FBU Chart.

[Wolf]

Buyers

Buy Quantity

Prices



1
2,286
$9.960


1
19,914
$9.950


2
19,946
$9.920


1
2,740
$9.600


1
427
$9.580


2
42,795
$9.540


2
24,756
$9.530


1
5,000
$9.510


2
13,152
$9.500


2
2,270
$9.450


15
133,286






Prices

Sell Quantity

Sellers



$9.360
4,629
2


$9.400
3,500
1


$9.450
5,000
1


$9.460
5,000
1


$9.500
37,478
4


$9.510
3,702
1


$9.550
723
1


$9.600
330
1


$9.610
1,090
1


$9.620
2,001
1



63,453
14










as at 16:55:40, Thursday 26 September, 2013 (NZT)

After the market close's and trades can't go through all these offers go in? Can anyone please explain this to me? Are people trying to influence the share price? Yesterday there was a large buy offer at $10.33

[Wolf]

Cheers Moosie, had a good look understand it now haha.

Bollinger bands squeezing looks ready for a break out soon. There isn't any announcements due for a while so i don't think there is going to be a postive catalyst to propell FBU up into the 14's for a while. Personally i think it's going to start a bit of down trend and i'm going to exit soon.

https://ost.asbbank.co.nz/27511025A20D244FECA6DFF7B3DEFFDF/external/largeimage/fbu/nzx?range=3m&adjust=1&chart=boll&ma1=0&ma2=0&scale=log&indicator=vol


If anyone wants a laugh i sold a large part of my FBU holding the evening before the lastest financial results came out at around $8.2
I was so eager to get on the DIL train that i forgot there was an announcement the next day :/.

[winner69]

Maybe 940 odd all it going to do for now

A few weeks that post

Maybe 940 odd is all it going to do for now

Pretty boring eh

[macduffy]

Construction in Australia at a three and a half year high.

http://news.theage.com.au/breaking-news-business/construction-at-threeandahalfyear-high-20131007-2v2xs.html

[Silverlight]

Read the QSBO (Business Opinion) report out today, while there were some positives it showed a negative turn in Canterbury investment intentions, as they fell to its lowest level since the earthquake.

If your investment thesis for FBU is based on the Canterbury rebuild, you may need to adjust your outlook. I sold most of my position in Jan, the balance of risks for the past 9 months have always been to the downside, given the amount of expectation built into the current price.

[winner69]

So it is how Aussie instos feel about FBU that matters -

Frijns' research found the issue was more pronounced for New Zealand's biggest listed companies. In 2001, 87 per cent of Fletcher Building's price discovery came from the NZX. Last year that had shrunk to just 21 per cent.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11139586

[Hoop]

Warning ....post is for educational purposes only
Cup with handle (CWH) is a pattern with OK success results .............there are better patterns to trade on with higher success rates than the CWH
It is best to ignore the price target until the pattern buy signal is triggered (+$9.80)
I personally haven't bought in yet.
The facts from the chart are from Bulkowski's patternsite website (http://thepatternsite.com/cup.html)

A post from the DIL thread

No offence , but drawing a whole lot of lines after the fact is not very impressive...my little brother could do it , who does this help ? Does it help people understand better and prepare for next time? Not really... all of this is historical? What's the point? Your just drawing lines on price action which has already happened... connecting dots on a bunch of lagging indicators.

This is more historical chart facts Huskee... but as an early but risky buy signal was triggered yesterday at close I suppose I can again be accused as posting after the fact...sorry I don't have a crystal ball that works....however this established pattern is one of the few patterns that alerts you when to buy in advance...that signal hasn't fired yet..yes there are failures more chance of one happening before that 9.80 is breached...

http://i458.photobucket.com/albums/qq306/Hoop_1/fbu17102013.gif (http://s458.photobucket.com/user/Hoop_1/media/fbu17102013.gif.html)

[MAC]

Thanks Hoop for the forward looking advice, well appreciated, FA is also to the upside.

[Hoop]

Warning ....post is for educational purposes only
Cup with handle (CWH) is a pattern with OK success results .............there are better patterns to trade on with higher success rates than the CWH
It is best to ignore the price target until the pattern buy signal is triggered (+$9.80)
I personally haven't bought in yet....


I was a bit undecided so bought a small amount with stops just below C .........I'm up 1c with $15 profit:D :p......Beware Mr Buffett I'm chasing your No1 spot;)...haaa

EDIT..no I'm not +$15..Hmmm probably my timing is out should've waited a bit longer...............meh!...............Buffet's spot is safe for now :(

[macduffy]

Macquaries have a "Neutral" rating on FBU with a DCF valuation of $6.95 and a 12 month target of $7.60. Why this doesn't warrant an "Underperform" is a bit of a puzzle for me!

http://www.macquarie.com.au/dafiles/Internet/mgl/au/apps/retail-newsletter/docs/2013-10/FBUNZ221013e.pdf?cid=&spMailingID=7222538&spUserID=Njc3NzM3NzYzOTgS1&spJobID=94333658&spReportId=OTQzMzM2NTgS1

[winner69]

Good day for FBU off the back of NZ home building consents rise 1.4% in September, led by Canterbury earthquake rebuild (http://www.nbr.co.nz/article/nz-home-building-consents-rise-14-percent-september-led-canterbury-earthquake-rebuild-bd-147)
FBU up 2.3% and pushing the magic $10 mark!!

Annual umber of residential consents still under 20,000

Industry forecasts are for 25,000 annual rate (minimum) in 2015.... so heaps more growth to come

Strong non residential numbers as well .... annual growth now in excess of 10%

Looking good in NZ .... even if a few global players enter and even if the govt thinks FBU make too much money

[winner69]

and looking good in Aussie as well

http://edit.businessspectator.com.au/news/2013/10/31/property/september-building-approvals-jump

Building approvals hit three-year high

[winner69]

We did see 10 bucks yesterday with a close at 999

Today should see a 1000 plus close

Price still driven from oz but no reason why 14 bucks can't be achieved in next year or two

I still like my ladle chart showing .....a chart pattern devised from moosies cup and handle pattern

[Hoop]

Pattern educational purposes only
DYOR

EDIT:...Not on chart is a weekly close of just over $13.00 back in mid 2007 This $13.00 line would be the Primary Resistance

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU31102013.gif (http://s458.photobucket.com/user/Hoop_1/media/FBU31102013.gif.html)

[Mista_Trix]

Allllll ..... moooost.
... and then there was red.

[Billy Boy]

Be careful people's.... This stock could be back to < $9.60 by 4.00pm this afternoon
BB:mellow:

[Wolf]

Does anyone have figures backing up a price of $14-$15 or are you just naming figures in the sky?

If i remember correctly and forgive me if i'm wrong but in late 2011 FBU announced that growth was going to decline? Which caused the decrease in price from 9.37 to 5.86. Around this time the first Christchurch earthquake hit and then the second and these have created earnings growth for FBU and will for the next 5-10 years In NZ. But after this and depending on growth in Australia we can expect growth to decrease/decline which will not get a price of $14-$15. Since we value shares looking at the future the end of the Christchurch rebuild should soon be added into the overall picture?

Forgive me if i'm wrong i haven't done heavy research into FBU since 2012 when i bought into companys such as FBU because of the earthquakes. Please don't attack me i'm just putting it out there.

Disc: Sold out between 8.2-9.8 so i'm biased

[Billy Boy]

Some one is buying multiple parcels of 54 & 55 in a row etc..... why would they do this ??
Anyone ??
Tks in advance
BB:confused:

[Silverlight]

Some one is buying multiple parcels of 54 & 55 in a row etc..... why would they do this ??
Anyone ??
Tks in advance
BB:confused:

Its just a black box executing an order. If you use DMA to trade, you can select multiple ways to execute so you don't impact the market.

I use Bloomberg tradebook for my global execution, the amount of options for trade execution is mind boggling. Never used it for NZ, but an institutional with a large order may use it so they don't impact the market.

[Hoop]

Not looking good mate. How's the short term charts looking for this breakout? I'm in long term so not too concerned, but some good news would be appreciated. Fallen back to 9.66 as I type!

Read the right hand side of my chart above (8 posts ago ..Post #1732)...these throwbacks are common (58% chance) after a breakout ...retests the new support before moving up again. That also indicates that Moosies buy in at $9.99 is at the cheapest price of this upward breakout event 42% of the time...selling out again near a support price and hoping to reenter at a lower price is against the odds again

[Hoop]

yup, agree, I just sold because I'm inpatient and protecting my capital right now. I'll be back...

http://upload.wikimedia.org/wikipedia/commons/thumb/5/5b/Arnold_Schwarzenegger_-_I%27ll_be_back.jpg/735px-Arnold_Schwarzenegger_-_I%27ll_be_back.jpg

[winner69]

Prob Knauf have already spoken to the government about soe decent regional development grants to help them out

Nz govt out to get FBU methinks



.Knauf takes on Fletcher in plasterboard market as NZ mulls high costs of building

http://www.sharechat.co.nz/article/14d20de0/knauf-takes-on-fletcher-in-plasterboard-market-as-nz-mulls-high-costs-of-building.html

[winner69]

A few weeks that post

Maybe 940 odd is all it going to do for now

Pretty boring eh

Another month and hey FBU still around 940

Maybe 940 is its lot

Don't think that 14 bucks is going to happen . Aussies don't seem to fancy FBU and that seems to be key driver of share price

[winner69]

Residential building consents tumble according to the headlines ......but they were 22% higher than October last year ....so go figure

Whatever FBU should be as busy as ever.

However too many headwinds I feel for the shareprice to boom from here. I admit the 14 bucks is now a pie in the sky sort of figure.

Headwinds -

1 - Price being driven from Australia and so linked to likes of BLD etc ... And the strong NZD has made it tempting for some funds to sell out ..will they return?

2 - Government seems here bent on screwing the likes of FBU .....lower margins

3 - Monopolistic positions in plasterboard are being threatened by global players .....setting up here as well as imports

4 - I believe that the competitors are doing better in the areas where they have competition

5 - Pretty richly valued at the moment with good growth expectations built in .... but if the markets start to weaken these sort of stocks suffer more than most

6 - to me importantly even though all the headlines all make a good story for FBU future my gut feel is that things just aren't what they are made out to be .....which means if stocks find it hard to keep going up its time to get out. Been too long in the mid 900s for me.

