the new shares rank pari passu with the old, I'd have thought that one would be able to trade (sell) on the NZX from 24 April if you have a good relationship with your broker, ie someone who is prepared to interrogate the registry records on your behalf to confirm allotment.
A bit of an academic point I suppose unless you're looking to sell immediately.

[Jim]

I wonder how much the shares worth when it trade on market when it list. Any clue punters ??

[macduffy]

In theory, it ought to be very close to the last rights price plus 23c, which in turn ought to be very close to the last heads price as the old (heads) and new shares rank pari passu.
Of course, all sorts of other pressures could affect this such as a rush to sell rights by holders who decide at the last minute not to take up entitlements; good or bad economic or company specific news etc. In short, anyone's guess at this stage, IMO.

[Dr_Who]

If the rights goes any lower, the underwriters may have sleepless nights.

[bear]

If the rights goes any lower, the underwriters may have sleepless nights.

Still plenty of margin with their underwriting fees - they won't be having sleepless nights yet!!! - what will be interesting is the post rights issue heads price and what the take up is - feel sorry for holders who have little choice but to take them up.

don't hold and not sure if recovery will happen any time soon - long term play only and next profit and outlook announcements will critical

Bear

[Hoop]

Whats happened?
is AMP on to this Sell to Heads buy the rights "opportunity?" game.

1+M block of rights brought today and a disclosure notice from yesterday showing 1M less heads held by AMP

[beacon]

you're onto it hoop

[Dr_Who]

Someone is spending alot of money holding up those head shares.

[nwood]

What are peoples thoughts on the direction of NPX once the rights close and new shares are issued? I would assume down but who knows....

[whatsup]

Nwood, there will be a settling down period after the rights finish with a ( me thinks ) slowly sinking of the heads until some direction comes out from the company re results,t/o tradin etc should settle around .30 until a rerating is warranted..

[winner69]

Someone is spending alot of money holding up those head shares.

no doubt those 99 million shares at 23 cents will now be called up for the benefit of the sub under writers eh

Good little earner for them - FNZC et al done OK out of this fiasco haven't they .... underwriting fees and cheap shares and maybe sone professional fees as well

[Dr_Who]

Great gunners look at NPX sp... 40 cents! :eek:

You guys reckon most of the 15% option will find its way back into the market soon?

[whatsup]

NPX rights cash due today at the reg by 7.00pm, good hunting up .03 today , rights now worth .18c, boy have they were a great buy at .04-.05 c.

[bull....]

What date are the new shares issued and listed

[whatsup]

Phone up the Reg Computer share registry.

[777]

Well if they are issued on the 23/4/09 then they are yours to sell from that point on.

It surprises me that those of you that are involved in this issue don't know the facts. It all comes out with the issue announcement and is readily available through the brokers diaries on their websites.

Why bother the registry when all the information is out there?

[Balance]

Bugger all shares for sub-underwriters - 4%. So expect call option to be exercised.

[Balance]

New shareholders brought to register because of rights issue and sub-underwriting according to press release. If Nuplex is careful about who they bring in, we could very well see share price going higher instead going lower due to new shares issued.

[macduffy]

New shareholders brought to register because of rights issue and sub-underwriting according to press release. If Nuplex is careful about who they bring in, we could very well see share price going higher instead going lower due to new shares issued.

Regular readers of this thread may recall that I've always been cautiously optimistic that the SP ( at its new, low level) will stand up to the flood of new capital and that NPX will survive the battering its taken.
When all is said and done, the biggest problem has been the translation of its FX borrowings to NZD and the impact this has had on their borrowing covenants. The raising of new capital, although badly handled, has taken care of the "big issue". Profitability will improve as the world recession plays out. We've all been diluted in our holdings but matters should slowly improve from here, IMO.

:cool: