FBU Chart.

[Hoop]

Everybody who knows are touting a W shaped recovery

A worry for FBU shareholders is that the chart onlly reflects a V .... is there another V to come .... to make a W

Hmmmm.............it was only a few months ago everybody who knows were touting a lower low and the economy would sink again into that dreaded "D" word...

OKKKK..it seems it's upgraded to a W shape now..cool:cool::cool:...To me that indicates the worst is over...and the party will roll on:D

[bull....]

See fbu price targets raised today by gsjbw

[Wilkins_Micawber]

See fbu price targets raised today by gsjbw

What have they raised it to?

[bull....]

raised to 8.60

[winner69]

raised to 8.60

Will need to raise it again tomorrow .... can't have an analyst having a buy with the target less than the actual eh

Whether it was just the way the headline was written in the Herald this morning but this is some call eh "Analysts pick rebound for Fletcher" ..... Analysts are predicting Fletcher Building will head back to profitability after this year's loss. ............. hope they get this one right

Good people those analysts

[Lego_Man]

Breaking the shackles big time...

[kizame]

Please!!! Can anyone tell me why we have to go through this?

Surely a simple who bought what,when and for how much maybe is all we need.
Some of these notices get so complicated,I get a headache. Arrgh.







SSH: FBU: FBU - SSH AXA SA (AXA), AXA Asia Pacific Holdings Limited 08:30a.m.
FBU
21/08/2009
SSH

REL: 0830 HRS Fletcher Building Limited

SSH: FBU: FBU - SSH AXA SA (AXA), AXA Asia Pacific Holdings Limited

Disclosure of movement of 1% or more in substantial holding or change in
nature
of relevant interest or both
Sections 23 and 24, Securities Markets Act 1988
Relevant event being disclosed: [relevant event]
Date of relevant event: 18 Aug 2009
To New Zealand Exchange Limited
And Fletcher Building Limited (FBU)
Date this disclosure made: 20 August 2009
Date last disclosure made: 12 May 2009
Substantial security holder(s) giving disclosure
Name(s): AXA SA ("AXA"), AXA Asia Pacific Holdings Limited ("AXA APH") and
various
bodies corporate controlled by AXA and AXA APH listed in Schedule 1
(together, "the AXA
Group") and certain other entities associated with AXA and AXA APH listed in
Schedule 1.)

Contact details: Bruce Cooper +613 8688 2991
Date on which substantial security holder(s) began to have substantial
holding: 12 May 2009
Summary of substantial holding to which disclosure relates
Class of listed voting securities: Ordinary Shares - NZFBUE0001S0
Summary for the AXA Group
For this disclosure,--
(a) total number held in class: 37,663,117
(b) total in class: 604,466,028
(c) total percentage held in class: 6.23%
For last disclosure,--
(a) total number held in class: 29,339,310
(b) total in class: 585,769,376
(c) total percentage held in class:5.01%

Details of transactions and events giving rise to relevant event
Details of the transactions or other events requiring disclosure under the
instructions to this
form: see schedule 2
Details of relevant interests in substantial holding after relevant event
Details for the AXA Group
Nature of relevant interest(s): Each person listed in Part A(i) of Schedule 1
has a relevant
interest because it has power to exercise or control the exercise of a right
to vote or to dispose
of the relevant securities.
Each person listed in Part A(ii) of Schedule 1 has a relevant interest
because it has voting
power above 20% over one or more persons listed in Part A(i) of Schedule 1.

~7836344.doc
For that relevant interest,--
Each holder of a relevant interest is listed in Schedule 1

(a) number held in class:
(b) percentage held in class:
(c) current registered holder(s) of securities:
(d) registered holder(s) of securities once transfers registered:
Additional information
Nature of connection between substantial security holders:
Address(es) of substantial security holder(s):
Name of any other person believed to have given, or believed to be required
to give, a
disclosure under the Act in relation to the securities to which this
disclosure relates:
Declaration
I, Kevin Keenan in the capacity of Company Secretary of AXA Asia Pacific
Holdings Limited,
declare that, to the best of my knowledge and belief, the information
contained in this disclosure
is correct and that I am duly authorised to make this disclosure by all
persons for whom it is
made.

20 August 2009
End CA:00183744 For:FBU Type:SSH Time:2009-08-21:08:30:01

[macduffy]

Over a month since the last comment on FBU!

For what it's worth, Credit Suisse have downgraded to "Underperform".

I hold.

:cool:

[kizame]

Clear double top ... Should we all be out now?

I don't think that can be regarded as a double top,I have fletchers trading in an upward channel,this is hopefully just a correction inside that channel,and at yesterdays close is sitting right on the trendline.But I don't see the double top B.

[winner69]

Reports in Aussie that FBU might buy some or all the CSR building products businesses -- interesting

[COLIN]

Reports in Aussie that FBU might buy some or all the CSR building products businesses -- interesting

GPG hold a small stake in CSR. I seem to recall that they were agitating to see it broken up.

[a bowden]

Does everyone still have FBU trading in the upward channel? From my graph the trend line would need to pass $7.70 today to break it. Kizame you mentioned that on the 5/11/09 that it was right on the trend line and that was at $7.95 aprox.

[Casa del Energia]

While I value FBU at just 7.50 at present I can't see it getting there.

At 7.70 I'd probably top up ...

Whoops. I just topped up on FBU. Seemed like a good idea at the time. Oh well..

(And no, I'm not telling at what price - it's too embarrasing.)

[peat]

Kim Hill interviewed Hugh Fletcher on the national radio Saturday morning programme - this year 2009 being the centenary of the Fletcher company

http://podcast.radionz.co.nz/sat/sat-20091114-1110-Hugh_Fletcher_century_of_building-048.mp3

[AMR]

What is the trendline doing now?

[a bowden]

From what I have drawn it has broken the trend line since March. This trendline was only tested once. Also just broken through a 90 MA. Not sure what happens next?? Where can we expect it to find support?

[kizame]

Broken through support at 7.90 now maybe 7.60 but big support area at 7.00,but whether it will go that low is anybodies' guess.

[Phaedrus]

All of the indicators shown here gave very similar entry points, but their Sell signals fired in 2 distinct groups. The faster group (Break of confirmed trendline, OBV trendline break and RSI Bearish divergence) gave an exit at around $8.40 while the slower group (Break of unconfirmed trendline, Moving Average crossover and Trailing Stop) gave exits at around $7.90.

This chart provides an excellent example of the utilisation of confirmation when evaluating signals. The RSI plot shows a series of "Sell" signals marked by grey arrows. (This is common with uptrending stocks). Only the last one was backed up by confirmatory signals from other indicators.

Note the previous Support at $7.00. (Support is often found at round figures) See too how this was once a Resistance level. Resistance, when broken, often becomes Support.

The red trendlines on the RSI, OBV and Price plots will potentially provide useful re-entry signals.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU1121.gif

[PhaedrusFollower]

Hi Phaedrus,

I am a chart virgin. But I am sold on the idea, thanks to your excellent posts:cool:.

For FBU today, we have a price of 7.89, an RSI of 50 and OBV I can't do...so that breaks 2 out of 3 of your "reentry" lines....

I bought FBU at $7. Based on the above am considering buying more...but don't trust my very very very basic knowledge.

Any update would be mega appreciated. PF.

[Phaedrus]

All 3 trendlines mentioned above have since triggered Buy signals. Atypically, the OBV was last to fire - it is usually first. Don't worry too much about not having access to this indicator - you can get a good idea of what is going on by looking at the volume histogram. See how "down-day" volumes (red bars) were falling as the price fell? (Blue volume trendline) The downtrend was losing momentum. See how "up-day" volumes (green bars) are now rising? That's bullish.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU122.gif

Don't follow me. Everyone needs to develop their own system. We all have different strengths, weaknesses, preferences, financial circumstances, time constraints and risk tolerance. This is the time for you to read widely and build a basic knowledge of all investment techniques. Don't fixate on TA - fundamentals are important too.

[Hoop]

This " shallow (so far?)" NZX50's bull market correction has been in progress for 6 weeks.

All events must end sooner or later and as this BM correction has entered into the mature stage of its life cycle, its time to be aware of any emerging positive signals which could indicate a possible ending of this BM correction.

...Its much to early to say with confidence, but tentatively speaking FBU emitting some TA buy signals could be considered as one tiny emerging positive signal.

[Jay]

Hope so Hoop
Just bought some based on the above triggers and my own basic TA!

[Zito]

FBU has enjoyed a good run the past 3 days or so. However there are bearish signs with the price action this afternoon. Beware the 'gravestone doji' - a candle formed which can often signal the end of a bullish advance and which looks like a possibility today.

[Hoop]

This " shallow (so far?)" NZX50's bull market correction has been in progress for 6 weeks.

All events must end sooner or later and as this BM correction has entered into the mature stage of its life cycle, its time to be aware of any emerging positive signals which could indicate a possible ending of this BM correction.

...Its much to early to say with confidence, but tentatively speaking FBU emitting some TA buy signals could be considered as one tiny emerging positive signal.

With added hindsight...Yep it was too early to say...the BM correction continues and down goes FBU

Jay Hope so Hoop
Just bought some based on the above triggers and my own basic TA!

Yeah Jay ..I bought back in but small amount toe in the water stuff as I was not sure. Shame the buy signals were false...it happens sometimes.

Zito FBU has enjoyed a good run the past 3 days or so. However there are bearish signs with the price action this afternoon. Beware the 'gravestone doji' - a candle formed which can often signal the end of a bullish advance and which looks like a possibility today.

Excellent call Zito :cool::cool::cool:

belgarion.... I've been stopped out and down 3% today. What have I missed?

I'm still in..I usually have a stop at a support level... whether I sell then ??? ... interesting to note that a support line on the NZX50 at 3080ish and the FBU support line at 752 both not that far away..only -1%. If that support breaks there isn't far to the next big support.


At the start of this BM correction I eyed up the primary support line 3030-3040 area on the NZX50 chart as a possible bottoming point which is another 1 or 2 % away. I may hang on to my new FBU shares until this support. At the last BM correction FBU corrected -12% so things being equal 740 looks to be a possible bottoming area. Incidentially the 740 point is 3% away...so I will wait until then...any buy signals from now and it won't be just my toes getting wet:)

Earlier in the month seeing P's chart it was a hint that perhaps.. just perhaps the BM correction was done and dusted...it wasn't to be and we jumped in too early, dems da breaks.

[Phaedrus]

I've been stopped out Where did you have your stop set, Belg? What sort of stop are you using? Whatever it is, I would suggest that it is way too tight - especially for a fundamentalist such as yourself. The attached chart shows an 11% Trailing Stop. You can see that this is the minimum level required - anything less than this would have had you flicked out of the ongoing uptrend way back in May. Note also that this stop has not been hit. Interestingly, it is also at the level of previous (as yet unbroken) support of $7.58 as marked in the previous chart. The usual approach is to set your stops just below previous support levels. This is why Hoop is still in, for example. Note also the fact that the OBV rose over the last few days as the shareprice fell. This is a bullish divergence. Time will tell, but right now this looks more like a time to buy FBU, rather than sell. I'm surprised that you did sell, given that just yesterday you said "From a macro point of view, long term and tax risk adverse investors should be adding to their portfolios in this dip". Wouldn't that be you, Belg?

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBUa1215.gif


Down 3% todayThat's called volatility and in itself is not a cause for concern. FBU has has daily falls of more than double that figure as the uptrend continued.


What have I missed?As a longterm investor you missed the fact that FBU had not broken its trailing stop, was above its 200 day ma and was still above a significant support level. It is usual to buy at support, not sell.

[Glendoonie]

I think Belgerion is a TA under the pelt ;)

[winner69]

The silence is deafening. Was that a double top we saw? HY result soon ... Don't think market will like it when SP is north of $8.

Discl: Stopped out.

Jeez you are a worry Belg with get stopped out of most things you have when the market is rising

Obviously your 'stop loss' (using this term implies you lost some dosh but we know what you mean) was about $8 and you sold out yesterday ... even though FBU is still in an uptrend and all that. What was the rationale of choosing $8 as the point you no longer needed to own FBU shares. You will be having Phaedrus telling you off again

is interesting how some prices seem to come into plat either as support or esistance or just the price plus or minus a bit that the shareprice will hang around for a while

FBU got to $8 last August and the shareprice has ranged within +/-6% since - needs something really exciting to get it moving eh ... hopefully up

Another great example is MHI where 70 cents seems to be its rightful place in life .. no matter what comes out it seems to revert to 70 cents ... like from last May

You going to get back into FBU ... everything looks good for this year but many are already forecasting the next cyclical downturn in the NZ building cycle to start early 2011 ... in bioth residential and commercial work .... just as well FBU has the next US boom to look forward to

[Phaedrus]

The silence is deafening. What's to discuss? The trading range continues......


Was that a double top we saw?No - a double top needs prices to drop below the trough between the peaks.


Stopped out.Aaaaarrrggghhhhh! Not again Belg! What sort of trailing stop are you using? How is it set? What values are you using? As previously suggested (in post #642, previous page) whatever it is, it is obviously too tight. In addition, it has you selling just above support when BUY signals are firing off left, right and centre. Note also that you were selling when FBU was technically OverSold. This is a good time to buy, not sell. That is what contrarians do - sell when everyone else is buying! The magenta arrow shows where your (technically ill-advised) "stop" was triggered last time.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU122-1.gif

This chart also shows a 200 day moving average as used by conservative fundamental investors - I thought that is what you were, Belg. Anyhow, even this would have kept you in FBU so far.

[winner69]

Discl: Stopped out.

Grest risk management there Belg with the shareprice down another 25 cents since you were stopped out

With Us stuffed, Australia builders starting to suffer and NZ activity already atarting to show signs of another cyclical downturn you wouldn't be buying back in just at the moment would you

[PhaedrusFollower]

I am an FBU accumulator...Buying in the dips as you pros say.

So...yea, this is a dip...a big dip...and so my challenge to myself is to watch those buy signals fire, and try to get in as low a price as possible (duh!).

So, I'm watching RSI.

I'm watching OBV.

Both in negative slides at present.

I'm watching the Up days and down days volume graph...for any weakness in Down Days volume...

So, as we sit here FBU is at $7.68 on its 5th down day in a row.

There is a support level at $7.59 - That's the piece of the puzzle I don't know what to do with...so I will watch eagerly tomorrow to see if it gets near it. My question is...as a potential buyer is $7.59 the crucial decision time? If it breaks support, let it run down before buying, if it lifts, then the buy signals above should trigger so unleash the wallet and buy?

I am also concious of end of March a Gross interim dividend (for NZ tax purposes) potential payout of 10 to 14c (I'll say maybe 10c - taking guesses from other posters!), assuming there is one.

PF

[winner69]

Thanks w69. With regards the suggestion you made in previous post that I got out out at a loss, pehaps I should've called it a "stop profit". Very small profit but not taking any chances as I still think FBU is over valued at yesterday's close of $7.75. I feel about $7.50 is about right and is where I'll think about a re-entry (via a targetted buy I hasten to add ;) ) My architect tells me things are thawing out in Auckland but it'll be a while before this flows onto FBU's bottom line.

You've got your wish ..... good luck with your pyramid

[Shooter]

Does anyone know when FBU are supposed to report their half year result?

[Bobcat.]

FBU are scheduled to report next Wednesday Feb 17. Buy low ($7.10-ish, Tuesday 3pm-ish?).

[POSSUM THE CAT]

Belgarion $6.50 would be closer

[Hoop]

Results better than market expectation..watch this baby jump today:D

[Hoop]

Happy holder :) as I said - $7.50 felt about right :)
well done ...Belg:cool:

[macduffy]

Happy holder :) as I said - $7.50 felt about right :)

or, alternatively


Seems we're being primed for a less than spectactular result and I'm guessing the market will punish ... 7.10 or less looks very real.

Whatever, the market likes it and re-rates accordingly. FBU's positive outlook seems to have rubbed off on STU too.

;)

[beacon]

For the time being ...
Greener pastures elsewhere ...

[peat]

so earnings were $150m but profit was only $1.3m ??

in case you hadnt noticed fundamental analysis is not my strong point....

[macduffy]

so earnings were $150m but profit was only $1.3m ??

in case you hadnt noticed fundamental analysis is not my strong point....

Hi peat.

Where does that $1.3m number come from?

:confused:

[Bobcat.]

Here's the result:

Total operating revenue: $3,393m; down 10%; $3,757m.

OPERATING SURPLUS BEFORE UNUSUAL ITEMS AND TAX: $219m; down 10%; $243m.

Unusual items for separate disclosure: 0; n/a; (19)

OPERATING SURPLUS BEFORE TAX: $219m; down 2%; $224m.

Less tax on operating profit: $59m; up 26%; $47m.

OPERATING SURPLUS AFTER TAX BUT BEFORE MINORITY INTERESTS: $160m; down 10%;
$177m.

Less minority interests: $6m; up 20%; $5m.

OPERATING SURPLUS AFTER TAX ATTRIBUTABLE TO MEMBERS OF LISTED ISSUER: $154m;
down 10%; $172m.

Extraordinary items after tax attributable to Members of the Listed Issuer:
0: n/a: 0.

OPERATING SURPLUS (DEFICIT) AND EXTRAORDINARY ITEMS AFTER TAX ATTRIBUTABLE TO
MEMBERS OF THE LISTED ISSUER: $154m; down 10%; $172m.

Earnings per share: 25.5 cps; down 25%: 34.1 cps

[peat]

Hi peat.

Where does that $1.3m number come from?

:confused:
looks like I made a mistake although I would swear thats what I saw this morning when looking on the nzx site to see the numbers....okay forget my post - I wont delete it as it would throw the thread out a bit....

[nissan]

Where please

[nissan]

Where please beacon

[macduffy]

Where please

Announcements at

www.nzx.co.nz

:)

[beacon]

Where please beacon

In NZ for the moment, delevering will give you 12% risk free before tax approx. Beat that ...

[nissan]

Could you please explain more Beacon I have no idea what you are talking about but I am very interested in a risk free 12% return . Thanking you

[GR8DAY]

hey BEACON i want 12% risk free gross too.......how do I get it??

[winner69]

Earnings down 10% .... but EPS down 30% .... as a result of the capital raising last year

Forecast earnings this year $300m odd is 50 cents / share so at $8 on a PE of 16

FBU traded throught he good years on a PE of 9-10 .... so currently priced to make record profits of $500m

Lots of good stuff expected in the current share price

[Zito]

Earnings down 10% .... but EPS down 30% .... as a result of the capital raising last year

Forecast earnings this year $300m odd is 50 cents / share so at $8 on a PE of 16

FBU traded throught he good years on a PE of 9-10 .... so currently priced to make record profits of $500m

Lots of good stuff expected in the current share price

I agree. When I saw the result I thought the share price would remain steady at $7.50, at best. The price action leading up to the announcement was bearish, which I took to be a sign that the result wouldn't be too exciting.

I also believe a PE of 15-16 is too high given the uncertainty surrounding the industry and the economy. Obviously the market disagrees but with a shareprice of $8.00 it looks expensive to me and I've voted with my wallet (which is firmly closed at the moment.)

[beacon]

cheapest long term loan = 5 year mortgage @ 8%
(seeing that you have spare cash now looking to invest, presume from savings from a reasonable job)
Repay loan, if you have any @ Tax rate assumed 33%= before tax 11.9% = risk free (8/0.67)
Repay loan, if you have any @ Tax rate assumed 38%= before tax 12.9% = risk free (8/0.62)

Are you sure FBU will return you 13% this year in capital gain + gross dividend?
I'm not so sure ...

[percy]

Craigs have upgraded their target price from $8.75 to $8.93.
They note outlook commentary more optimistic than in the recent past.

[Bobcat.]

I agree with you Belgy - without the Government funded insulation programme, FBU's results would have been quite dismal, and they can't expect that programme to prop them up through 2010. Until their core business has some notably improved revenue forecasts, I'm staying clear of this stock with its sp anything higher than 7.50.

BC

[LJB]

Anyone able to clarify how much completion of RWC 2011 projects will contribute to FBU results over the the 2010/11 year? Will earnings from those projects see the company through to a more normal trading environment in the future and eventual recovery in earnings from recession sensitive divisions?

[percy]

Forbar have increased their valuation from $9.54 to $9.79 and have as an accumulate.

[Bobcat.]

Forbar are dreaming, and expecting others to step out of the real world to join them.

[percy]

Kar Yai at First NZ Capital has a valuation target of $8.75

[beacon]

Kar Yai at First NZ Capital has a valuation target of $8.75

Looking for the greater fool..

[percy]

I see FBU closed at $8.35.Looks as though they are finding a lot of them!!!

[Hoop]

I see FBU closed at $8.35.Looks as though they are finding a lot of them!!!

Yeah...I'm one.:p

Not often I wish for a share to stay down in price..but I do with FBU atm.

FBU is in a trading range situation at the moment between $7.50 and $8.50.

Like Belg I bought in at $7.50ish and unlike Belg I stayed in at $8.00....and hoping to exit near the $8.50 mark. It would be nice :) if that happened sometime in April*** rather than next week.

If FBU breaks through the $8.50 resistance without me I "may" be tempted to buy back in...but that's another story.

***The share goes ex-div (14c) on the 31 March.

[Jay]

Same here Hoop, I am also hoping it stays up until April at least, won't complain if it is still rising in May or June or .... (above current levels

[peat]

heres one for you ENP, one of those major (in fact NZ No1 by cap) shares folks dont talk much about, but seems pretty important to me.
price was strong y'day, though it hasnt gone anywhere since Feb when Belg and a few others said they were getting out at 8.00

for trading purposes its had a 10% range in the last month and a 40% range in the last year

Theres a good article in the herald today with Ling explaining how they got thru the GFC and aspirations to be included in an Australian index
"Fletcher aims to qualify in the next year for the S&P/ASX 300 Index and only liquidity issues stand in Ling's way. If that can be achieved, the giant Australian superannuation funds are bound to buy shares. Institutional shareholders on the register should rise."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10645027&pnum=0

heres a graph of the last year compared to the Aussie S+P Material index (XMJ)
FBU is the blue line
On Balance VOlume is included (for Phaedrus) and note that RSI has just bounced back up through the oversold line

[PhaedrusFollower]

Ah...Phaedrus...I got out at 8.10.... but FBU is my favourite share of all time....what are the signals telling you...7.61 is the cheapest this has been for a while... thx...PF

[Kosau]

7.61 today , decent buy ?

[darksentinel]

It's a down-trending stock, there aren't any buy signals that I can identify.
While 7.61 looks like a good price, I'd wait for some buy signals first. Otherwise, the current market climate being what it is, you could easily watch the price (and value of your portfolio) spiral downwards.

[Hoop]

It's a down-trending stock, there aren't any buy signals that I can identify.
While 7.61 looks like a good price, I'd wait for some buy signals first. Otherwise, the current market climate being what it is, you could easily watch the price (and value of your portfolio) spiral downwards.

If the trading range is volatile enough some money can be made doing range investing:)
but...when buying a sock that is in the process of testing its support lines TA indicators usually look ugly:(

..FBU has been a hot favourite in my portfolio over the last decade...ditched it during the 2008 crash for obvious reasons, and for a while now I've been jumping in and out of this range bound stock. The last time I got out... averaged just over $8.00 well short of the expected $8.50 however the 21c dividend helped make up the shortfall... a nice added bonus:).



Happy holder :) as I said - $7.50 felt about right :)

Belg...you must be watching this stock again ...heh.. are you a happy holder again?


7.61 today , decent buy ?

I'm cautious this time (orange arrow)..there's are new players in town ..the March 18th 2009 broken trend line, the Bollinger Bands (not shown) are different this time and the NZX market index is a bear, P's NZX index MSI is red...Hmmmmm..lots of bearish factors are in play this time.... I think if there was ever a good chance this 9 month trading range could break and end it would be now...so I may wait for the 7.60 support bounce and then see.


Note...on my chart 7.60 is the closing day support line..A truer support line would be the intraday 7.56 ish.

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU05072010.png

[Phaedrus]

Here are some oscillators that could be used to trade FBU. All utilise default parameters and none are indicating a buy at the moment. Guess which is my favourite.

If this is all too much for you, there is always the option of simply buying FBU at $7.70 and selling at $8.40. That will work - until it stops working. The big drawback is that such a system guarantees that you will be on the wrong side of any major move. If FBU falls out of bed, you will be holding. If it breaks upwards and rockets North, you will have already sold.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU76.gif

[Hoop]

Here are some oscillators that could be used to trade FBU. All utilise default parameters and none are indicating a buy at the moment. Guess which is my favourite.......

Hmmmm....OBV?

[Phaedrus]

:D Yeth! :D

[winner69]

This in the Sydney Morning Herald


Cut-price Boral still looks expensive

DAVID SYMONS
July 9, 2010

Boral's strategic review, announced on Tuesday, is going to take some selling. At least, that's the message from yesterday's sharply lower share price.

The six-month strategic project culminated in a $289 million impairment charge together with a corporate restructure, investments of $355 million and a $490 million capital raising.

Significantly, this year's profit guidance accompanying the review was at the low end of expectations. Analyst numbers for next year have also been pulled back, in part due to the acquisition of 50 per cent of the loss-making MonierLifetile, a manufacturer of concrete roof tiles in the US.

Boral had spent a couple of days in a trading halt, so the first pointer to the market's response came yesterday when the book-build of shortfall shares from the institutional component of the company's one for five entitlement offer saw the shares sell for $4.65.

This was a discount of 2 per cent to the theoretical ex-rights price, far from a disaster, but a weak signal on a day when the market was up more than 100 points. But there was further weakness when trading began after lunch. By day's end Boral was trading at just $4.40.

There's a risk there's worse to come. Goldman Sachs JBWere summarised the situation by telling clients that Boral was trading on 14 times 2011 price/earnings multiple prior to the trading halt. However, with downgrades flowing through following the strategic review, yesterday's close of $4.40 represented a 16 times multiple.

With uncertainty increasing over the timing of any recovery in US residential construction, a de-rating could be on the cards


FBU has always been seen to be the 'cheaper' than Boral .... however in the context of the above comments FBU currently trading at 15 times this years expected earnings doesn't exactly put in the 'cheap' class at the moment

[percy]

In today's Sunday Star times Jenny Ruth article "Fletcher through worst but outlook remains"woobbly" "analysts valuations are;Kar Yue at First NZ capital $9.50,Rob Mercer at Forsy th Barr $9.53,Matt Henry at Goldman Sachs 12 month target $9.40.Emily Behncke at Deutsche Bank in Sydney with a $464m 2011 forecast,rising to $635m in 2012,said Fletcher is one of the cheapest Australasian building stocks.

[winner69]

... but did you read that bit about the FNZ analyst who knocks 2.4% of his valuation for every 1000 change in his consents number ... has a forecast of 22000 consents in a year or so ... some industry insiders think it will be 14,000 .... so a downside on his valuation is nearly 20%

[percy]

no mention of "some industry insiders" in the article.

[winner69]

w69, I'd be a bit careful of the 14,000 figure. There's plenty of consents in the pipeline with various bottlenecks in the system holding things up - the figgin' super city transition being a major one as the new building rules are holding things back in many areas that have more stringent rules than what we're going to see once the SC is operational. (Geez, I hate this SC crap!)

Belg maybe so but even so residential currently still weak. It appaears as if the current cycle in consents will top later this year at about 17000 pa (long term average 22-23000) before heading down to that mentioned 14000 level again. (Yes Percy insiders were not mentioned in that article ... it was my comment in response to the FNZ analyst comment)

Thats the difference between analysts/economists or believe that things will always revert to the mean sometime (that FNZ analyst will always have a forecast of 22000 units eh) without understanding the real drivers of the building cycle.

I'm sure that FBU also believe that there is real possibility of this 14000 number happening again next year ... and planning accordingly .... housing in Aust looking OK but not brillant .... and the only hope in the US is that it has become cheaper to build than buy even though there are zillions of unsold houses out there owned by the banks

FBU usually 'cheaper' than Boral and that article says Boral over valued at 15-16 times earnings and that is what FBU is trading at the moment ..... and remember that FBU has historically traded around 10 times earnings

Fundamentally I see little in the way of decent returns from owning FBU shares over the next few years ..... but FBU does behave very well from a TA perspective so keep an eye on the chart .... that will tell what sentiment is really like

[PhaedrusFollower]

I'm in at $7.74....I'm happy to take 10% anytime it is on offer and a very simplistic look at Hoops chart shows...when it bounces of 7.60...it gets a run on and inevitably ends up above $8....and P, I won't sell at 8.40 if it's in an uptrend...but will stop loss it after that...because i don't have OBV to tell me when to sell! We'll see how this little experiment turns out...my prediction...I will be out at 8.40 by end of October.

[peat]

PF
you can get OBV from http://findata.co.nz/Markets/Charting.aspx

2783

[PhaedrusFollower]

Awesome...thanks vmuch Peat...I hadn't registered so didn't ever get to that screen! ...That's great...now I will be rolling in TA bliss. Up 1 cent on purchase price currently... 69 to go..

[Kosau]

FBU seem like have problem staying above 7.75 ....... it keep dropping back to 7.70 once it reach 7.75ish

[Doyle]

Seems to be testing the bottom end of this years trading range, Personally can't see it breaking this support unless something particularly glum comes out in the annual results. I certainly hope so, I have leveraged up and gone long on this one. Picking it will test the 850 resistance line by the end of september.

Well I hope so anyway.

[winner69]

Some pretty pessimistic forecasts re building activity in NZ over the next few years flloating around ... even the Aussies are having doubts as to whether the building recovery get a full head of steam for a while ... and US what else need be said

No wonder FBU sharerice languishes ... punters holding in hope of some good news tp give it a boost might be disappointed

[Shooter]

When are they supposed to be reporting - it should be any day now. Can anyone confirm? Thanks.

[Doyle]

18th August, Lazy Question shooter lol.

[winner69]

well that 760 support level been broken true and proper ... hope those hoping for thr 760 to 840 trade still not holding

With announcement next week this weeks actviity been pretty ominious ... esp closing at days lows the last few days

At 735 lowest for a long time .... surely not heading back to 540 is it .... surely not

Prospects for building related stocks with interests in NZ, OZ and US not all that bright for the next few years

Next week ... everybody knows pretty well what the result be .... way the shareprice is heading mr Ling's words might be a bit depressing .... but heck what do i know ..... this week action might just be a temporary blip on the chart and the 840 will come in momnth and then 900 and then 1000 again

[winner69]

I note that the James Hardie said he was surprised how bad the US housing market is ... they thought 2010 was going to to be the bottom but now thinks that 2011 is going to be worse .... and US housing starts at 50 year lows

Mind you they did double profits in Aust and NZ

http://www.smh.com.au/business/us-housing-market-looks-grim-for-hardie-20100812-121p0.html

[Doyle]

well that 760 support level been broken true and proper ... hope those hoping for thr 760 to 840 trade still not holding

With announcement next week this weeks actviity been pretty ominious ... esp closing at days lows the last few days

At 735 lowest for a long time .... surely not heading back to 540 is it .... surely not

Prospects for building related stocks with interests in NZ, OZ and US not all that bright for the next few years

Next week ... everybody knows pretty well what the result be .... way the shareprice is heading mr Ling's words might be a bit depressing .... but heck what do i know ..... this week action might just be a temporary blip on the chart and the 840 will come in momnth and then 900 and then 1000 again


Yeah I've been bounced out of it, at a fairly decent loss too. Tempted to go long again but with the close today support lines are well and truly broken, theirs a naturl support at $7.00 would take some getting too to get there

Food for thought, PGW more or less met their profit forecast today, Infact not including tax changes they beat it. Most analyst were predicting they would not get near the forecast and still had outperform recommendations on it. Shareprice drops four cents.

What happens next week with FBU I don't know, I really want to go long on it but, with the support lines broken so badly on an up day, I guess i just cant justify buying at the moment.

I think the news out regarding PPP's from national should help to shore up their workbook.

Is it a buy or a sell, well I guess if your planning on having your money in equities in 5 years time then FBU really has to be a buy.

But the price direction for the rest of the year, I can see it going either way and thats why I can't invest for now.

[COLIN]

Well, looking at the FBU charts I would say that none of the savvy posters on this forum should still be holding at this stage. The pronounced rate of decline in the OBV which started a few weeks ago should have been treated as a particularly strong signal to push the "sell" button. I must admit that I held on too long, myself, and didn't sell until the end of July.

I have basically lost interest in the NZ equities market these days, and am finding far more lucrative opportunities on the ASX, by observing my oft-repeated mantra: BUY INTO STRENGTH, SELL INTO WEAKNESS. Even on days when the overall market has been pretty horrible I have found that selective buying has been rewarding.

[winner69]

At 735 lowest for a long time .... surely not heading back to 540 is it .... surely not


No doubt FBU will be close to that $300m NPAT most are estimating for this year - about 50 cents a share

So at 735 on a PE of nearly 15

Take the upper end of FBU historical PE range and apply a 11 PE and ones gets 550 - jeez the share price spiked down to about that a while ago --- as P would say spooky eh ... maybe 550 is the next level .... just by being rerated to past levels at a time future prospects not that great

[winner69]

The rout continues ... not helped by the headlines in The Herald

Building and building supplies not the place to be at the mo ...... wonder what Ling will say this week .... prob a bit more positive than what he really thinks ... for the good of the comapny and all that sort of stuff

But as long as the man from Forbar has forecasts of activity getting back to the norm soon we'll be right .... analysts and forecasts always have forecasts getting back to the norm don't they.

[GR8DAY]

......popped into Carters (tauranga) last week.........you could have heard a pin drop in their huge warehouse........hardly another customer there......in fact it's been like that for sometime now. Almost embarrassing for the guys behind the counters......they all look like they're just filling in time........never had such great service in all the years Ive held an account there!! Graham Hart must be a worried man on that count (if he's still the owner?)......pleased I have no links to that industry.

[winner69]

See that NBR on the bandwagon regurgitating the same old story but makes good headlines

At the rate the shareprice is falling it might have 6 in front of it by the end of the week

But as long as Forbar think the worst is over and it is all good news in the future shareholders will be alright

[Doyle]

See that NBR on the bandwagon regurgitating the same old story but makes good headlines

At the rate the shareprice is falling it might have 6 in front of it by the end of the week

But as long as Forbar think the worst is over and it is all good news in the future shareholders will be alright

Results out more or less as expected, although who would have thought formica is actually making some money yippee. lol. I think The SP has already priced in the result, with no comments on outlook. But don't see any reason to buy just yet.

[Lizard]

Perhaps they should have got onto the school-building sector :)

Construction tenders around our neck of the woods have been pretty weak for first half of this year, with a real low around June/July. Starting to pick up a bit again now, but perhaps still more about fit-outs than new builds. From the little I've seen, margins are probably tight right through supply chain as everyone slugs it out for work. Maybe need a few more dead bodies in the sector/reduced capacity to get some margin back before the construction sector will seem like much of a place to be invested? But maybe it's just a local problem and not affecting a large, diversified group like Fletchers...

[percy]

Perhaps they should have got onto the school-building sector :)

Construction tenders around our neck of the woods have been pretty weak for first half of this year, with a real low around June/July. Starting to pick up a bit again now, but perhaps still more about fit-outs than new builds. From the little I've seen, margins are probably tight right through supply chain as everyone slugs it out for work. Maybe need a few more dead bodies in the sector/reduced capacity to get some margin back before the construction sector will seem like much of a place to be invested? But maybe it's just a local problem and not affecting a large, diversified group like Fletchers...
I donot Know of any sector where your comments would not be applicable.Everyone,is well positioned for the upturn!!!.

[Lizard]

Everyone,is well positioned for the upturn!!!.

Yes - "well-positioned" and "well-placed" seem to be the most over-used phrases in this results season so far, so I'm with you in waiting for "well-poised"... :cool:

In fact, I reckon the point for this results season is to pick out the companies that are prepared to suggest that they might be slightly more than "well-positioned". So far I have a couple on the ASX (DWS, TWO), but still holding my breath for some on the NZX.

[PhaedrusFollower]

Hmmm....just back into coverage after a couple of weeks and ...whoa....what is happening to my favourite share of all time? Phaedrus.... I'm assuming there's no buy signals?

[Catalyst]

PF - I think the market has got FBU's pricing ($7.40) about right at the moment given management's cautious comments about the construction market.

From last week's FY10 result:

PE = $7.40 / ($301.5m/606.9m shares) = 14.9x
EV/EBITDA = (606.9m shares x $7.40 + $1,107m net debt) / $727m = 7.7x
Gross dividend yield = 29c / 740c / 82% (only partially imputed) = 4.8%

PF - what multiples do you think FBU should be trading at?

I would guess it should be trading at a PE of between 14.5 - 15.5x or an EV/EBITDA ratio of between 7.5 - 8.0x.

PE of 14.5 - 15.5x = 14.5 to 15.5 x ($301.5m/606.9m shares) = $7.20 - $7.70
EV/EBITDA of 7.5 - 8.0x = (7.5 to 8.0 x $727m - $1,107m) / 606.9m = $7.16 - $7.76

[Phaedrus]

No buy signals yet, PF.

[Tanger]

FBU has been awarded the contract to build the new ASB building in the Tank Farm. They seem to have a virtual monopoly on the big construction projects around Auckland. All positive news.

[Lizard]

http://www.nzx.com/news/economy/4057796/Construction-sector-braces-for-drought


Hawkins Construction chief executive officer Chris Hunter said infrastructure and construction projects for the Rugby World Cup had delayed the "recessionary hit" for nine to 12 months but he expected work opportunities in Auckland and the South Island would halve next year.


His view was echoed by Fletcher Building general manager of investor relations, Philip King.

"One of the problems is that we have a number of large projects finishing and starting. When the work is lumpy, it's hard to get things paced."

Maintaining the workforce was a juggling act in the current environment, he said, with no rebound on the horizon.

"The finance sector is constrained, business investors are apprehensive. There are no new developments coming, no new shopping centres, no new warehouses. It is definitely subdued," Mr King said.


Fletchers won the Eden Park revamp and AMI Stadium redevelopment in Christchurch. "It has been beneficial, but that has exacerbated the dip we will see in 2011," Mr King said.

[winner69]

Back in Feb 2005 the FBU shareprice was $7.18 and the diidend yield was 7.3%. At the same Fletcher capital Notes / Bonds were yielding 7.5%

Currently with a shareprice of $7.75 div yield is 4.5%. Fletcher notes still yielding 7.5%

You seem to be avle to get Govt stock for around 4.0% (call that the country risk) so the notes punters have impplied the company risk is about 3.5% points which seems fair enough

With a dividend yield of just 4.5% (gross) no equity risk premium built into the shareprice at all .... are shareholders taking on too much risk or soemthing else underneath all this

Just another way at looking at what a reasonable price for FBU is

[LJB]

I don't want to sound insensitive, but the earthquake in Chch region should be a win for FBU with significant reconstruction projects over the next year or so.

[winner69]

I don't want to sound insensitive, but the earthquake in Chch region should be a win for FBU with significant reconstruction projects over the next year or so.

Yep disasters like big quakes are good for economic growth ..... if it is $2 billion plus to put the carnage right that will add more than 1% to NZ's GDP for a while

And timely for the likes of FBU as commercial and infrastructure s[end was heading into a rut

[Lego_Man]

I don't want to sound insensitive, but the earthquake in Chch region should be a win for FBU with significant reconstruction projects over the next year or so.

Should hopefully offset the money i'm going to lose on TWR...

[CJ]

Should hopefully offset the money i'm going to lose on TWR...Yes - I have that natural hedge as well.

[PhaedrusFollower]

This will light the buy signals up... $8.10 at present

[CJ]

This will light the buy signals up... $8.10 at presentBut does it have to be discounted since it relates to a one off event and I assume the big jump accounts for the upside from the ChCh quake?

I hope it does as I like Belg, I hold more FBU than Twr so it has been a good day so far.

[Lawso]

Too far, too fast - bye, bye for now.

It's you that might be "too fast", Belg. I'm holding on and enjoying the ride. But it might be a while before they recover to the price when I gifted some to five grandchildren - around 1200 if I recall correctly.

[LJB]

Crikey. I sold FBU at 8.20 just before the big plunge a month or two ago and instantly took no more interest in the SP. I just looked at ticker and see FBU at 8.70!!!!! I better get in before Wellington gets a shake up. Are these gains sustainable even with big rebuild work in Canterbury? I would have thought things would need to look a bit flasher in construction in Europe and US for these gains to hold up for long. But, what do I know.

[winner69]

Forbar are dreaming, and expecting others to step out of the real world to join them.

Don't forget that Forbar are pretty good at predicting catastrophic events .... there record goes as far seismic ones now

Prob increase theit frecast to $12 now

[winner69]

Surely that infamous $8.60 line on the chart is not going a play a part in the future direction of the FBU shareprice

Resistance often turns to support so they say

With the $100 additional EBIT from the Chch quakes (one estimate) and the Formica man saying his part of the business is going to get to $100m soon you would hope that 860 is indeed suupport going forward

Amazing what some lines on a chart mean at times .... Belg sort of believed in them cause he has sold at 870 but then again he sort of does not believe the resistance turns to support story else he would still be holding

[winner69]

Hope rebuilding Christchrch is going to be goldmine for FBU et al ..... they will need something to fill the gap if cuurent building consents data out this morning anything to go by .... residential consents in August down 9% from July .... and non residential consents falling into a big hole

Aussie forward looking data not looking too great //// and in spite of what the Formica man says may as well clsoe down the US now

Amazingly FBU share price has performaed wonderfully well the last month r so .... esp relative to its peers in Aust like Boral and James Hardie

But thats good that Morningstar are getting bearish ..... the opposite will happen

[CJ]

Interesting ... Mornstar have come out with a 7.40 valuation published yesteray and a REDUCE recommendation ... last time brokers/researcher did this FBU headed down to 7.40 odd ... Is the current price supported by just dividend strippers?


But thats good that Morningstar are getting bearish ..... the opposite will happenTwo big down days in a row. Someone is taking that Morningstar report seriously.

I thought it was ramped a bit too much after the quake but hope it doesn't get back down to 7.40.

[CJ]

I can't see how it can't. Im ready and waiting ... :)

Did a quick investigation. Credit Suisse has a valuation of over $9 as at 1 September. I can see the Morningstar valuation on ASB but cant see the report to justify the downgrade.

The drop on Wednesday was primarily due to it going ex div. Was the drop on Thursday an overreaction, caused by div strippers getting out, or some fundamental change from what pushed the price up for ~$7.5 to $8.5? My opinion is it got a bit to far ahead of itself so probably just a bit of both. Will see where it finds support going forward.

With another sideways day from wallstreet, it will probably come under more pressure today.

[winner69]

7.40 ... ;)

http://www.stuff.co.nz/business/4186000/Building-falloff-to-dent-economic-growth

we are at the peak of this building cycle and things are looking tough for 2011 and 2012 .... just look at the things that drive building activity

Due to the lag between consents and actual activity the likes of FBU will see some growth this year ... but the next couple of years are not looking like boom times .... and the same story unfolding in Aust ..... and the US well enough said

FBU price well ahead of itself .... by 2 years at least I reckon ... but heck what do I know anyway

[Hoop]

If the trading range is volatile enough some money can be made doing range investing:)
but...when buying a sock that is in the process of testing its support lines TA indicators usually look ugly:(

..FBU has been a hot favourite in my portfolio over the last decade...ditched it during the 2008 crash for obvious reasons, and for a while now I've been jumping in and out of this range bound stock. The last time I got out... averaged just over $8.00 well short of the expected $8.50 however the 21c dividend helped make up the shortfall... a nice added bonus:).




Belg...you must be watching this stock again ...heh.. are you a happy holder again?



I'm cautious this time (orange arrow)..there's are new players in town ..the March 18th 2009 broken trend line, the Bollinger Bands (not shown) are different this time and the NZX market index is a bear, P's NZX index MSI is red...Hmmmmm..lots of bearish factors are in play this time.... I think if there was ever a good chance this 9 month trading range could break and end it would be now...so I may wait for the 7.60 support bounce and then see.


Note...on my chart 7.60 is the closing day support line..A truer support line would be the intraday 7.56 ish.

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU05072010.png

Looking back to the beginning of July my caution paid off as I didn't enter into FBU at the orange ? buy trigger point ... I decided to wait for the confirmation higher high but it didn't happen so I stayed out of FBU that time.
Since then we had a bear trap which didn't catch me as I'm not a bear investor (shorts) and was out of the FBU market. Got into FBU when the 7.50 range was re-entered again and when the retest held 2 September (confirmation) just in time luckily as it gapped upwards after that weekend, rode it up to the $8.50 level again sold out..then bought back in when the 8.50 trading range + trendline was beached..Snap! :scared: got caught in the Bull trap but luckily escaped with a very minimal loss :):p.


7.40 ... ;)

http://www.stuff.co.nz/business/4186000/Building-falloff-to-dent-economic-growth

Yep..kinda looks that way Huh..Belg

Well this Trading Range Investing Strategy with FBU has been very profitable for me so far...You too.. Belg I suspect?

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU30092010.png

[CJ]

Looks more like a large seller of 400k was just desparate to get out.


Just $1 million through today (at 1:20pm) with parcel sizes suggesting just mums and dads playing ... Next stop $7.70Big players getting out. Small players staying in. Doesn't look promising.

[CJ]

FBU has risen substantially (currently 8.42), especially when you consider it is ex a 14c Dividend in the past couple of weeks. Can it keep going through 8.50?

[Lego_Man]

I'm out with a 15c dividend entitlement and 8.38 per share. Pretty good exit opp at the moment if you are that way inclined. I think the company is fairly fully valued.

[macduffy]

http://www.directbroking.co.nz/directtrade/dynamic/announcement.aspx?id=2622498

Isn't this getting the fox to manage the chicken coup?

Yes, that was my first reaction too. But in reality, who else has the experience and skill set to handle this job? I heard a report on National Radio that Mainzeal and some others also tendered for the work but I'm having trouble tracking down further information.

Any links around?

[Piggy]

The stock had gained 19c yesterday. Fletcher Building was advised last night it won the contract to manage the Earthquake Commission's project management office for the repair of houses with damage costing between $10,000 and $100,000. It was believed that failed bidders were notified yesterday.

Fletcher Construction said the contract could be worth as much as $1.2 billion and it would be the biggest job it has ever done in New Zealand.

http://www.stuff.co.nz/business/market-data/4238629/Focus-on-Fletcher-Building-in-weak-market

1.2 billion? For the PMO? Surely this is a misquote? 1.2billion would be FBU's overall involvement wouldn't it?

market down on this news. what is going on?

[macduffy]

Yes, belg, a lot of numbers being thrown around at the moment but the $1.2b must be the value of work overall for FBU from the Christchurch earthquake. But maybe just the residential bit?

Clarification required.

[CJ]

Yes, belg, a lot of numbers being thrown around at the moment but the $1.2b must be the value of work overall for FBU from the Christchurch earthquake. But maybe just the residential bit?

Clarification required.My understanding is they had won all the work where the damage was between $10k and $100k. This is from the earthquake commission. Above that amount, I guess the individual insurance cos get to choose who does it.

[macduffy]

"Fletchers won't bet the farm on takeovers"

From The Australian today.

http://www.theaustralian.com.au/business/fletcher-wont-bet-the-farm-on-takeovers-in-australia/story-e6frg8zx-1225945851339

[peat]

"Fletchers won't bet the farm on takeovers"

From The Australian today.

http://www.theaustralian.com.au/business/fletcher-wont-bet-the-farm-on-takeovers-in-australia/story-e6frg8zx-1225945851339

would've thought they got pretty close to doing that with Formica.

[Anna Naum]

would've thought they got pretty close to doing that with Formica.

Maybe they have learnt something from that mistake, or is it that they will no longer buy from PE?

[macduffy]

RBS Australia has rediscovered FBU!

From FN Arena

"FBU - FLETCHER BUILDING LIMITED
RBS Australia rates FBU as Buy - Reinitiation of Coverage (1) - Target NZ$9.13. The broker has reinitiated coverage on the company with a Buy rating, attracted to the company's significant leverage to improving activity levels and a favourable macro backdrop.
There is also potential the stock is included in the S&P/ASX200 Index and the broker sees this as a potential positive catalyst for the stock.

Current Price is $6.10. Target price not assessed.

The company's fiscal year ends in January. RBS Australia forecasts a full year FY11 EPS of 46.48 cents .

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.13.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values. Market Sentiment: 0.5 "

[Lizard]

Trading halt, so wonder what is up?

[Balance]

Sp has been trending down before announcement.

Knowing NZ's market, an acquisition and capital raising on the cards?

[bull....]

buying crane grp

[winner69]

If the Crane takeover goes ahead it should be good for FBU over the long term

Crane has pathetic returns on invested capital over many years .... it has averaged 9% over the last 10 years with the last year a miserable 6%. Even at the top of the cycle when most things are favourable its return on invested capital has only reached 11%

Even if we use a cost of capital of the 9% CRG isn't / hasn't created any real wealth over many years. As such even putting a value of $650m (say $8) on CRG's equity is being pretty generous ... accordingly CRG shareholders should be bloody happy with getting heaps more.

The eventual returns to FBU would be from imposing FBU disciplines and practices into Crane to make greater returns on investment as well as any synsergies that should become available

Crane is a good fit with FBU and no doubt will be beneficial to them over time

They say EPS accretive this year ... the presentation shows that this is really in the roundings but not lets get in the way of a good story .... and if they end up paying more maybe won't be eps accretive this year

On the numbers you can see why the market didin't get too excited about (at least for FBU shareproce) .... FBU still probably overpriced at the mo anyway but a CRG acquiaition should make valuations abit more realisitic

[winner69]

Good defence from Crane.... 'we could make more money when things get better but essentially we are stuffed even though we try very hard and you greedy buggers want to make heaps out rationalising the 2 businesses'

They just don't seem to get it ..... the synergies on;y come if one takes over the other ..... and yes they can share in those synergies if they keep their FBU shares

Maybe a bit extra will convince them

[Xerof]

Yep - fairly spurious arguements as you say W69 - read it as "you can't take us over - we'll lose our Directorships"

[Kosau]

Fletcher Building (FBU): New Zealand biggest construction company said it will not lift its bid for takeover target Crane Group after the Australasian pipe and plumbing company said the A$9.35 cash and share offer was "inadequate and undervalues the company".

[CJ]

Yep - fairly spurious arguements as you say W69 - read it as "you can't take us over - we'll lose our Directorships"

I didn't read the release, just the newspaper articles, but the statement didn't give much confidence to current investors. It wasn't, they have undervalued the company, just they aren't passing on the synergy benefits. Those benefits are being passed on via the part share payment so it is good to see FBU holding their ground.

No doubt they will be talking to institutions to ensure they are offering enough to get them over the line.

[Tanger]

Another earthquake in Christchurch. Not as severe as the big one, but it appears there is more damage which means more new work for FBU. I wouldn't be surprised to see the share price jump up a bit again on opening tomorrow.

[voltage]

surely FBU must be a screaming buy now with aussie floods and earthquakes here. CAV will be having a fast filling order book too.

[winner69]

Sounds like the wheeling and dealing about who keeps their jobs etc has been done

We'll keep you on in a highly paid job and if we offer $10 this time around you can recommend to your shareholders to sell eh

Nice one .... hope there is a bob or two in it for FBU

[Casa del Energia]

Sounds like the wheeling and dealing about who keeps their jobs etc has been done

We'll keep you on in a highly paid job and if we offer $10 this time around you can recommend to your shareholders to sell eh

Nice one .... hope there is a bob or two in it for FBU

Yes - and I wonder how much this is going to cost me in share dilution and softened FBU share price. Not a happy camper.

[macduffy]

In case anyone missed the news, Crane board has recommended FBU's revised offer.

http://www.theaustralian.com.au/business/city-beat/crane-group-recommends-increased-fletcher-offer-to-investors/story-fn4xq4v1-1225997188015

[winner69]

These building product companies are getting pretty high valuations eh .... FBU paying 20 times earnings for Crane

On the same basis FBU should be over $11 (forecast F11 eps is 56 cents)

Just as well FBU has an over valued share price to play (and pay) with ..... hard to see how this is going to be eps accretive in year 1 (or 2) unless there are really heaps of synergies somewhere

With 80 mill new FBU shares (+13%) coming on stream will be interesting to see how the 'pro forma' accounts will look like

[winner69]

Aspect Huntly have FBU NPAT going from $301m in 2010 to $345m in F11 (jeez that man has some rose tinted glasses doesn't he) .... thats 56.9 cps

Add Crane NPAT of A$38.7m and allow for the extra shares you get the same number

So no damage to eps so everything should be OK for this bolstered up FBU

Did OK getting the spec dividend out of Crane ... sort of a subsidy

[winner69]

Market response pretty mooted eh

[peat]

interview with Ling

http://www.businessspectator.com.au/bs.nsf/Article/KGB-Jonathan-Ling-pd20110203-DQ9RR?OpenDocument&src=kgb

he implies results in a few weeks will be good ;+)

[Fortescue]

Seem to remember the same sort of hyperbole when Formica was acquired, I wonder if, given it's funding costs, it's cash positive yet? The best that can be said of Crane is that it'll probably be neutral as synergies compensate for the premium being paid; and the added complexity maybe compensated for by what must be a market upturn sometime - however Reece and Vinidex are very good competitors in the larger Australian market.

[Shooter]

Why is the Crane shareprice down some 68c today?

[CJ]

Ex div : http://www.google.com/finance?q=ASX%3ACRG

[GR8DAY]

yea like a hole in the head Winner...........get a grip mate!

[ratkin]

Surely this stock has to be a no brainer , christchurch almost going to have to be totally rebuilt.

[CJ]

Surely this stock has to be a no brainer , christchurch almost going to have to be totally rebuilt.
Agree but it wont come without logistical issues. Money for roads etc will be diverted from other parts of the country to Chch. Plus as we enter the second dip, house building in other parts of the country will stay on hold.

[macduffy]

I agree with that, CJ.

Major restraints in terms of affordability and capacity, particularly labour. But a great opportunity to give a boost to the apprentice schemes and employ more of NZ's unemployed youngsters!

A comment this morning that relocatable housing may need to be imported for short term accommodation. Nothing in that for FBU I would think but maybe a plus for the likes of Nomad (NOD).

[Hoop]

I didn't sell out at $8.50 this time...I gather you didn't either Belg?

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU25022011.png

[macduffy]

The market likes the fact that FBU now has its foot firmly on Crane with 74% of that company's shares.

FBU's SP up through $9 yesterday to a three year high. Maybe getting toppy but not a sell, for me, while that trend continues.

[percy]

I didn't sell out at $8.50 this time...I gather you didn't either Belg?

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU25022011.png

That breakout has certainly been confirmed and looks to me as though the up trend has a lot of mileage to it.

[Hoop]

The market likes the fact that FBU now has its foot firmly on Crane with 74% of that company's shares.

FBU's SP up through $9 yesterday to a three year high. Maybe getting toppy but not a sell, for me, while that trend continues.

Macduffy..target price ($9.60 - 10.00) says we have a way to go yet.
FBU has been a marvelous and mostly reliable trading stock over the past decade for me, just by using my simple TA methods that I share here on the forum .

A couple of key points of interest for the TA minded.
1... the breakout of the 7.60-8.60 trading range puts a floor (support) at 8.60 but more reassuring is the break through of a long term memory 8.85-8.95 Resistance line (orange) which become another floor.
2... Long memory R&S level can be spooky and should not be ignored...I have drawn in the purple 6 year $7.62 R&S line as an excellent of this ...You can see that in Jan 2011 Both primary support areas coincide just above the trading range bottom creating a huge support area and the selling pressure wasn't strong enough to crack it even with the retest on 2 February...this was a major bullish outlook then, so when a higher high happened (Green Arrow) at 8.05on the 4th Feb it was a screaming buy signal. (TA indicators buy signals also triggered around this time or earlier)

Note...This was before the 1/2 report and before ACCC approval for Crane takeover bid

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU25032011.png

[nosolution]

FBU is tipping down today. Do you see it hitting resistance at $9ish or making it down to $8.05 or so as the longer time frame resistance line suggests? I'm up now, wondering whether to get out and try to get back in after it falls -- or if I should just keep holding. Would love to hear peoples' thoughts.

Chur.

[Phaedrus]

Chur, don't even think of quitting FBU on the basis of todays "tipping down". FBU fell to $9.20 for a short time this morning, making a drop of 1.5%. This is trivial and nothing more than market "noise". The shareprice has since risen, but the attached chart shows the "situation" at its "worst". This should put things into perspective for you. FBU remains in a magnificent uptrend and, within this uptrend drops of over 3% are quite normal.

I don't know where, when or why you bought FBU, but the chart below features a wide range of technical indicators with their associated Buy signals marked by green arrows. You can see that none of these indicators are anywhere near triggering any Sell signals.

Chur, I get the impression you are quite new to all this. If so, here are 2 very simple rules that you might find helpful :-

(1) Never buy a stock that is in a downtrend.
(2) Never sell a stock that is in an uptrend.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU41.gif

[nosolution]

Hi Phaedrus,

Thanks. I've always just traded on fundamentals but am trying to keep in mind TA these days, which i know very little about. I bought FBU right after the earthquake, as it made a lot of sense to me that the external drivers of their future economic profit had just considerably changed.

Thanks again.

Oh, and Chur.. saw you liked that :)

[Phaedrus]

I have been making some inquiries and it appears that "Chur" is a colloquial term used predominantly in New Zealand meaning, variously,
A strong voicing of thanks.
A parting salutation.
A singular emotive response to a pleasing situation or event.

And I thought it was the poor chap's name!

[percy]

And I thought it was the poor chap's name![/QUOTE]

So did I.
Thought his name must be Churchill and had just shortened it to Chur.Chur is not in my Chambers School dictionary.!! Now looks as though I am going to have to up grade my dictionary,unless ofcourse I get Phaedrus so explain colloquial terms as well as charts.!!!!

[nosolution]

Haha! Sorry for the confusion lads. Yes, chur is really a colloquialism for cheers (which its self a colloquialism, no?). It's often in New Zealand a word assosiated with the dialect of the working class and I have heard it used frequently among house painters, plumbers, and the boys at Fulton Hogan (all of which I have worked along side). Again, I appologise for any confusion it may have caused you.

Chur,
Nosolution

[percy]

Haha! Sorry for the confusion lads. Yes, chur is really a colloquialism for cheers (which its self a colloquialism, no?). It's often in New Zealand a word assosiated with the dialect of the working class and I have heard it used frequently among house painters, plumbers, and the boys at Fulton Hogan (all of which I have worked along side). Again, I appologise for any confusion it may have caused you.

Chur,
Nosolution
Enjoyed the diversion.
chur

[ratkin]

Heres an update
3340

[percy]

ratkin,
thank you for the chart.the SP has reached my broker Craig's target price.As you point out being a long term holder I will hold.

[nosolution]

Lots of profit taking towards the end of last week but it seems that fundementaly FBU is still well positioned...wondering if I should buy some more.

[percy]

Lots of profit taking towards the end of last week but it seems that fundementaly FBU is still well positioned...wondering if I should buy some more.

I would hold off.FBU shareprice looks weak.So I think there is more chance of it going down,than going up.ratkin's chart should act as a warning to hold off.

[Hoop]

Lots of profit taking towards the end of last week but it seems that fundementaly FBU is still well positioned...wondering if I should buy some more.

Percy's advice sounds good, ratkins chart shows caution and so does my chart. The sharp uptrend has been broken but that is not a major issue as sharp uptrends don't last long anyway.

http://i458.photobucket.com/albums/qq306/Hoop_1/fbu18042011.png

[nosolution]

Expecting retracement down to $8.50 or so?

[ratkin]

Im hoping it wont go that low, placed my stop down there so that it wouldnt be hit
Should be plenty of potential buyers around to stop it falling too far. Hoops 8.86 might
be about right, didnt want to put stop there as i felt price could well go back that far
as part of its normal action.
Hoping it has another crack at 9.60 , rather than 8.60

[ratkin]

Looks like we might of reached the bottom of the recent decline. The long lower shadows on last two bars is a positive sign, as is the increase in volume that occurred yesterday
The decline went to 8.95 which is interesting as its the same price that was reached on march the 4th

3354

[CJ]

Big day in US today should lift it too. Hopefully it has turned upward.

[nosolution]

Institutional buying pressure this morning. Price up.

[winner69]

Crane sll gobbled up and put to bed and FBU market cap now over $6 billion and sales now over $10 billion

Now makes it bigger than the likes of Boral so unless Aussies are really really stupid they should be looking at FBU as the biggest player in the segment .... and nearly half their revenues come out of Australia and as soon as HQ moves over the Tasman it will be a real Aussie company eh

As they say Crane o[ossibly a game breaker for FBU so good luck to them and may the share price soar to $12 or $13 or maybe even $20 or more over the next year

With a market cap of $6b one would hope that operating profit (EBIT) would be closer to a $1 billion than the $600k they inidcated in a recent presentation

[winner69]

..... and probably they could make another $1 billion acquisition soon as well

[nosolution]

So my FBU stopped out this morning. Any thoughts on how to time when I buy back in would be much appreciated.

Thanks.

[nosolution]

I wish I had a technical reason to tell you why my stop was where it was -- but really i just trade on fundamentals and try to bring my stops up to lock in profits if there is a fall. Would appreciate some better advice on where to set stops. I do try to look at support levels and set my stops just below. Definitely more art than science at this point.

[Phaedrus]

I use a suite of 10 separate indicators to monitor FBU - but who needs 'em? The simplest system works just as well as the most complex. Here we have a trendline, a moving average and the usual OBV trendline break all coinciding nicely to give timely Sell signals.

NoSolution, I would suggest that these same indicators should provide good re-entry signals, when the time comes. So, you would be looking for :-

A break above the current (confirmed) trendline.
A break above a 20 day Simple moving average.
A break above the OBV trendline.
An Uptrend. (A higher high after a higher low.)

Re Stops. I maintain that Stops are for people that have no system. They are better than nothing at all, but will almost invariably be outperformed by other technical indicators and are often the last to fire.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU56.gif

[winner69]

And the real long term investor/trader is probably still holding as the long term uptrend starting March 2009 (and hitting the lows in July 2010 Jan 11) is still intact

On fundamentals and all that one might believe that in due course worth $10 to $12 (esp after the potential game changing Crane takeover) so the recent drop of 50/60 cents is not much - esp seeing that long term uptrend is still intact

So Belg with your long term view I would have thought you would still be confidently holding FBU

[percy]

And the real long term investor/trader is probably still holding as the long term uptrend starting March 2009 (and hitting the lows in July 2010 Jan 11) is still intact

On fundamentals and all that one might believe that in due course worth $10 to $12 (esp after the potential game changing Crane takeover) so the recent drop of 50/60 cents is not much - esp seeing that long term uptrend is still intact

So Belg with your long term view I would have thought you would still be confidently holding FBU
Well I am still there.Phaedrus's great chart painted a terrible picture.Sell,sell,sell.However going to the long term chart,as you pointed out winner69 FBU has been in a long term up trend since March 2009 ,sideways up,sideways up,hicup ?.It remains well above the 200 day moving average

[ratkin]

My system has yet to trigger a sell , long term i would say as long as stock stays above 8.60ish there not much to worry about.


3376

[Phaedrus]

The real long term investor/trader is probably still holding as the long term uptrend starting March 2009 (and hitting the lows in July 2010 Jan 11) is still intact. Very true. That chart was was drawn from the perspective of someone intent on trading the "medium term" trends.


Phaedrus's great chart painted a terrible picture. Sell,sell,sell. Yes, but these were all medium-term signals - as you have accurately observed, the long-term uptrend is still intact. No sell signals there, as yet.

Even "real long term investor/traders" need an exit strategy, though. Without that you are just holding and hoping, with no system in place to lock in your profits when the current long-term uptrend ends. Percy has noted that FBU "remains well above the 200 day moving average" but you can see that it has dropped below this many times as the uptrend continued. This, then, is not a suitable indicator to monitor this relatively shallow FBU uptrend.

Here is a chart showing the FBU situation since 2008. FBU is currently in a "long-term" uptrend and within this, it is in a rising Trend Channel. Here are some suggestions for Sell signals suitable for "long-term" investors :-

(1) A break below the trendline (Green).
(2) A break below the trend channel (Blue).
(3) A break below a Trailing Stop (Red).
The trailing stop shown here is derived from the FBU Average True Range, but for those without access to this indicator, in this case it is roughly equivalent to a 16% Trailing Stop.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU57.gif

[percy]

Ratkin;thank you.
Phaedrus;Thank you.I have taken a lot from your sell signals for 'long-term" investors.

[ratkin]

Nononsense want to know when to buy back in ,fundamentally i cant see anything
wrong with buying tomorrow if the price is strong
If i had bought based on fundamentals then i wouldnt of sold , as fundamentally nothing has changed. Once the
earthquake rebuilding starts the money and orders will be flooding in.

If tomorrow the stock looks strong then i dont see a reason not to buy if your keen on it. Wouldnt buy without
seeing'some strength first though as if the price goes down again it looks like it might go all way to 3.60

My system on the verge of issuing a sell , would only take a bad day tomorrow

[percy]

Nononsense want to know when to buy back in ,fundamentally i cant see anything
wrong with buying tomorrow if the price is strong
If i had bought based on fundamentals then i wouldnt of sold , as fundamentally nothing has changed. Once the
earthquake rebuilding starts the money and orders will be flooding in.

If tomorrow the stock looks strong then i dont see a reason not to buy if your keen on it. Wouldnt buy without
seeing'some strength first though as if the price goes down again it looks like it might go all way to 3.60

My system on the verge of issuing a sell , would only take a bad day tomorrow




3377
$3.60 ??? Percy goes straight to jail without passing go.!!!![again] lol

[ratkin]

lol , i better go to specsavers

[nosolution]

A lot of volume today without a lot of movement. What does that mean from a technical standpoint? Some institutional money says buy while other institutional money says sell? Confusion? Difference of opinion?

[ratkin]

A lot of volume today without a lot of movement. What does that mean from a technical standpoint? Some institutional money says buy while other institutional money says sell? Confusion? Difference of opinion?

Volume of 2m seems about a normal day for FBU

[winner69]

Volume of 2m seems about a normal day for FBU

Maybe might end below normal .... yahoo says average volume last 3 months has been 3.1 million and a bit

Hey ratkin .... I hear the casino might reopen soon .... you got your car out of the casino carpark yet ... I have worried about you since you mentioned that

[ratkin]

maybe todays budget will cause a small rally in the infrastructure stocks?


The impact and response to the earthquake is set to be a centrepiece of the Budget, with billions of dollars of insurance payouts flowing in to the country and billions more borrowed to fund repairs.
About $3b will be allocated to local government infrastructure, roads, insurance excesses on schools and hospitals and to temporary housing.
There will also be money for demolition costs in the CBD, ACC costs, business support packages, and remediation of land affect-ed by the September earthquake.
A further $2.5b will be set aside for future spending, mostly on land

[nosolution]

Yeah, I'm still trying to decide whether it's time to buy back in or if she's going down a bit more. Will see.

[ratkin]

Price seems to have stopped falling having found some support in the 8.95-9.00 region.
My system back on green bars , hopefully means the weakness is over
3382

[Phaedrus]

FBU provides us with a nice illustration of the use of technical systems of different sensitivity to suit anyones preferred level of trading activity. To enable easy comparisons, the chart below covers the same period as Ratkin's chart.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU520.gif

Systems can be ranked according to their relative sensitivity, from the most sensitive to the least sensitive, as follows :-

(1) Day trading. (not shown)
(2) Short-term trend trading. (not shown)
(3) Medium-term trend trading. (Trendline break buy/sell signals marked by arrows)
(4) Ratkin's system. (As per the red/green ribbon at the bottom of his chart)
(5) Market Strength Indicator. (You want to be In when the plot is green, and Out when it is red.)
(4) Long-term trend trading. (200 day Moving average, long-term trendline).
(6) Buy and Hold.

The more sensitive the system, the more actively it trades. Entries and exits are earlier but there is a higher proportion of losing trades and more whipsaws. Less sensitive systems are not so active and entries and exits are slower to trigger. The idea is to select a system appropriate to your preferred level of trading activity.

[minimoke]

Am I paranoid to think there is something smelly about FBU winning the $10m+ Hotel Grand Chancellor demolition at a higher price and longer deconstruction period than other tenders?

[ratkin]

They should just blow the feckin thing up , chances are the buildings surrounding it are stuffed anyway.
This city rebuild going to take much longer than people think.
For example i have the inside word that the Crowne Plaza not even thinking of reopening till at least 2013.
Japan going be up and running long before chch cbd

[Billy Boy]

They should just blow the feckin thing up , chances are the buildings surrounding it are stuffed anyway.
This city rebuild going to take much longer than people think.
I agree...
Too many would be's if they could be's sticking their uninformed snooters in.
Gerry Brownly.... You are their to sort them/it out. Make the hard decisions now.

Dis... have been hit hard property wise. I now want to get up and running B4 the
lawers get it all !!,,, with no resalts...
bb

[nosolution]

What's going on with this one guys? Nothing but good news for FBU and we are back down to 3% above pre the seacond CHCH earthquake. Time to top up or does the market know something I don't?

[minimoke]

FBU has a huge amount of ChCh earthquake revenue priced in. FBU will see the revenue but it won't all come next year. It'll be spread over 3-5. And Oz building is slowing big time. Be careful. discl: not holding.
The revenue might be built in but punters better be ware of the expenditure. While they do well clipping the ticket at Placemakers my sense is that they will regret taking on the housing rebuild management. High volume crappy margin, high customer expectation, grouchy insured. If it smells like a dog its a ........

[mr.needs]

FBU provides us with a nice illustration of the use of technical systems of different sensitivity to suit anyones preferred level of trading activity. To enable easy comparisons, the chart below covers the same period as Ratkin's chart.

Chart must be well and truely into the red zone now?

[Phaedrus]

Nearly. The plot is yellow - "negative and falling".

The MSI is a fairly conservative long-term indicator, roughly equivalent to the 200 day moving average and/or the longterm trendline shown here. If FBU continues on down, these 3 indicators will probably be triggered at about the same time.

See how both the OBV and the shareprice are in accelerating downtrends. Note how medium-term trendlines have given excellent and timely buy/sell signals with early OBV confirmation. Conservatism has its price.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU69-1.gif

[nosolution]

Could find support at the long term trend line?

[nosolution]

I'd be supprised if it did. While I'm guessing that many will be pretty dissapointed with the next result, there's just too much business lined up in the next few years for it to get that far. I'm expecting support to form leading up to the next result which may temporarily collapse before investor get back into forward-looking mode.

Sorry, I don't quite understand what you're saying. You're thinking, it's not going to make it down to the 8.40 or so range? It's almost there already. I'm still holding but wondering whether to get out or top up. I think it depends on what it does over the next little while. Will definitely exit if it breaks the LTTL.

[winner69]

If you're still holding you should be topping up once this trend reverses. If you thinking of bailing while still holding then you're simply reacting to price rather than fundementals as all the price based bailing indicators fired a while ago. :)

This from somethign Phaedrus posted on another thread (not his words but some body else's) is quite interesting


The author also has some interesting views on Fundamental Analysis :-
"You may have noticed that there is nothing in this chapter regarding how to perform fundamental analysis of industries, companies within that industry, financial analysis of earnings statements and balance sheets, etc. Perhaps you expected any book on stock picking to include these topics, but Five Minute Investing does not. The simple reason for this is that if the market is saying that a certain company's earnings are expected to grow (evidenced by an accelerating upward stock trend), why should we find reason to dispute what the market is saying? As long as we have a loss-cutting mechanism in place, we do not need to use fundamental analysis to validate what the market already has told us about the future earnings of the company. The opinion of the aggregate marketplace has far more credibility in my eyes than does the opinion of any fundamental analyst, no matter how good. So I will always go with the opinion of the market, as opposed to anyone else's opinion, including my own. To me, anyone who tells me that a stock which is moving up (or down!) shouldn't be moving up (down), has by definition missed something in his analysis.To make my point on the futility of fundamental analysis for the average investor, think of how you would determine if the grass in your lawn was growing quickly. Wouldn't you just measure the grass today, wait a few days, then measure it again and subtract? If you did this and discovered that the grass was growing quickly, would you then go out and conduct a survey of the temperature, rainfall and hours of sunlight per day to validate that the conditions for growing grass are indeed good? Of course not! You would rightly conclude that the conditions for grass growth are good based soley on the fact that the grass is growing. Even if you did cook up some formula to predict grass growth based on environmental conditions, would you trust your formula more than your direct measurement of the grass's actual growth? If your formula said that grass shouldn't be growing and yet it was growing, would you stop mowing your lawn? Again, to do so would be preposterous. You would have to conclude that something is wrong with your formula.Unfortunately, common sense of this sort does not get applied in the stock market by many people. Even though we can directly measure through a stock's price trend what the company's growth prospects must be, there is always someone there to try to make us lose sight of that simple fact by pointing to his "analysis." You can be sure that for every fantasticly bullish trend, there is some analyst somewhere saying why it shouldn't be happening all along the way.The best you can do is to not listen to such opinions, and, again, go back to the market as your one source of advice."

[Hoop]

Sorry, I don't quite understand what you're saying. You're thinking, it's not going to make it down to the 8.40 or so range? It's almost there already. I'm still holding but wondering whether to get out or top up. I think it depends on what it does over the next little while. Will definitely exit if it breaks the LTTL.

Nosoution this chart may help.

Disc: not holding any.......I've been in and out many times since 2009 not hard to see where on this chart . FBU is TA user friendly.. if the grass grows cut it...

http://www.imageurlhost.com/images/1qf4suvzgdv8t25d0lk.png

[Hoop]

So Hoop. your TA target is the current share price plus the difference between the next two support levels?

Biscuit ...partially right. All formations have mathematical formulae to approximate how the price goes after it breaks out of its pattern. In FBU case its pattern that it broke out of is correctly called a Top Rectangle Pattern but we commoners :) call it a trading range...it probably got this name because it is very easy to buy and sell within this pattern with confidence.

When the price breaks out of its rectangle pattern an investor who hasn't sold (obviously) now wants to know his chances on how long to hold this share... so first of all the investor works out the minimum target price in FBU case it is 8.55 + (8.55-7.55) = 9.55. Statistically a rectangle pattern breakout reaches its minimum target price 80% of the time so the investor is confident and his/her expectation is high up to this point.

The next thing an investor looks at once this point (9.55) is reached is the possible pullback phenomena. For a busted upward rectangle in a bull market the chances of a pullback to test the top of the old rectangle formation is 64%..so the trader now watches for weakness and sells out so as not to be hurt with the pullback.....we are currently seeing the end? of this pullback with FBU.

OK where to from here at the possible end of this pullback period

This is where you get your statistics table for Top Rectangle upward breakouts within a bull market (now you will understand why I post so much raving on whether an index is in a cyclic bull or bear..eh) Access to the book Encyclopedia of Chart patterns by Thomas N Bulkowski is a share investor/trader must have. For those people without the book can go to Bulkowski's website called The Pattern Site (http://thepatternsite.com/recttops.html)If you click this I have already directed you to the Rectangle formation webpage from there you can get the statistics table.

Note that FBU has only risen about 12% from its breakout. From this statistics table you see that only 20% of the breakouts fail around that level so FBU has an 80% chance that it will bounce back up off its 8.55 support line.
The median rise (50% chance) is 32% up from breakout 8.55 + (8.55 x 0.32) = $11.28
The average rise with pullback included(slightly less than 50% chance) is 8.55 + (8.55 x 0.37) = $11.71

However at these levels (50%) it is a flip of a coin. My personal criteria is for odds better than 70% so my expectations would fade above 8.55 + (8.55 x 0.17) = $10.00.

When I say 70% criteria it means it has reached my personal expectation and I will spend extra time carefully watching for signs of weakness if it goes above this........Remember though these are statistics and failure is always a possibility so I use the standard trend line, R&S lines, looking at possible new formation being created, TA indicators etc.etc and if sell signals appear at any stage I sell or should sell (I occasionally have disciplinary problems :()

I mentioned in my last post that FBU is currently user friendly, it has been a textbook example so far. Reading the textbook it says if the regular fall back process is arrested inside the rectangle it is a sign that an upward breakout is imminent ...Hey presto!!!!.. this happened as per textbook script at the beginning of February 2011 (see my chart)

Nosolution and Biscuit Hope this Sunday rave helps

[nosolution]

Great Post. Thanks Hoop!

[nosolution]

Hoop,

How would you decide that the $8.50 support had been properly respected and that SP was on it's way back up? I.e., how would you time your buy back in?

[Scotty020]

Hi Guys,

Any thoughts on FBU at the moment? I'm suprised the share price has come down this far and am wondering if anyone is considering buying at this level?

[percy]

Hi Guys,

Any thoughts on FBU at the moment? I'm suprised the share price has come down this far and am wondering if anyone is considering buying at this level?

I note FBU is in a down trend at present.I would hold off purchasing upturn the trend changes.I would expect one of our great chartists will give us the word when the buy signals fire.I do hold.

[Phaedrus]

For those of you such as Scotty, Biscuit and Nosolution that may be looking to time an entry into FBU, here are some suggestions as to suitable Buy signals.
(1) A break of the current trendline.
(2) A break of the OBV trendline.
(3) The Stochastic oscillator rising above its OverSold threshold.
(4) An end of the current downtrend - ie a new Uptrend, defined as a higher High after a higher Low.

None of these indicators come with a guarantee - all we can do to evaluate their potential worth is to observe how well they have performed in the past. It is unwise to act on the basis of a "buy" signal from any single indicator - what you are looking for is some level of consensus.

You can see that FBU is in a nice steep downtrend and is now technically OverSold. Don't forget though that any price rise sufficient to trigger buy signals is not going far unless it is supported by volume. Translation :- The OBV trend is really important. As a leading indicator it is often the first to fire, but of course to act on that alone is ill-advised. Wait till you see the whites of their eyes before firing.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU77.gif

[Arbitrage]

However would it worth starting to accumulate FBU on the basis that the bottom of the fall is approaching?

Looking at the amount of future work they have stiitched up in Christchurch the fundamentals suggest so.

[Arbitrage]

Do you think it will get to $7.80? That would be interesting.

[Phaedrus]

http://i602.photobucket.com/albums/tt102/PhaedrusPB/FBU77.gif


Would it be worth starting to accumulate FBU on the basis that the bottom of the fall is approaching? ....... the fundamentals suggest so. Arb, whatever the fundamentals, no-one knows how far this downtrend will run. Why buy a falling stock? Why not wait? There is no hurry - you fundamentalists are supposed to be patient types - right?

I will start a separate thread featuring a particularly poignant example of the folly of buying a downtrending stock.

[Arbitrage]

okay. I will revisit the share on 18 August at 3pm when the slope of your graph suggests they will hit Belgs target of $7.80. Interesting that the April valuation for FBU on ASB securities is $9.10

[Hoop]

My update from post #861 10th June 2011.

Quote:
Note that FBU has only risen about 12% from its breakout. From this statistics table you see that only 20% of the breakouts fail around that level so FBU has an 80% chance that it will bounce back up off its 8.55 support line.
The median rise (50% chance) is 32% up from breakout 8.55 + (8.55 x 0.32) = $11.28
The average rise with pullback included(slightly less than 50% chance) is 8.55 + (8.55 x 0.37) = $11.71

My first Dud investment with FBU since March 2009 and it was against the 80% odds.

My investment strategy was sound in that I sold out at the 9.20 to guard the capital gain against the pullback (throwback?)