It's been a good ride over the last few years ......maybe it will head towards 14 bucks again .....if that happens the charts will say when it is to time to get back on board.

[winner69]

Well well ...... Have FBU under 9 bucks

Getting to the unloved state again, ESP out of Aussie

Is a bit of a puzzle ......but can't fight market sentiment eh

[Harvey Specter]

FBU appears to be in decline after hitting a high of ~$10.

Any reason for this. I sold out after the last profit announcement (thinking it wasn't that great) and had beaten myself up about the decision ever since. It has now dropped below what I sold it for so am now happy (though I should have held on a bit longer).

Will be interesting to see where/when it turns as it is a very cyclical stock with nice long up and down trends.

[macduffy]

A business headline in The Australian says FBU would like to explore merger possibilities with its Australian rivals and is interested in possible acquisitions in the USA. Is anyone able to access the article?

[Servaas]

A business headline in The Australian says FBU would like to explore merger possibilities with its Australian rivals and is interested in possible acquisitions in the USA. Is anyone able to access the article?

Here you go:

http://www.theaustralian.com.au/business/companies/fletcher-gets-an-urge-to-merge-locally/story-fn91v9q3-1226788492014#

Increasingly, whenever Adamson is quoted we hear that Formica is a great success story - by implication, as a result of his efforts. But is this correct? It would be good to get the facts. If anyone has the energy to analyze the last few years' results presentations, please share your findings.

[macduffy]

Here you go:

http://www.theaustralian.com.au/business/companies/fletcher-gets-an-urge-to-merge-locally/story-fn91v9q3-1226788492014#

Increasingly, whenever Adamson is quoted we hear that Formica is a great success story - by implication, as a result of his efforts. But is this correct? It would be good to get the facts. If anyone has the energy to analyze the last few years' results presentations, please share your findings.

Thanks, Servaas.

Yes, it reads more like self-promotion for Mark Adamson than anything to do with FBU necessarily! I see that in a later article - accessed via Google - he modestly claims " I have an almost autistic inability to bullsh-t". Sounds a bit too good to be true - but then most of what he says hinges around why he and his senior team should be paid more!

[winner69]

Here you go:

http://www.theaustralian.com.au/business/companies/fletcher-gets-an-urge-to-merge-locally/story-fn91v9q3-1226788492014#

Increasingly, whenever Adamson is quoted we hear that Formica is a great success story - by implication, as a result of his efforts. But is this correct? It would be good to get the facts. If anyone has the energy to analyze the last few years' results presentations, please share your findings.

Good to hear from you again servass.

You be pretty excited how Bunnings continue to kick PlaceMakers ass eh. That Jacqui doing a great job at Bunnings

That question re Formica. I think you already know the answer but historical sales and EBIT numbers below.

Seeing they paid just under a billion for Formica and have spend millions in restructuring etc (abnormals and not in the numbers below) one would have to say it has been a dog of an investment for FBU.

Might be signs of hope for Formica in North America but one must say that Adamson's old stamping ground Europe remains a disaster

And the Laminex ANZ seems to under s pressure a bit - both the top line and margin wise

[winner69]

Thanks, Servaas.

Yes, it reads more like self-promotion for Mark Adamson than anything to do with FBU necessarily! I see that in a later article - accessed via Google - he modestly claims " I have an almost autistic inability to bullsh-t". Sounds a bit too good to be true - but then most of what he says hinges around why he and his senior team should be paid more!

Good article macduffy. Hope people get to read if they lucky to get through the paywall

http://www.theaustralian.com.au/business/companies/axeman-adamson-has-no-regrets/story-fn91v9q3-1226788492286#

[Servaas]

[QUOTE=winner69;451666]Good to hear from you again servass.

You be pretty excited how Bunnings continue to kick PlaceMakers ass eh. That Jacqui doing a great job at Bunnings


Thanks for the analysis, Winner.
The Formica situation is just as I thought. Mark Adamson is clearly proud of his PE background - and I suspect that an ability to "spin" is a key success factor in any PE career.

Re Bunnings: I'm disappointed rather than excited. I hold a few FBU shares!

Servaas

[macduffy]

Good article macduffy. Hope people get to read if they lucky to get through the paywall

http://www.theaustralian.com.au/business/companies/axeman-adamson-has-no-regrets/story-fn91v9q3-1226788492286#

I read it via the Google link. Seems to circumvent the paywall - but don't tell Rupert!

[Timid]

http://www.stuff.co.nz/business/world/9582918/Broker-Aus-shares-to-soar

Fletcher building gets a mention near the bottom of the article, as one of the picks for next year from Stockbroker Morgans.

[winner69]

Chat about Peter Lynch and The Intelligent Investor on numerous threads lately

Had a quick skim through it the other night and recalled how Lynch did use charts. His must have chart was plotting the actual shareprice of a stock against the price at a certain PE. If it was below the PE line the share was ‘undervalued’ and if it was higher than the PE line than it was ‘overvalued’

Had the numbers for FBU (a stock I have a morbit fascination with) so quickly threw together the chart below

Used a PE of 13 because that seems to be the most representative of FBU over time. The PE at 13 line is a mixture of trailing and forward earnings in that I have taken the June reported number (released in August) and used that for the full calendar year (sort of meaning the Jan – August period is forward looking and the Sept to December period is backward looking.

Quite interesting eh. Even with the big increases in EPS forecast by guru analysts 10 bucks looks like the highest it will go over the next few years. Even 10 bucks is 18 times F14 forecast earnings and 15 times F15 forecast earnings.

The chart did remind how badly FBU have performed over the last few years. The line at a PE of 13 represents earnings performance – not that flash is it. Interesting FBU is a great case study of the impact of dilution with several capital raisings over this period. The actual earnings in $ trend is down but not as much as earnings on a EPS basis. FBU have more than 50% more shares now than back in 2005.- some dilution eh

So is FBU more than fairly valued at the moment?

[winner69]

I think Mr Gaynor doesn't have much time for Mark Adamson

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11188305

The EPS line on that chart fron a few days says it all about FBU - the more positive upticks are forecasts that Adamson has to deliver on and even then they not really that stretched

I think Adamson will love Gaynor's little rave .....he will read it as at least every one knows I in charge

It also appears that FBU is not really flavour of the month with Aussie instos. Even talk that FBU and Boral should merge (in other words one takes the other over). To me that would not be good for long term investors though creating short term trading opportunities

[Harvey Specter]

I think Mr Gaynor doesn't have much time for Mark Adamson

I'd say it was more scathing on the directors, especially the chair.

[winner69]

Lunch time news re latest building consents data - The construction sector ended 2013 on a high note, with residential building consents much stronger than expected in December. The Canterbury rebuild continues to dominate the totals, but the re-emergence of the Auckland apartment market is a notable recent trend.

Probably wont do much for the shareprice

Number of consents for December 2013 up 47% on December 2012

[winner69]

FBU led (or followed) solid rise for most stocks in building sector

Getting back to the 10 bucks it got to in October.

Must be a good result coming up next week .....or a positive outlook for the future

Plenty of work on

[Billy Boy]

FBU led (or followed) solid rise for most stocks in building sector

Getting back to the 10 bucks it got to in October.

Must be a good result coming up next week .....or a positive outlook for the future

Plenty of work on
Sold/selling their steel mill $140m. good thing IMO.
Au/NZ $ exchange rate will not show in this upcoming
Halfyr result. But it will show in the Fl-yr result.
Other than the exchange rate and ozz dragging the anchor,
A positive outlook is on the cards.
FBU could reach $10.00 again
BB :)

[winner69]

a fews out from the half year

Fletcher stock upgraded by First NZ Capital on NZ, Australia building, cost cutting

http://www.sharechat.co.nz/article/2e13d333/fletcher-stock-upgraded-by-first-nz-capital-on-nz-australia-building-cost-cutting.html

The brokerage lifted its price target to $10.25 from $9 and raised its rating to 'neutral' from 'underperform'. Auckland-based Fletcher is scheduled to release its first-half results on Thursday and First NZ Capital is forecasting a 16 percent increase in earnings before interest and tax to $304 million.

"Our expectation is for a more positive trading outlook commentary since its AGM guidance four months ago," analysts at the brokerage wrote in a report.

[winner69]

Ouch, market no likey HY results...

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=3553000

No surprises to upside a problem, result mainly in line with expectations

Full year guidance unchanged so not really going to be a boomer of a year

Formica still not making much money

Referring back to some previous comments on thread no doubt Adamson will be thinking this a great result and haven't I done well

[Billy Boy]

$10 dollars could be easy in site with china coming on stream as well...

Be careful with china... they have been buying up iron ore and stock piling.
ozzy free trade deals have been put back in time
BB

[artemis]

Headline in Herald today: Fletcher earnings to soar: analysts

Good article, not all super positive though.

"A house construction rebound here and in Australia, the earthquake rebuild and cost-cutting will boost operating earnings from Fletcher Building's interim result by around 25 per cent in the second half of the financial year, say two analysts. Sydney-based Deutsche Bank Markets Research's Emily Behncke and John Hynd said after last month's half-year result the revenue surge would come from a combination of these factors."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11212597

[winner69]

Build numbers out today to show how CHCH and AKL are tracking in the building sector.

Compared to last year they will be good (maybe very good) but then they report seasonally adjusted numbers and they probably will be down

Like Feb numbers - headline was new residential down 2% (seasonally adjusted) but they were 15% higher than the year prior

So takes your pick

[winner69]

They fantastic numbers for March Moose

Residential up 36% on last year / nonresidential up 16%

And up on trend series and seasonally adjusted as well ..... thats good

FBU should be busy .... making plenty of money to line Mark and his mates pockets

[winner69]

Anyone looking for a bounce play? Lower bollinger band broken @ $9.42...

there was a confirmation of guidance in the presentation put up this morning .... so nothing exciting to get the punters going

subtly included a few downsides for 2015 in that presentation

[Hoop]

Anyone looking for a bounce play? Lower bollinger band broken @ $9.42...

I have a long memory but a shorter time frame memory will suffice this time ....therefore I'm applying DANGER play strategy.....staying away unless this time is proved to be different from last time..

Have a closer look Moosie...The BB squeeze changed the trend to upwards then sudden reversed..typical bull trap!!...Investors wanting out when the $10 primary resistance survived.

FBU after a decade of TA friendliness has become a bit of a bitch these last couple of years...when the last BB bull trap happened confirmed also by the supposive bullish continuation the cup and handle pattern back in November 2013 the price went the other way and plummeted within 7 weeks from 990 back to 830.........bull traps have an all too common behaviour of applying much pain.

Disc:..I nearly bought in too last week around 970c as many buy signals got triggered after the bullish cup and handle pattern was completed (yes another one!!! two in a row!!)...I was a bit weary this time..luckily I waited for the $10 primary resistance to bust...It didn't ..whew I was saved!!!

What the chance of lightning striking twice in the same place...huh? .....Rare I know.. but there's no harm by staying indoors until this threat is over

[winner69]

Cheers Hoop! Haha yeah good old C&H failure AGAIN is quite unusual. Stasis/range trading from here me thinks. If $10 is ever solidly broken then it will definitely be on the hit list for moi.

Btw I was only referring to a quick intraday trade, definitely a long term hold from here! I agree, much more pain to come.

End of protectionism

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11255515

Some tariffs are pretty minimal but gib board might suffer

Ironic all the job creating things and if this initiative succeeds in bring down the cost of gib board maybe dozens of manufacturing jobs will go

All hot air anyway ...just a bit more competition

[Billy Boy]

Some tariffs are pretty minimal but gib board might suffer



All hot air anyway ...just a bit more competition

Gib board wont suffer that much at all. In fact nothing suffers
except Batts.
I have been through the exercise for a complete house order.
7.4% net dearer to import from ozzy.
Freight, Transport, insurance, gst, etc. Kills it all.
Even when I picked the eyes out of the order, the net cost
was greater than ordering from Pacemakers or Carters.
I believe Buntings do things a bit cheaper. We dont have a Buntings
or the likes.
BB

[MAC]

That’s no real surprise to some of us living amongst it, over 60% of home insurance claim work has been completed and investors are running from the CBD. My house has recently been repaired, the subbies involved told me that they have plenty of work at present but that the forward work book is starting to pull in a little for the first time in a couple of years.

I suspect too that most in Christchurch don’t think much of the government’s plan to pay Auckland dole bludgers $3,000 each to relocate to Christchurch for the rebuild, most in Christchurch would probably rather see that money spent on a big fence and passport control to keep them out.

I don’t mind seeing a bit of local wage inflation actually, it’s been the working suburbs in Christchurch that have been hit the hardest, there's lot's of desperate stories there, and if they each prosper from the rebuilding of their own lives, so be it.

[winner69]

Oh dear...

http://www.stuff.co.nz/national/10052676/Tools-down-builders-told

Knock a few million from FBU profits next year ......but maybe hose who are getting the cash migh go to Placemakers to buy the stuff needed ......an their exorbitant margins will mitigate any loss

[winner69]

That’s no real surprise to some of us living amongst it, over 60% of home insurance claim work has been completed and investors are running from the CBD. My house has recently been repaired, the subbies involved told me that they have plenty of work at present but that the forward work book is starting to pull in a little for the first time in a couple of years.

I suspect too that most in Christchurch don’t think much of the government’s plan to pay Auckland dole bludgers $3,000 each to relocate to Christchurch for the rebuild, most in Christchurch would probably rather see that money spent on a big fence and passport control to keep them out.

I don’t mind seeing a bit of local wage inflation actually, it’s been the working suburbs in Christchurch that have been hit the hardest, there's lot's of desperate stories there, and if they each prosper from the rebuilding of their own lives, so be it.

Feel sorry for you people that have had to go through this

The disgraceful bit is that after 2-3 years of distress 15000 odd households might get some cash instead of it getting it fixed .....bet you they would have preferred th cash a few years ago.

Oh well, tax payers better off and that is what disaster capitalism is all about

Next up is the 10,000 odd claims over $100,000 still to be settled - the major repairs and rebuilds. Oh dear the taxpayer involved here as well.

[winner69]

Moosie, goodness gracious reading Naomi Klein. You be getting a view of the world most don't want you know. Thw world is controlled by evil people isn't it.

But Naomi is Canadian I believe so it must be true

Christchurch is playing out like it meant to isn't it Moosie.

Seeing you into reading such stuff John Perkin's Confessions of an Economic Hitman is a even more compelling story of how a few are taking over the worlds assets

[Hoop]

If one considers what has happened since the GFC 2009 bottom and with the NZX50 index rising over 100+% (2400 to 5200) you would've bet your house on FBU beating the NZX50 index but to date it hasn't...To be fair it has risen to nearly 100% ($5.00 to $9.90) but it has been a nervous roller coaster ride.

FBU is steadily rising upwards but its wavering around with large Bull market corrections it is once again technically breaking down with another correction and with every few days some more bits on the chart break....
Obviously FBU is not loved enough for the "buy the dip" investors and it seems this unloving behaviour is creating another large correction.

Also... FBU has recently failed to touch the top of its 16 month trend channel with its last rally and that's an extra worry as failure to touch and creating a bearish double top chart pattern increases FBU's odds of eventually sliding out through the bottom of its trend channel...however on the positive side these increased odds are still considered small and there are plenty of supports below today's price that can act as reversal points....however stunted rallies doesn't create confidence and exuberance to its investors...

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU16052014.gif (http://s458.photobucket.com/user/Hoop_1/media/FBU16052014.gif.html)

[peat]

One thing I have noted happened exactly the same is how the insurance companies ran away and baulked at paying out. Some tigers never change their spots...

Admittedly from an insurers perspective I must comment that I am not seeing this. The main delays in claims that I am involved in are arising from the EQC's involvement, or due to land zoning / geotech concerns
There was no sense in rebuilding until the ground stopped moving.

Just sayin....

[winner69]

FBU looking a bit sad at the moment, back below 9 bucks

The guys who reckon they aren't paid enough better get their a's into gear methinks else it will just drift along

And too think I said it might be 14 bucks by now ...

[Hoop]

Closing in on the TA target of 8.90.... a line in the sand which wakes up the technically minded folk 9.40 - [9.90 - 9.40] = 8.90
Wouldn't be surprised if it drops further though...say to 8.70...

Hmmm interesting bounce off the 888....Asian influence...eh? :);)

and I thought your $14 sounded a reasonable outcome back then too...Winner

[winner69]

$14 !!! Sorry. Overvalued even at $9

Belg, please do not mock us ......that was a while ago .....at the same time you said you would only buy for 6 bucks or something

[winner69]

No change in my position. I'll still buy for six bucks (which is about what it's worth IMNSHO :)

I not buying at 9 bucks either

Think current management too focused on their own rewards and losing sight of the big picture

Next year or sometime when it gets to 6 bucks might get back in .....but only if it trending up at that time

[Billy Boy]

I not buying at 9 bucks either


Next year or sometime when it gets to 6 bucks might get back in .....but only if it trending up at that time

Ditto to that....
Ozzy has gotta dig it's way out of their current economic hole coz
that's what's holding FBU back (Cranes) along with CHCH rebuild
flattening. (FBU's share that is).
We are 4 months out of an election, and the big Uncertainty Beast
is raising it's head. Not good for FBU.
The treat of importing cheaper materials has to be taken for what
it is, coz many of these building materials do not met NZ standards.
But of course.... perception, perception, perception.
BB

[winner69]

I read it via the Google link. Seems to circumvent the paywall - but don't tell Rupert!

The Australian

Have they cottoned on macduffy

Doesnt seem to work that way anyway

[winner69]

Updated this chart I posted a while ago.

I note consensus forecasts for F14 and F15 have been reduced a bit

What picture shows -

1 - Shareprice not really going anywhere and stuck around the $9 mark for over 18 months now
2 - Current PE is higher than long term average and financial performance not measuring up (guru analysts not even convinced about the future)
3 - Even if financial performance improved would still need a rerating (PE expansion) for any decent returns from this point in time
4 - Maybe the $6 that me and Belg talked about yesterday is a bit cheap .... maybe $8 is a bit fairer

[winner69]

Gaynor this morning in The Herald. (Pretty damning in view that FBU is one of Milfords biggest NZ holdings)

Fletcher Building is arguably the most disappointing top 20 company as it hasn't been able to hitch a ride on our rock star economy even though building and construction are major drivers of the economic upturn.

Chief executive Mark Adamson and his management team are increasingly looking like bemused surfers watching wave after perfect wave pass them by.

The domestic building sector started gaining strong momentum around 12 months ago and Fletcher's earnings for the six months ended June 30, 2014 and December 31, 2014 should benefit from this massive upturn yet there are rumours of imminent broker profit downgrades for the June 2015 year.

What is wrong with the company?

Has it made ill conceived overseas acquisitions as did its predecessor Fletcher Challenge in the 1980s?

There is a strong argument that shareholders should be advocating a break-up of Fletcher Building into two separate companies, New Zealand and overseas. This would allow investors to choose whether they wanted exposure to the domestic or overseas economy as Fletcher Building seems to be adversely affected by a weak NZ economy when Australia is doing well and by a downturn in Australia when New Zealand is picking up.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11287924

[winner69]

This time last year a day before the profit announcement the FBU shareprice was 820

Such good news and a promising outlook the day of the profit announcement it shoot up to 871. A couple of weeks later it nearly hit 1000

Today the shareprice is 895. Obviously Mark's plans haven't come to fruition. He has been rather quiet lately hasn't he.

No doubt tomorrow (I think) will be a reasonable result, a bit better than most thought, and Mark will tell us all about the growth that is happen and all about the cost savings he has forced through and everything looking honky dory

So the shareprice might go to 950 in next day or two and over 1000 by end of month. (if nothing else all the guru instos have to put all that money into something)

Looking forward to it.

Just a little of FA combined with TA

[winner69]

On the numbers in this story FBU should be $12 plus. just might happen by Xmas

These guru analysts are getting rather bullish on FBU

$366m profit tipped for Fletcher
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11310794

I like the numbers from the Australian analyst (seeing its out of Australia it must be right) and his forecasts.

His is the $366m npat guess for this year but next years guess is $400m npat and a whooping $507m in 2016. Note it is $507m and not a rounded $500m so real maths in his calculations.

Jeez $507n npat at 15 times earnings gives a market cap of $7.6 billion - shareprice over $11 ....add a bit if market excitement and $12 is on the cards in the next month or two.