I watched FBU throwback (I think pull back is the other way?)after my#861 post and entered at 8.67 while TA was still negative but hinted an upturn on 22 June when it respected the 8.50 (8.55) support area. I figured my Stop / loss at below the primary trendline back within the old trading range area ..it fell below the primary trendline of 8.39 yesterday. to close at 8.35..I watched it rise today to 8.40 but it failed so I bailed out at 8.34 for a small -3.9% loss.

FBU is now back in its trading range scenario 7.50 - 8.50 so maybe as Belg says its back to trading the highs and lows again in this range. I now wait for TA buy signs

http://www.imageurlhost.com/images/24fqa43qe3l0youb2mbm.png

[winner69]

WTF .... whatsup

The economy is on fire but FBU shareprice is tanking

The market must be stupid - they just don't get it

[POSSUM THE CAT]

Winner69 Maybe the economy is on fire that does not mean that FBU must be. IMO it has been poorly managed for years as it buy out the competition so it is like most monopolies highly inefficient. I would have to think very hard about buying FBU shares even at $7.00 per share

[Hoop]

Downtrend accelerated since then (7/7) ... Close today at $7.96 and below most (all?) brokers valuations. I suspect that many will have concluded that i-rates will be going up soon and killing the non-existent NZ building boom (but watch Oz which is likely to lower i-rates sooner rather than later to wake up the non-mining sectors).

Trackers. Any chance of a graph? What's OBV up too? Thanks.

Belg...we are back in that 19 month 7.50 - 8.50 trading range again where we made money...I feel a deja vu coming on...nice:):cool:

[dumbass]

looking at big picture chart , ascending wedge formation which is quite a reliable bearish pattern.
there is often a good short off the retest of the lower border before heading lower.
trendline may be a bearish target

http://i183.photobucket.com/albums/x107/joicey9999/fbu.jpg

[Hoop]

Hmmm... Rising wedges quote Bulkowski are lousy performers and hence statistically unreliable.. but was this actually a rising (ascending) wedge before it ended its formation with the breakout (downwards)??

Bulkowski quote...... Rising wedges rarely last more than three months (just 21 patterns, or
3%, are longer than 3 months).

He did remark in his book that he was told of one that was a year old.

Oh well.. whatever it was it broke out downwards as it probably should have...eh . Hmmm an interesting find Dumbass...it got me googling pattern sites though the internet now.

[dumbass]

Hi hoop , they are not great patterns in predicting a break out but when an ascending wedge breaks to the downside then it becomes a very reliable pattern.
They work well on the currency markets especially when the lower trendline is tested for a change in polarity , providing a clearly defined risk with a stop just above the trendline.

Here some info on it
Trading Ascending Wedge Chart Patterns

When the price pierces the lower rising trend we have a break down. Higher volume is not necessary. In fact, if the move down is is accompanied by the lack of buyer volume, the price can fall with below average volume based just on what the sellers are creating.

The most success using the rising wedge pattern comes when you wait for the break down through the lower rising trend. According to Bulkowski's research the break down only experiences a 6 percent failure rate, which is excellent.

Investors should look to buy on the initial break. However, you can also wait for the re-test as another re-entry point. Unfortunately, the re-test does not always take place, so you cannot count on it.

The measure rule for rising wedges is easy to determine. It is the lowest point in the formation. For the chart above the measure rule gives you a target on the NASDAQ of the 1,725 area. Not all ascending wedges achieve this target, so it is important to use trailing stops to protect your gains.

It is good trading discipline to be ready to take profits quickly when you are short. In addition, many investors sell half of their position after achieving half of the move to capture profit, which frees the money to use on other opportunities. The remaining half is covered by a trailing stop that is below the breakout, allowing them to capture any further move down.

[Hoop]

thxs for that dumbass

[PhaedrusFollower]

For once I got it right and I sold out of FBU at $9.10 after buying at $7.70. Like Belgo and Hoopio am sitting waiting to re-enter FBU - however, as a good follower, I will be waiting for the appropriate signals that the downtrend has finished and I hope to see everyone who decides to buy at some point (anyone buying yet?) to provide their reasons, for good clean debate (and learning for the less learned among us - i.e myself). . . earning guidance and 17th August results will be interesting moments for the SP.

[Arbitrage]

I didn't believe it but Belgs target of $7.80 is looking achievable.

[Arbitrage]

I will stick my neck out and say it is a slight correction but the downward trend will continue. Unless there is some good news out there I haven't picked up on. Hopefully I am wrong.

[Arbitrage]

The price is still heading towards Belgs target of $7.80. Is it time to buy yet?

[macduffy]

Inflation at "3-4%" doesn't look particularly scary to anyone who lived through the inflationary period of the 70's and 80's but I agree that the trend is starting to be a bit of a worry, even when discounting for "one-off" effects. Interesting how the wheel turns. We don't hear much about the limits to growth these days, instead the concern is that "growth" isn't sufficient to maintain standards of living/employment. Higher inflation and interest rates seem to be the price we have to pay to achieve that.

[Hoop]

Theres been no TA indicator buy signals to speak of since the 9.50 peak. TA would have kept you out Belg.

My charts show the same keep out signs......

Yeah weak support around 8.00 Belg more exact 7.92 so this is the next point to watch for going down ...8.10 going up.

FBU is back into its old trading range so 7.7 is a good point to put a watch on and 7.50 looks to be bottom so finger on the trigger if this point is ever reached again.

Phaedrus MSI for the NZX50 is probably red so another reason not to buy now.

http://www.imageurlhost.com/images/y7e34v6ja338okecgul.png

[CJ]

I remain hugely sceptical ...I agree. I dont see the OCR going up as quick as Bank economists say it will.

[Arbitrage]

Can someone show me the inflationary figures? Are the nbanks just ramping things up so some people will fix at higher rates to improve the banks margins?
Back to FBU, the trend is still heading south. Is $7.70 the new $7.80?

[Hoop]

falling knives and all that but FBU is looking gooooood @ 7.45

Bugger the falling knives belg :cool: got most but not all that I wanted this morning Av 747 ...the 7.50 area is my side of town so I'm back in.

[Blendy]

falling knives and all that but FBU is looking gooooood @ 7.45
couldn't resist either - surely this price is a bit overdone, and I'm hoping it will be back to normalish soon :)

[dumbass]

I might be missing something but technically fbu doesn't look too attractive.
Its in a down trend that is steepening, its broken down from the ascending wedge pattern , its closed below support at 7.60 so far.
http://i183.photobucket.com/albums/x107/joicey9999/fbu-1.jpg

[Hoop]

Hi Dumbass
You haven't missed anything..FBU is technically crap atm.....so why have I entered...huh?

Ive entered because I'm still a closet fundie deep down.. 30 years of habits die hard so I'm prepared to take a 6% hit . The risk v reward looks OK as long as that 7.00 key support holds and that's a risk in itself during lemming season.

A super quick down usually precedes a super quick up so opted for risk v reward strategy as opposed to wait for TA buy signals I use free TA software so I'm disadvantaged as I get delayed data, the cost of being miserable and using free stuff..eh

...probably the wrong strategy but I've been wrong before...often

[Casa del Energia]

Just $9 mill through thus far - wonder how many are margin calls?

I'm reminded of the old saying; "if you can keep your head when all others are losing theirs, then you clearly don't understand the problem"; and I wonder whether this applies to me as I clearly don't understand what the problem is.

I've kept my head - but I've lost an arm and a leg. I don't see any problem either. And I'm looking at the gross div and start doodling on the calculator - so let's look forward to $7 a share and I might just do some price averaging to die for.

On the other hand - the Dneiper raid seemed like a good idea at the time as well.

[Hoop]

Just $9 mill through thus far - wonder how many are margin calls?

I'm reminded of the old saying; "if you can keep your head when all others are losing theirs, then you clearly don't understand the problem"; and I wonder whether this applies to me as I clearly don't understand what the problem is.

me neither
FBU shares only 30 % higher from the GFC of 2008- 2009 when the end of the world was nigh...
all ords 25% above the 2009 crash bottom....ditto with NZX50
Is the world as bad now as it was then?...what am I missing here??

I have an even worse situation now...I've nearly run out of cash, lost a couple of fingers and have a very smelly keyboard:(

[GR8DAY]

.......you guys gotta be nuts entering (or re-entering) the market at the moment.......what's the rush?, not like there's gonna be any spectacular over-night recovery here. Take a deep breath, let the dust settle then try and make a rational (and hopefully well timed) decision to buy or wait. FBU could easily be $6 in a few days if this nonsense continues.

[dumbass]

looking at big picture chart , ascending wedge formation which is quite a reliable bearish pattern.
there is often a good short off the retest of the lower border before heading lower.
trendline may be a bearish target

http://i183.photobucket.com/albums/x107/joicey9999/fbu.jpg

if 7.00 ish goes then not much in the way of help until the ultimate bear target of multi year ascending trendline.
but.........shenigans like this dont respect nice little chart lines its most likely going to come from a sentiment change.
fed meeting tonight and id say a 18 % drop will have got there interest, so maybe something out of that.
unfortunately this is only the third wave down need a rally and another decline , daily rsi the most oversold even from the last bear market.

[GR8DAY]

.........throw those charts away DUMBASS, this is all about sentiment and confidence......and it's all negative now and i'd say for sometime to come.

[Lizard]

Just wish Phaedrus was arround to tell me off. Geez I miss his chastisement.

Just go peek at your position in the NZX comp if you feel in need of some flagellation.

[Hoop]

Strategy for today, given US fed i-rate stance, is a short fat inverted pyrimid up to 7.30, possibly 7.40, we'll see.

Pessimist!!!!:):):):)

[peat]

3524
theres some chance of a show of support at the current price range.
If you look at my chart the two different shapes both cover a support/resistance area with the black rectangle recent and mostly being an area of support except for the D point where it was resistance, and the purple oval shows a more diffused version but still has similar levels A point being clear resistance and around B also acting as resistance but failing and become support. C was also a congestion area.So this current area 7.30 ish may act as support and if it doesnt then it will be resistance again.

[GR8DAY]

.........and that will possibly (make that probably) happen today

[peat]

so I put the theory to the test and bought some at 7.20 first thing this morning....

hourly is starting to build a triangle shape , and the software sees an inverted h+s which would target 7.90


3527will be out before then though

[peat]

out at 7.50 +30c not bad for a day trade , no overnight risk involved which is probably a good thing atm

[peat]

the software sees an inverted h+s which would target 7.90


3527



it made it !

[nosolution]

The market seems to like it :) Bel, what do you mean about negative outlook? I dont think it is any more negative than to be expected.

[percy]

Well positioned for the upturn when it comes.
Yes,well that's good to know.

[Lizard]

I thought the result was pretty dull, but with the add in of Crane Group earnings next year and (perhaps) no major abnormals, they should scoot up on NPAT. That might be enough to keep the s.p. heading in the right direction.

[macduffy]

Pretty good in the citcumstances, IMO. And it would take a brave CEO to forecast what the year ahead might bring with so much uncertainty around!

[dumbass]

fbu now displaying a much more positive technical outlook.

RSI signal line has fired a buy as it exits the oversold zone.

STOCH has broken downtrend line and exited oversold zone.

OBV may break downtrend line.

caution still warranted until downtrend line of price is broken and 30 day sma.

support sitting at 7.60 and 7.20

http://i183.photobucket.com/albums/x107/joicey9999/fbu-2.jpg

[Major von Tempsky]

However, on the basis of gross dividend yield percentage and fundamental analysis, it's not a very good buy until most of its turnover is overseas and it's about to move its primary listing to Australia?