Good to read that Mark tying everything down, except that of his own and his mates, is going to deliver $50m in savings this year. Well done that man, keep it up and you deserve another decent pay rise as well.

[winner69]

Only $339m so not much more than last year

Next year will be much better though

Love the way how thinking changes. A while ago they made a big deal about reporting abnormals as normals. Every year FBU has 'a normals' was the rational.

Made last year look good but bugger this year looks better if we throw in a few abnormals and report a number pre abnormals as well. That number closer to consensus analyst numbers ....good eh.

Sneaky guy that Mark

[macduffy]

Percy will be pleased to see the (over?) use of his favourite phrase in the press release. Yes, FBU is well positioned......

:sleep:

[winner69]

Gaynor hoping that Ralph Norris will sort Adamson and his mates out.

Love the bit that FBU under forecast market activity by a long way and even then can't make much more than last year and fall well short of analysts expectations

Hopeless, FBU should be creaming it. Execution of plans the key to success and Adamson ain't achieving it.

Milfords biggest nz equity investment is FBU .....hope Brian supports Norris in sorting the mess out

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11312951

[horus1]

I agree with Gaynor . A CEO full of himself with no results.

[winner69]

Last year operating profit $624m

Guidance today at ASM for this year is $650m to $690m

H1 to be flat so huge gains to be made in h2 .

Should keep the punters happy ......well done Mark

[winner69]

Yes guys you are correct = the 9% TSR this year not as good as the 51% the previous year but as he said pretty good all the same

They put this chart up

The ups and downs come to 11% pa over the 5 years .... really solid stuff

I see they don't use the old chart they used too .... bit sad since 2006/2007

[winner69]

ASM all over and dusted for another year ....Mark talked up his business ..... analysts went away and did there sums ..... and don't seem to be too impressed as was less than previous workings .... and shareprice struggled today .... in spite of Marks good stories

Even though not happy with this year guidance analysts seem to have pretty bullish forecasts for the next few years.

My favourite way of looking at things over time (guru Peter Lynch did this sort of thing)

Looks like one of those the Future is Now charts -- hard to see FBU getting much above 10 in the next few years

Suppose the biggest company on the NZX is just one of those steady as she goes job .... with punters hoping they might get 7%-8% return a year

[Servaas]

FBU seems to be heading steadily south and yet, since winner69's last post, this forum - and indeed, FBU's populous communications team - have been as silent as the grave.

"Last post"? Grave?

Is there no pundit who will offer words of guidance/insight/comfort at this time?

[Biscuit]

Is there no pundit who will offer words of guidance/insight/comfort at this time?

"When the storm is over the weather will improve" (Asterix and the Soothsayer)

[Billy Boy]

"When the storm is over the weather will improve" (Asterix and the Soothsayer)
Or get worse !!!
BB

[Biscuit]

Or get worse !!!
BB

No BB, when the storm is over, the weather will improve... the soothsayer says so.

[Beagle]

FBU seems to be heading steadily south and yet, since winner69's last post, this forum - and indeed, FBU's populous communications team - have been as silent as the grave.

"Last post"? Grave?

Is there no pundit who will offer words of guidance/insight/comfort at this time?

You've answered the question yourself. Its clear that FBU is now in a downtrend. It broke through the 100 day MA in early Sept at around $9.10 and despite a very strong period for the market in general since Oct 15 has completely missed out on the market rally. Analysts seem unimpressed maybe you should be too ? A lot of people have lost a lot of money fighting trends over the years.

[Billy Boy]

no bb, when the storm is over, the weather will improve... The soothsayer says so.
....:d...;) ....
Bb

[Servaas]

Thanks Roger. Now $8.17 and still falling. What a shambles!

[Biscuit]

Bit of a tussle between the bulls and the bears. Could the weather be about to improve?

[Billy Boy]

Bit of a tussle between the bulls and the bears. Could the weather be about to improve?
No.....
Asx and Au Economy holding FBU back...
BB

[Onion]

Could the weather be about to improve?

I thought so back in August (prompted by some bullish statements from some analysts and a temporary upswing I recall) and bought some. I bailed at a 10% loss last month. Another brief upswing this month had me cursing my decision to sell but just now I am comfortable just being a watcher.

[Winston001]

My broker (Craigs) is recommending FBU on the basis that Fletchers have a quasi-monopoly on building in NZ and a strong presence in Australia. NZ needs new houses, Christchurch is finally moving, and that money has to flow to building suppliers. Similarly Oz needs new houses.

Any thoughts?

[bunter]

My broker (Craigs) is recommending FBU on the basis that Fletchers have a quasi-monopoly on building in NZ and a strong presence in Australia. NZ needs new houses, Christchurch is finally moving, and that money has to flow to building suppliers. Similarly Oz needs new houses.
Any thoughts?

Another stock that's done badly despite good times.
Management?
My system says 4% overvalued, assuming long term growth of 6%.

Waiting for it to perform.

[BFG]

My broker (Craigs) is recommending FBU on the basis that Fletchers have a quasi-monopoly on building in NZ and a strong presence in Australia. NZ needs new houses, Christchurch is finally moving, and that money has to flow to building suppliers. Similarly Oz needs new houses.

Any thoughts?

Will FBU be able to capitalise on changes to RMA and the huge building boom to come? (Which will also end the real estate bubble imho...)

[horus1]

don't like the ceo. did an interview in Au rubbishing the chairman some t
ime ago. hold but wont buy any more.

[DJDAVE]

A good finish by FBU this week. A turning point?

[winner69]

Half year should excite the market

Decent increase in profitability if you forget about all the bad stuff.

Interestingly they have gone back on their word and now reporting 'normalised' operating earnings.

They said they always restructuring etc so those costs are really 'normal' and part of nderlying performance. Worked for them last year that trick but need to go back to old habits to make things good. How long can they con the market, but then analysts are a gullible lot.

[winner69]

The guy behind that fund manager who I can't say his name now because he in the headlines lately has always been critical of fletchers transparency aroundvtheirvreporting

He might bring it up again in his weekly column

[ratkin]

Thats me out, they couldnt even take much advantage of the Christchurch earthquake, cant see the point in holding them any longer

[Beagle]

Thats me out, they couldnt even take much advantage of the Christchurch earthquake, cant see the point in holding them any longer

Good move. Hardly a growth stock is it...in fact not by any stretch of the imagination. Why the high PE then, people seem to have forgotten the building industry is cyclical don't they !!

[Billy Boy]

i do not like the new CEO and will be out shortly, decisions like this dont make sense
Buy head office for 43 million refurbish and then sell again,
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11401639
.
Depends how the contract is worded. No doubt Fletchers will have a "roll over agreement"
eg. Right of renewal ever 3 yrs for a period. Which really means they can move on if they chose not to renew, but the landlord cannot chuck them out for the agreed period unless they are in breach of the contract.
A lot of firm's work this way for tax purposes and to avoid the 'Asset Rich , Cash Poor" situation, Size scaling etc.
Cheers BB :)

[Harvey Specter]

i do not like the new CEO and will be out shortly, decisions like this dont make sense
Buy head office for 43 million refurbish and then sell again,
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11401639


.
Depends how the contract is worded. No doubt Fletchers will have a "roll over agreement"
eg. Right of renewal ever 3 yrs for a period.20 year lease back. A standard sale and lease back arrangement to deleverage and take the asset of the balance sheet. Quite common. BD does the same thing with its stores.

[peat]

I thought they did this some time ago.... clearly I'm mistaken, maybe it was just when they voiced the idea.
Financial engineering or acqusition seems to be the only way to grow these days huh

[winner69]

Thats me out, they couldnt even take much advantage of the Christchurch earthquake, cant see the point in holding them any longer

Seems they have lost the plot .... and not made much out of Christchurch so far and even though heaps more to be done Fletchers it is still hard to see tham doing much better. Shame

Below is an updated chart of FBU using a technique that guru Peter Lynch liked to use ...... tracking the share price against a price that reflects a reasonable PE. I have used a PE of 13 which seems to represent how punters have generally viewed FBU in the past. The forecasts are slightly less than latest consensus assuming that analysts will go through a downgrade progress. But how much optimism is built into these forecasts anyway ... heaps I reckon.

Anyway still overvalued on this basis ........ and jeez I was touting $14 a year or so ago - that's how bad they have stuffed up lately. That head honcho has to go or take decent pay cut .... but then he probably thinks he is grossly underpaid anyway

Let's see what happen

[winner69]

the other to take note off is that the FBU share price is controlled by Australian instos.

And while Australia remains a drag on FBU earnings the share price won't go anywhere, no matter how good NZ may get

What you see in your own backyard is important

[Beagle]

Seems they have lost the plot .... and not made much out of Christchurch so far and even though heaps more to be done Fletchers it is still hard to see tham doing much better. Shame

Below is an updated chart of FBU using a technique that guru Peter Lynch liked to use ...... tracking the share price against a price that reflects a reasonable PE. I have used a PE of 13 which seems to represent how punters have generally viewed FBU in the past. The forecasts are slightly less than latest consensus assuming that analysts will go through a downgrade progress. But how much optimism is built into these forecasts anyway ... heaps I reckon.

Anyway still overvalued on this basis ........ and jeez I was touting $14 a year or so ago - that's how bad they have stuffed up lately. That head honcho has to go or take decent pay cut .... but then he probably thinks he is grossly underpaid anyway

Let's see what happen

I agree although in my view with it being a cyclical stock with little long term growth maybe a PE of 11-12 is more appropriate ?
I hate the normalisation process too...who's to say there isn't more extraordinary write-off's to come ?
If they can't make serious money in the middle of the Christchurch rebuild when can they ?
Over priced and seriously over-rated stock that the market seems (for reasons that are lost on me), to have completely forgotten is cyclical.
AVOID.

[winner69]

Hey Roger, Mark has one of those fitness wrist bands that you fancied.

Trimmed down a bit he has. Maybe shareholders think his excessive salary should be trimmed as we'll. but Mark thinks he is underpaid but that's another story.

He seems to have conned the Herald into coming up with weird story when most would have preferred a robustarticleabout what's happened to his company.

He a slack ass anyway ... I had down more than 4006 steps by 11.40 am and I hadnt even done that much (naughty me)

Weird

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11404236

[voltage]

I agree with above comments, if they cannot make good money now, when can they. Australia is getting worse, this is as good as it gets. Time to sell.

[Joshuatree]

It is for me thanks Stock slides as Fletcher earnings drop (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11404233)

[winner69]

At least Anne has a bit more relevant reportingvat the top of the article down before it leads into the profile on the slimmed down mark.

As FBU is biggest or 2nd biggest company on NZX share price be OK ...even the so called active managers have a decent chunk of FBU (can't afford to be too out if step can we). Biggest holding of that fund managers whose name I won't mention anymore.

[winner69]

FBU share drifts down for week or 2 and then a bit of a spurt today

Maybe it's Merrill report out with a BUY, valuation of $9.70.

WOW that's are long from today's price, so buy it is

Based on booming NZ conditions, improvement in North America and having a better run business. Mark will bepleasedwith that.

They also point out that FBU mutiplies significantly lower than the likes of Boral.

Go FBU, this could be your year

[RTM]

Really wonder about this one.
They have a pretty major calamity with substandard concrete that is going to be needed to be replaced in multiple places....and the share price goes up ! I really don't get it.
Disc. Yes...I have some.

[Beagle]

Really major calamity IMHO. Maybe they have insurance for that sort of thing ?

Disc, not holding and not looking for an entry point, just curious how they manage this concrete mess.

[Major von Tempsky]

Steve Vamos does not seem to be a popular appointment judging by the shareprice performance since his announcement.

Maybe he should - vamoose? (Vamos is Spanish for skedaddle, let's get outta here!).

[Biscuit]

Steve Vamos does not seem to be a popular appointment judging by the shareprice performance since his announcement.

Maybe he should - vamoose? (Vamos is Spanish for skedaddle, let's get outta here!).

No, "salir pitando" is spanish for "skedaddle"

[winner69]

You only eyed to look at the FBU chart (any duration up to 5 years) to see why little comment on them here.

Been through one of the most buoyant building periods in NZ for som time and FBU languishes. OK has an global presence but even NZ hasn't really performed.

Seems building related companies are the best investment in NZ. STU over time hardly set he Thames on fire and MPG been disappointing since listing.

A sector that punters in NZ not that keen on. Company performance the main reason but I think punters just stay away from an unexciting sector.

Think the best times market wise are behind them. All might struggle to grow earnings next few years.

A sector to stay away from?

Looks like it. Probably see FBU still at $8 and STU and MPG still under $3 in 1 to 2 years time.

And to once think that once I was touting 14 bucks for FBU

[macduffy]

Must say I didn't see much in the FBU result to get excited about but it seems that the market is pleased with the moves to sell underperforming assets and has the shareprice up 20c today. Jam tomorrow, I suppose, provided the rest of the company does well!

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11499580

[winner69]

Must say I didn't see much in the FBU result to get excited about but it seems that the market is pleased with the moves to sell underperforming assets and has the shareprice up 20c today. Jam tomorrow, I suppose, provided the rest of the company does well!

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11499580

I almost given up looking at FBU .....it's always gunna be a good year next year eh

Remember a couple of years ago they proudly announced that they wouldn't report on off things separately but just report them as normal (always had then and business as usual so why not report them as such). Made them look good the first year but now not so good we better report as significant one off costs and ignore them.

Wonder what next years ones will come to?

[winner69]

For interest sake updated an old chart

FBU back to a PE of 13 which is where it should be

If it is to be a gunna year might get to high 800s again by next year .... that is if its gunna to happen

(Monthly closing price / dotted line is price at 13 times earnings)

[sb9]

Its bit depressing isn't it, who would've thought few months ago that the sp might be sub 7.

Disc: do not hold.

[macduffy]

An optimistic outlook from Ralph Norris at FBU's meeting today.


http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11546644

Market appears unimpressed - heard it all before, perhaps.

;)

[tim23]

Underwhelming was thinking of swapping for mix of MPG and MVN.

[Servaas]

To judge from absence of commentary, it's remarkable how little interest there now seems to be among Sharetrader readers in this stock - NZ's second largest company.
Today's opening share price 7.01. CEO Adamson nominated as "Business Leader of the Year" for "Steel nerve enabling gutsy calls".
Future prospects?

[horus1]

It is always easy for a CEO to blame the past. This company should have been making record profits but has not picked a good CEO . Hold them but will not buy any more. The company has not moved with the times but sold off assets and not developed with technology or the markets.

[trader_jackson]

Anyone else starting to think at a FY16 estimated PE of just under 11 this stock is starting to look dirt cheap? (especially given the amount of work they now have signed up... Commercial Bay, Convention Centre to name a few) Dividend yield also expected to be 5.5% gross, 50% imputed (which isn't bad either...)

Disclosure: Previous holder

[percy]

Anyone else starting to think at a FY16 estimated PE of just under 11 this stock is starting to look dirt cheap? (especially given the amount of work they now have signed up... Commercial Bay, Convention Centre to name a few) Dividend yield also expected to be 5.5% gross, 50% imputed (which isn't bad either...)

Disclosure: Previous holder
They should have been doing well with the ChCh rebuild,however;
5 year return -14.07%,
2 year return.-23.65%
1 year return-18.41%.

[winner69]

Need to demonstrate they can consistently grow profits instead of just talking about doing so if they deserve to have a PE over 10/11

As Percy says they should have cleaned up Chch post quakes. In addition over the past few years new residential building has been booming and non-residential construction been pretty good as well. Fletchers made any more money - no. Blame Australia and the rest if world.

Way back in this thread I was touting a $14 share price -went to $9/$10 on false hopes .....and been on my watch list since ....but doubt whether I will be inspired to buy.

The rumours about acquiring Higgins are interesting - probably just something else for them to stuff up.

But one day FBU might be a market darling, you never know. It was once

[winner69]

I was at a Fletcher presentation awhile ago.

They raved on about the Art of the Possible as part of their strategic intent.

Being polite I refrained from laughing my head off.

[winner69]

latest guidance is “In terms of financial guidance, we expect operating earnings, that is earnings before interest, tax and significant items, to be in the range of $650 million to $690 million. This compares with operating earnings of $653 million earned in the prior year

Growth eh?

But then in normal Fletcher manner we will normalise last year and exclude few bad things this year and all will be honky dory

[winner69]

Updated the Peter Lynch way of looking at FBU chart I posted a while ago

The Peter Lynch way is to track the shareprice relative to what he thinks is a fair PE

My chart uses a PE of 12. Past EPS numbers are 'normalised' ones (which I hate doing) and F16 and F17 forecasts are the mean ones as per Yahoo

t-j - I can see why you might be interested in them at current price. My comment would be that if analyst forecasts are right then a major rerating (ie higher PE) is required if one is to make any above average / excessive returns from FBU in the next 2 years

[winner69]

Share price on fre today - almost ack to $7.00

Hope you don't dilly dally around t_j if you going to buy - might be $8.00 soon

[trader_jackson]

Yes interesting to see, but as you point out, a higher PE ratio is needed to justify a higher valuation, and for a higher PE earnings growth needs to be significantly better than none or a tiny pit (and it looks like it will stay subdued at least for the next year or so) Still could be a good long term play

[macduffy]

A rare win for FBU.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11581766

[winner69]

Break it up and shareholders might win.

Shames all the acquisitions and divestments and restructures and efficiency drives end up in such a sad state.

http://www.sharechat.co.nz/article/ee439ad3/full-break-up-may-be-best-option-for-under-valued-fletcher-building-given-non-nz-operations.html?utm_medium=email&utm_campaign=Full%20break-up%20may%20be%20best%20option%20for%20under-valued%20Fletcher%20Building%20given%20non%20NZ%20 operations&utm_content=Full%20break-up%20may%20be%20best%20option%20for%20under-valued%20Fletcher%20Building%20given%20non%20NZ%20 operations+CID_e1c4779794386f76a4e10f1d3d1cde60&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticleee439ad3full-break-up-may-be-best-option-for-under-valued-fletcher-building-given-non-nz-operationshtml

[macduffy]

"Fletcher profits soar 51%" says the headline, but most of that seems to be in the $76m turnaround in one-off items compared to last year.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11590843

Steady result, I'd say. No imputation on the slightly increased interim dividend.

[winner69]

"Fletcher profits soar 51%" says the headline, but most of that seems to be in the $76m turnaround in one-off items compared to last year.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11590843

Steady result, I'd say. No imputation on the slightly increased interim dividend.

The much maligned FBU up 30% since that post mid Feb (10 weeks ago)

Amazing what can happen when funds need to invest cash in the big market cap stocks - and no doubt a lot of foreign money has flowed in as well.

[macduffy]

The much maligned FBU up 30% since that post mid Feb (10 weeks ago)

Amazing what can happen when funds need to invest cash in the big market cap stocks - and no doubt a lot of foreign money has flowed in as well.

And the climb continues. Talk of the expected massive increase in Auckland house building helps, of course!

[bull....]

And the climb continues. Talk of the expected massive increase in Auckland house building helps, of course!

rising last mths because of the big building boom coming

[Joshuatree]

And the climb continues. Talk of the expected massive increase in Auckland house building helps, of course!
Not forgetting the dodgy under performing business's they have overbought overseas.Cant remember what % of sales they make.

A 10 year high (dilution? not included) from a serial under performer that has always been in most managed portfolios.

[macduffy]

FWIW, a couple of views from across the Tasman on FBU - and SKC, ZEL, TME, XRO.

https://www.livewiremarkets.com/wires/32672

[winner69]

FBU might get to 10 bucks today

[bull....]

FBU might get to 10 bucks today

looking good maybe $20? when we get the baboom mean building boom

[Hoop]

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2011082016.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2011082016.png.html)

[winner69]

EPS (normalised) up 4% on last year

Share price up 27% since a year ago

That's some re-rating by the market

[Balance]

EPS (normalised) up 4% on last year

Share price up 27% since a year ago

That's some re-rating by the market

According to NBR, analysts missed the mark big time.

Forsyth Barr (of Feltex fame) was out by $100m EBIT!

So much for 'professionals' - just a bunch of copy writers used to be given numbers and forecasts by companies.

[bull....]

fbu rocking double bottom in feb lower high in 10yr uptrend on the quarterly its been amazing could double soon must be cheap a with the building boom on the horizon

[winner69]

Bull ......there's been a building boom going on in NZ for the last 3 or 4 years - just hat nobody has noticed

Fletchers haven't made the most of it .....yet

But this time is different eh

I put most of FBU share price increase down to just old plain market sentiment - every body is happy as and they need to put their money somewhere don't they

[bull....]

Bull ......there's been a building boom going on in NZ for the last 3 or 4 years - just hat nobody has noticed

Fletchers haven't made the most of it .....yet

But this time is different eh

I put most of FBU share price increase down to just old plain market sentiment - every body is happy as and they need to put their money somewhere don't they

a winner have a look at this

http://unconditional.co.nz/blog/building-consents-data-provides-valuable-insight-into-property-market-trends/

it shows building consents havnt even reached back to early 2000 levels so I would classify that as still recovering trend rather than a boom, so why I say boom yet to come - why because immigration is far surpassing dwellings being built will lead to shortage in a lot of places soon

[winner69]

a winner have a look at this

http://unconditional.co.nz/blog/building-consents-data-provides-valuable-insight-into-property-market-trends/

it shows building consents havnt even reached back to early 2000 levels so I would classify that as still recovering trend rather than a boom, so why I say boom yet to come - why because immigration is far surpassing dwellings being built will lead to shortage in a lot of places soon

Agree bull .... good thing forecasts are to get back (or higher) than where consent numbers were in 2007/08

But notice in long term chart currently the numbers are off a much lower bottom of the cycle in 2011

Residential consents have doubled the last few years - that's a boom. Fletchers not done that well earnings wise in that time have they?

And commercial / infrastructure spend all good for FBU as well in NZ

[Hoop]

Share price trend unsustainable and will correct (but when?).....solid volume, so can't categorise this latest near perpendicular rise as similar to historic blow off tops which have saw hefty corrections of 20% + and both times ultimately lead the shareprice to touch the bottom boundary of its long term price channel

Going above trader targets and the breaking of its 7.5 year rising channel with non-spectacular reported earnings is considered a worry for me, hence the caution channel breakout arrow

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2023082016_2.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2023082016_2.png.html)

[winner69]

Remember my cup and ladle pattern of 2013 Hoops - that said $14 about now

And that $14 was backed up by fundamentals as well - the start of a building boom and Christchurch rebuild as an extra

FNZC said FBU worth more if broken up into different businesses - suppose they still think so

[winner69]

Share price trend unsustainable and will correct (but when?).....solid volume, so can't categorise this latest near perpendicular rise as similar to historic blow off tops which have saw hefty corrections of 20% + and both times ultimately lead the shareprice to touch the bottom boundary of its long term price channel

Going above trader targets and the breaking of its 7.5 year rising channel with non-spectacular reported earnings is considered a worry for me, hence the caution channel breakout arrow

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2023082016_2.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2023082016_2.png.html)

Mr P always said FBU was one of best behaved stocks on the NZX (technically speaking)

[Hoop]

Mr P always said FBU was one of best behaved stocks on the NZX (technically speaking)

WAS is the word..

Then Mr P stopped posting on ST and FBU's behaviour went to the dogs... about the same time as Your & Moosies cup and handle type pattern (actually a Big W pattern.) (http://thepatternsite.com/bigw.html)
So whose fault was it???;).

Actually if I can remember accurately Mr P had FBU for 7 years before his TA discipline kicked him out...An great example to prove to people that not all TA'ers are traders...

The chart below has an earlier extension to it ..It shows how well behaved it was up to the GFC...In hindsight apart from one big sucker rally it well behaved in its down trend too right up to the end of 2010***....I've also presented the chart from a different viewpoint..

The end of the global Equity Bear in March 2009 saw FBU rise with most of the other stocks, then broke ranks and traded sideways...after the trading range ended FBU went tempermental and TA unfriendly..
So why did this happen?...usually trends end and patterns come and go, but often a stock chart behaviour lingers on like an individuals personality..A TA friendly stock normally stays friendly even though its various trends and patterns...

Looking at FBU'S chart below, it is easy to see a paradigm behavioural shift occurring around the beginning of 2011.....Sometimes a change in direction of Management Strategy can cause a paradigm behavioural shift...but the chart's timing doesn't agree as Jonathan Ling took the CEO reins in Set 2006 -Oct 2012 and Mark Adamson followed from Oct 2012 onward, so the beginning of 2011 timeline shows the change of CEO is probably not the cause...

Another incident did happen though around that time..the second and destructive Christchurch Earthquake on 22 February 2011 (1st one Sept 4 2010)..

***...Ignore the ridiculous 2008 bear market crash "price tails".. Yahoo data is dodgy at best..

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2023082016%2013year%20chart_2.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2023082016%2013year%20chart_2.png.html)

[BlackPeter]

If you happen to be that day in Christchurch and want to hear Tony Carter (board member of FBU, next to many other roles) speaking - here is your opportunity: http://www.sharetrader.co.nz/showthr...l=1#post639524

[macduffy]

FBU shareprice gained 44c (4.4%) today. Is today AGM day or ...........?

[macduffy]

No, not the AGM. That's next Tuesday 18 October.

[peat]

FBU shareprice gained 44c (4.4%) today. Is today AGM day or ...........?

I still haven't seen anything to drive the price up like that yesterday.... Surely it cant be a response to the govt deciding to create housing supply coz that was announced a few days ago.

[macduffy]

I still haven't seen anything to drive the price up like that yesterday.... Surely it cant be a response to the govt deciding to create housing supply coz that was announced a few days ago.

Yes, all rather strange. Perhaps an optimistic forecast is expected from Tuesday's AGM!

[winner69]

Share price trend unsustainable and will correct (but when?).....solid volume, so can't categorise this latest near perpendicular rise as similar to historic blow off tops which have saw hefty corrections of 20% + and both times ultimately lead the shareprice to touch the bottom boundary of its long term price channel

Going above trader targets and the breaking of its 7.5 year rising channel with non-spectacular reported earnings is considered a worry for me, hence the caution channel breakout arrow

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2023082016_2.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2023082016_2.png.html)

You could well be right ....again

FBU doesn't like double digits does it .....obviously feels more comfortable around $9

[macduffy]

More business for FBU from last night's quakes. Shareprice up 27c this morning.

[BlackPeter]

More business for FBU from last night's quakes. Shareprice up 27c this morning.

Certainly a push into the arm for them. I guess I don't particularly like to use them as customer, but given their near monopolistic position in NZ can this nights events be only positive for them (from a shareholders perspective).

Discl: bought a wee parcel - if you can't beat them, join them ....

[BlackPeter]

Oops ... more than 50 cent drop today (nearly 5%) - and this without any news. Just a wee shake - or did somebody else get the job to repair the recent Earthquake damage?

[Hoop]

Analysts pick strong year ahead for building giant Fletcher Buildin (http://www.nzherald.co.nz/fletcher-building-limited/news/article.cfm?o_id=66&objectid=11782857)g

The NZ Herald article should have been published a year ago when the FBU price was at $6.80...eh?

Hmm...we won't mention about the old investor maxim about investing after reading the news...

For interest sake...No Broker (apart from MSL Capital Markets) picked FBU for 2016 (NZ Herald 26/12/2015) (http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11566121)

The Chart below sees FBU at this moment reaching a critical phase due to a period of selling down (OBV indicator) ....Buy on this support anyone??? (primary trend line + EMA100 (green line)..For me it's not on my life..I will wait and see what develops...


http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2013012017.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2013012017.png.html)

[winner69]

Another pretty ordinary result from Fletcher Building .....and reflected in share price today

[macduffy]

Another pretty ordinary result from Fletcher Building .....and reflected in share price today

Yes, pretty ordinary - and below expectations. Perhaps a warning there that the market is currently priced for perfection?

[Bjauck]

Yes, pretty ordinary - and below expectations. Perhaps a warning there that the market is currently priced for perfection? I am probably being naive, but of all listed companies ,I would have expected FBU to have benefited from High immigration plus earthquake rebuild.

[macduffy]

I am probably being naive, but of all listed companies ,I would have expected FBU to have benefited from High immigration plus earthquake rebuild.

Yes, a big tailwind but they still needed to execute!

[winner69]

I am probably being naive, but of all listed companies ,I would have expected FBU to have benefited from High immigration plus earthquake rebuild.

They have ....but not as much as they should have

Current building boom is at or nearing it's peak - f18 onwards won't be so favourable for them (in NZ)

[winner69]

For what's it worth updated this chart - FBU share price and what it would be at a PE of 13

To answer bjuack's question look at the dotted line - that is how FBU earnings have trended throughout the current building boom. Pretty pathetic eh. As macduffy mentions their execution lacking - an indictment on the highly paid foreign CEO

With lacklustre commentary in latest announcement maybe the share price is coming back to reasonablke levels again - a PE of 13 is what the market reckons most of the time

Hene wouldn't surprise me if we saw $8 again in next year or two.

[winner69]

Fletcher Building as a company is a serial under performer

But good money can be made by riding the market sentiment wave - like last year one of the best performers on the NZX

But that positive sentiment appears to changed eh

[tim23]

NZs biggest company I think by market cap and yet the Dompost can't even report their profit result - how can this be?

[percy]

NZs biggest company I think by market cap and yet the Dompost can't even report their profit result - how can this be?

No surprises there.!
The only surprise is they can't figure why their readership numbers keep falling.!
The ChCh Press[their sister] has turned their business section into a woman's
lifestyle dribble.

[winner69]

NZs biggest company I think by market cap and yet the Dompost can't even report their profit result - how can this be?


You mean the paper version - i take it still gets published?

Stuff had a story
http://www.stuff.co.nz/business/89656708/fletcher-building-profit-rises-as-residential-construction-demand-remains-strong

Main papers not interested in business news these days unless it is a bit scandalous so punters can forward it on etc.

Now if Adamson came out and said internal errors cost them $30m on XYZ project they would be all over it eh. (Was it one of those expressways they building? Just speculation)

[tim23]

Yes paper version don't start me on why they have the share tables in the sport section!

[janner]

No surprises there.!
The only surprise is they can't figure why their readership numbers keep falling.!
The ChCh Press[their sister] has turned their business section into a woman's
lifestyle dribble.

Shows you who controls the purse perc :-))))))

[tim23]

And the Saturday Dompost Business section is usually headed by a budgeting/personal finance story no grunty business or share market story like they used to have when Terry Hall wrote a good column - I wonder if they could coax him out of retirement?

[sb9]

Trading halt...wonder what the news may relate to?? Noticed big pre-market volume though..

[horus1]

There have been big volumes on declining price over the last couple of weeks.

[winner69]

Trading halt...wonder what the news may relate to?? Noticed big pre-market volume though..

About what's happening in Fletcher Construction

Are the losses from that big contract even larger than thought so guidance is reduced .......or the good news maybe that they have recovered the losses and a earnings upgrade

But trading halts are often bad news ....but this time it's different eh

[Joshuatree]

Int , the ASX gives more detail than the NZX?

"Removal of the halt is pending completion of a review of the financial performance of the Construction divisionand its impact on earnings guidance previously provided to the market."

Cancel that have read the 2nd NZX announcement now saying the same.

[mikeybycrikey]

Int , the ASX gives more detail than the NZX?

"Removal of the halt is pending completion of a review of the financial performance of the Construction divisionand its impact on earnings guidance previously provided to the market."

NZX has more info now too. Halt to be lifted before open on Monday, after announcement of earning guidance.

[trader_jackson]

NZX has more info now too. Halt to be lifted before open on Monday, after announcement of earning guidance.

Downgrade coming? :ohmy:

[winner69]

Downgrade coming? :ohmy:

Wonder which project they really stuffed up - one of those expressways they been doing?

[Hoop]

The chart says the news is already out there..
Money flow indicators tell the story when higher than average volume trading occurs...It seems something happened (probably a rumour) about 3 weeks prior the half year result announcement..The smaller players moved out first..After the H1 announcement..it seems the rumour was confirmed and the distribution among the bigger players began and up to the trading halt the distribution of FBU was still going on...

Whether this trading halt announcement is to clarify the situation or an update, the recent distribution of FBU looks like "rats deserting the sink ship" behaviour.

I have no idea what the rumour was or even if there was one (chart suggests there is one)..Using TA it doesn't really matter (nor waste time finding out) A month ago the charts said sell ($10.40) so you sell ...TA suggests we are the last grouping of people to find out...TA tell us what ever it is it's probably not good..

However what ever the news is Mr Market seems to have known for a while now..so the question is,.."has most of this "unknown" stuff been factored in by now?"

...maybe, maybe not...but until TA triggers buy signals the answer as of this moment is no.....

8757

[minimoke]

Value of fletcher eqr remedial work coming to light

[Leftfield]

The chart says the news is already out there..
Money flow indicators tell the story when higher than average volume trading occurs...It seems something happened (probably a rumour) about 3 weeks prior the half year result announcement..The smaller players moved out first..After the H1 announcement..it seems the rumour was confirmed and the distribution among the bigger players began and up to the trading halt the distribution of FBU was still going on...

Great chart Hoop, thanks for posting. (Thankfully I'm not holding.)

[Hoop]

........ (Thankfully I'm not holding.)

Me neither .....

Imagine back in Mid 2010 a time traveller came back from the future and told you half of the story, the half that mentioned a massive Earthquake rebuild in CHCH and a building boom to follow in the other cities due to lack of housing supply, with FBU back them stuck in a trading range of $7.50 - $8.50 you would be mortgaging your house and other assets and backing up the truck to buy as much FBU stock possible............What went wrong??!!!!...doesn't put FBU's top management in a good light does it...

[winner69]

If this is going to be bad and Fletchers come out with a significant earnings downgrade it won't be helping their already dented credibility - it was only a month ago they gave guidance.

not a good look for one of NZ's biggest cocompanies.

that Mark Adamson guy has been given an easy time by the market over the last few years - maybe they really need to puta rocket up him.

[winner69]

Adamson gets paid an awful lot - it puts Luxon's outrageous $4.7m at Air New Zealand to shame

Mark worth every cent of it no doubt

[Major von Tempsky]

The Fletcher spokesman said it was "very complicated" and "it would take 2 hours to explain".
Maybe somebody could attempt a potted summary?

[voltage]

what does this say about a company that cannot make good money in boom times. Metro glass is another that cannot make good money in boom times in the construction industry.

[winner69]

what does this say about a company that cannot make good money in boom times. Metro glass is another that cannot make good money in boom times in the construction industry.

...and Steel and Tube struggle to capitalise on a boom as well ....a boom taht maybe has already peaked

[voltage]

does this mean we stick with utilities, retirement sector and courier services

[percy]

does this mean we stick with utilities, retirement sector and courier services

No there are plenty of other great sectors;
AWF..Labour Hire.
EVO..Early education providers.
EBO and GXH.Medical supplies.
HLG and BRG .Savvy retailers.
THL and MCK.Tourism.
HBL,TNR .Finance/motor vehicle.insurance.
SAN,SCL,SEK Primary produce.

[Beagle]

Me neither .....

Imagine back in Mid 2010 a time traveller came back from the future and told you half of the story, the half that mentioned a massive Earthquake rebuild in CHCH and a building boom to follow in the other cities due to lack of housing supply, with FBU back them stuck in a trading range of $7.50 - $8.50 you would be mortgaging your house and other assets and backing up the truck to buy as much FBU stock possible............What went wrong??!!!!...doesn't put FBU's top management in a good light does it...

Sums the situation up superbly.


what does this say about a company that cannot make good money in boom times. Metro glass is another that cannot make good money in boom times in the construction industry.

Pathetic is the word that springs to mind.

[horus1]

This is just bad management. Why you do not want a investment guy running a construction firm and sacking many of the old guard. I'm a shareholder .What is the board doing about this.

[winner69]

Oh well, what's a $110m between friends


They said Mark Adamson stated that it was extremely regrettable that expected profitability for FY17 in the Construction division has worsened since comments made at the time the H1 17 results were reported.

Yes Mark it is regrettable - but you obviously don't seem to know what's really going on in your company or if you do you haven't been upfront with the market

A month ago the impact was $10m and now it's $100m - wonder how bad it really is

[sb9]

https://nzx.com/companies/FBU/announcements/298465

Absolutely shocking!!!

"The company now expects operating earnings before interest, tax and significant items (“EBIT”) to be between $610 million to $650 million for the year ending 30 June 2017. This compares with the previous EBIT guidance range of $720 million to $760 million."

[BlackPeter]

what does this say about a company that cannot make good money in boom times. Metro glass is another that cannot make good money in boom times in the construction industry.

Hmm - yes, but ...

Not sure whether I would put these two into the same basket. FBU is clearly a serial underperformer with a board who has proven time and again that they are not able to cease opportunities - despite having extremely friendly market conditions (quasi monopoly in NZ, a huge moat (literally) and lots of earthquakes supporting the demand side.

MPG is (compared to FBU) a still quite young (listed) company. They invested heavily last year (using as well the money from the listing) - and it looks like they need a bit more time to learn how to productively use all these new toys. Normal learning curve.

I still would give MPG the benefit of the doubt (and hey, they might be at current prices even a bargain) as opposed to FBU who have in my view proven their lack of competence beyond reasonable doubt.

[winner69]

Lot of airline experience on the Board

But one Director with airline experience did once own a Mitre 10 store

Just an observation

Hopefully the Boards patience with their star CEO with an outrageous pay packet is niw wearing thin

[Beagle]

Time for the board to harden up and make some heads roll. Honestly if they can't do well in boom times hire some new management that can ! I'm with BlackPeter on this one, FBU have proven beyond reasonable doubt they are a recidivist under performer with deeply embedded systemic issues.
Disc: I have never owned their shares and probably never will.

[winner69]

FWIW updated the FBU chart showing shareprice v wht it would be if traded at a PE of 13 (longish term average)

Updated eps in now included - wouldn't be surprised if share price is sub $8 soon (PE of 13 on current guidance is about $7.50)

The share price at a PE of 13 line is how their earnings have trended over time

Just to support what others have posted earnings today are no more than what they were post GFC and the the start of the current building boom .... and significantly less than what they were at the peak of building boom that ran in the early 2000's

Enough said about one of NZ's biggest companies

Luckily not many on ST own any shares in FBU ....but we need to keep reminding ourselves what a dog this company is .....but in saying that heaps of money can be made on FBU by following the charts (market sentiment is a funny thing)

[trader_jackson]

This 'hit' was worse than I thought... will be interesting to see how the market reacts.

I agree that FBU should be creaming it right now, especially given there 'monopolistic' like position in parts of the market.

Disclosure: not holding, and no longer interested in holding

[winner69]

few weeks time could be a great buying opportunity t_j

[Beagle]

FWIW updated the FBU chart showing shareprice v wht it would be if traded at a PE of 13 (longish term average)

Updated eps in now included - wouldn't be surprised if share price is sub $8 soon (PE of 13 on current guidance is about $7.50)

The share price at a PE of 13 line is how their earnings have trended over time

Just to support what others have posted earnings today are no more than what they were post GFC and the the start of the current building boom .... and significantly less than what they were at the peak of building boom that ran in the early 2000's

Enough said about one of NZ's biggest companies

Luckily not many on ST own any shares in FBU ....but we need to keep reminding ourselves what a dog this company is .....but in saying that heaps of money can be made on FBU by following the charts (market sentiment is a funny thing)

Good chart mate, image says a thousand words. Must be time for something similar on SUM comparing their underlying earnings average PE ratio in March for the last 5 years and graphically representing that...suspect we'd get quite a different result.

[bull....]

what does this say about a company that cannot make good money in boom times. Metro glass is another that cannot make good money in boom times in the construction industry.

also cavalier, methven, steel and tube etc etc something inherently wrong with the quality of managements and boards in NZ.

[Hoop]

.......Whether this trading halt announcement is to clarify the situation or an update, the recent distribution of FBU looks like "rats deserting the sink ship" behaviour................[16th March 2017 chart included]....

The news is out and the investors not privy to the "in the know" (or uses TA discipline investment strategies) got slaughtered this morning....

In hindsight with todays bad announcement confirms there was was no rumour it was fact!!! Therefore it is assumed that there was a leak of information..

The chart shows this Market information leak not known to everyone therefore it must be assumed some parts of the last 10 days trading has to include elements of insider trading.....The charts OBV indicator says the bigger players (smart money) started to move out 10 days ago. The chart shows it was a slow orderly exit and as the news of the leak spread throughout the investment community the chart (OBV) shows the exiting gathering momentum ..

The steep drop this morning indicates most investors weren't privy to the market leak....Therefore there should be a NZX enquiry

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2016032017.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2016032017.png.html)

[Nasi Goreng]

I've followed the FBU price up and down over the last few years and it looks like a good trading stock. One thing is for sure, being able to generate $600-800M in EBIT is never a given, perceived monopoly or not.

With a base line profit expectation of around 600-800M, these guys are under just as much competitive pressure as all businesses, plus cost blow outs are definitely part of the game.

[Bjauck]

also cavalier, methven, steel and tube etc etc something inherently wrong with the quality of managements and boards in NZ. It seems surprising to me, that with high material prices and the ChCH rebuild and high immigration that construction-related businesses have not prospered more.

[bull....]

It seems surprising to me, that with high material prices and the ChCH rebuild and high immigration that construction-related businesses have not prospered more.

yes and when you consider some probably use cheap inferior imported products you would think the margins would be pretty good.

[bull....]

An example of margin increase for some dishonest folk to use is gib board for lining your walls standard gib board say costs around $26 per standard sheet if you buy the cheaper board from china or Indonesia say its around $15 roughly, if the customer is just charged for lining the walls with no idea what they paid for the contractor has pocketed an extra 42% profit on the job. Happens with all sorts of products

[BlackPeter]

Amazing ... just updated my spreadsheet on FBU (reduced earnings, dropped SP - using $8.15) - and somehow it still does not look like a good buying proposition (forward PE 12.7, average PE 17.5 and growth ... well, less than 4% if we believe in the company) ... though there probably will be at some stage some swing back of the SP ...

I think I will watch this from the sidelines and leave it to the people who are better in riding dead cats than me ...

[Beagle]

The news is out and the investors not privy to the "in the know" (or uses TA discipline investment strategies) got slaughtered this morning....

In hindsight with todays bad announcement confirms there was was no rumour it was fact!!! Therefore it is assumed that there was a leak of information..

The chart shows this Market information leak not known to everyone therefore it must be assumed some parts of the last 10 days trading has to include elements of insider trading.....The charts OBV indicator says the bigger players (smart money) started to move out 10 days ago. The chart shows it was a slow orderly exit and as the news of the leak spread throughout the investment community the chart (OBV) shows the exiting gathering momentum ..

The steep drop this morning indicates most investors weren't privy to the market leak....Therefore there should be a NZX enquiry

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU%2016032017.png (http://s458.photobucket.com/user/Hoop_1/media/FBU%2016032017.png.html)

Good call Hoop. To make a profit projection one month ago and then come out with such a material downgrade, something is seriously wrong with managements ability to forecast and some people in the investment community were tipped off to the potential for a downgrade. Analyst meeting with management subsequent to results perhaps leading to downgrade tip to their clients ?

Where does the buck stop Mr Anderson for such an appalling situation ? http://www.sharechat.co.nz/article/da9949e6/fletcher-s-disclosure-of-110m-of-construction-contract-woes-wrong-foots-investors.html?utm_medium=email&utm_campaign=Fletchers%20disclosure%20of%20110M%20 of%20construction%20contract%20woes%20wrong-foots%20investors&utm_content=Fletchers%20disclosure%20of%20110M%20o f%20construction%20contract%20woes%20wrong-foots%20investors+CID_49d83f53e37d34764eaae6d7f484 2cdf&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticleda9949e6fletch er-s-disclosure-of-110m-of-construction-contract-woes-wrong-foots-investorshtml

[winner69]

Not too much damage done today post the bad news

Only fell to where it was just over 6 months ago

[BlackPeter]

FBU actually did run today a conference call to provide excuses for their poor performance ... it just appears that they forgot to invite their shareholders. Here is a recording:

http://www.fbu.com/assets/incoming/20-March-2017-Guidance-Update-Conference-Call.mp3

Here is a media release from the New Zealand Shareholder Association:

http://www.nzshareholders.co.nz/pdf/correspondence/fletchers%20media%20release.pdf

[minimoke]

If Fletchers are loosing money in this golden period of construction how are other companies going to fare?

[BlackPeter]

If Fletchers are loosing money in this golden period of construction how are other companies going to fare?

Good question. The market took today some other building stocks down, too (though much less in percentage). At this stage however I don't think that this is an industry wide thing - it looks more like incompetent FBU board and management. How else could we explain that the market knew already 2 months earlier than board and management (who obviously strictly follow continuous disclosure requirements :sleep:) about Fletcher's problems?

Maybe they should fire the board and CEO (saving millions on the way) and just hire some of the people who sold their shares early? This are the people who understand the company.

Discl: I sold early ... but am not interested in the CEO position. Wouldn't say no though to a nice warm seat at the board table ;). I could help them to detect problems in future earlier by notifying the board whenever they crash through the MA100.

[Beagle]

FBU actually did run today a conference call to provide excuses for their poor performance ... it just appears that they forgot to invite their shareholders. Here is a recording:

http://www.fbu.com/assets/incoming/20-March-2017-Guidance-Update-Conference-Call.mp3

Here is a media release from the New Zealand Shareholder Association:

http://www.nzshareholders.co.nz/pdf/correspondence/fletchers%20media%20release.pdf

NZSA chairman not pulling any punches and neither should he. Fact is accountability stops with the CEO and this fiasco has happened under his watch.
What confidence can the market have that other fixed price commercial contracts previously won under the old systemically flawed bidding process but yet to be executed can be undertaken with normal profit margins ? Wood rot in poorly maintained / managed homes always goes deeper than you think and I think that's a good analogy for the systemic issues FBU faces.

[winner69]

NZSA chairman not pulling any punches and neither should he. Fact is accountability stops with the CEO and this fiasco has happened under his watch.
What confidence can the market have that other fixed price commercial contracts previously won under the old systemically flawed bidding process but yet to be executed can be undertaken with normal profit margins ? Wood rot in poorly maintained / managed homes always goes deeper than you think and I think that's a good analogy for the systemic issues FBU faces.


Roger - the likes of Norris (chair) and your mate Carter must be gutted by these events

Adamson said the gravity of the situation wasn't known until last Thursday - tell me another one.

[Baa_Baa]

Adamson said the gravity of the situation wasn't known until last Thursday - tell me another one.

Birdy told me the goss for a wee while has been something not right with a couple of builds (might explain the 7 week declines steepening into the TH). Even a few internals been unloading stock (they have a generous staff share buying scheme), some even got caught out by the TH, so not 'all in the know'. Just seems that the scale of the problem wasn't generally known, even internally, seems even the big guys might not have known, or he's telling porkies.

[winner69]

Listened to some of that briefing - it's all a big guess eh this conservative likely loss

As one analyst suggested - wonder how much might be written back in future years

Or the feeling of others - how much more to come

All a big guess eh

[Snow Leopard]

Every company in the world gets a quote (or two) terribly wrong at some point.

You are generally happy if it does not take the company down.

I have a few horror stories I could tell you, but you will have to pay for the drinks.

Best Wishes
Paper Tiger

[horus1]

Once upon a time I got board approval for a $640m project. As I left the board meeting the chairman ,now deceased , quietly told me if I was more than 10% over budget I would be sacked. It was a difficult project and in those days inflation was in the high teens. The project was bought in on time to budget but he meant it and it was a SOE.

[Baa_Baa]

Once upon a time I got board approval for a $640m project. As I left the board meeting the chairman ,now deceased , quietly told me if I was more than 10% over budget I would be sacked. It was a difficult project and in those days inflation was in the high teens. The project was bought in on time to budget but he meant it and it was a SOE.

Luckily one might have factored in line item contingency of at least +10% (invisible) and a grouped items contingency of +10% (invisible) and an overall governance tolerance contingency of +10% (visible), so the directors felt they had some wiggle room.

Then one delivers to the overall number (on budget), or better still the grouped item contingent number (under budget), but never the line item number or they'll fire you for overly conservative estimating and all the other things they couldn't do because they allocated too much $ to ones project. Then they all congratulate themselves cos they were such clever governors and happily gave you the next project business case. Well done.

Estimating any development project, let alone a large or very large project, on limited information and lots of variable moving parts is a b1tch. It is the epitome of the saying "prognostication is a hopeless thankless task with all too often scorn to begin with and ridicule to end with" (Asimov).

The only guarantee in estimating project costs is that the total estimate will be wrong. The estimators must provide the governors with enough wiggle-room to make decisions and the project tema with enough wiggle room to sustain even the largest divergences, without being so farcically over-estimated from the outset that the project doesn't get approval to proceed.

FBU's spec reps and estimators must be feeling the hurt on these ones. I bet they're the fall guys, no way the big wigs will take this on the chin. Rule #1 - never make the governors look like dweebs.

;)

[Beagle]

Roger - the likes of Norris (chair) and your mate Carter must be gutted by these events

Adamson said the gravity of the situation wasn't known until last Thursday - tell me another one.

Yes and Yes is the short answer. I suspect Tony Carter has been embarrassed about FBU's performance for some time now because when I brought up the subject at the last AIR AGM I attended he stopped the conversation very quickly..it was all politeness and much niceness until that point. CEO's head should role, completely unacceptable that such deep systemic problems were allowed to come about in the first place.
There will be losses and / or completely unacceptable level's of profit on future fixed price commercial contracts based on bids won that were based on systemically flawed costing systems...you can take that to the bank I reckon.
Plenty of smoke...no idea why any shareholder would hang around to see the inevitable fire. If this is the peak of the cycle which it clearly is why anyone would value this cyclical with deeply imbedded system operational issues on more than a forward PE of 10 is lost on me. I suspect as the real truth of how deeply embedded the problems are come to light I wouldn't be surprised at all to see FBU's share price test their recent low of $6.70. Classic case of watching the TA on this one which even using very basic TA like selling after a confirmed break of the 100 day MA would have got investors out without losing their shirt.

[Baa_Baa]

One can get overly emotional about this "fire the CEO!" he's ultimately culpable. Sure he his, but it's not some simple oversight.

I suspect that the estimators got caught out by specifying approved imported products that have been subsequently proven to be below spec, and the whole works to-date have to be scrapped, pulled down and rebuilt with higher spec products.

I don't think that anyone at FBU is directly or individually at fault, they've been duped, plain and simple, by the suppliers of the products and shafted in the process. Can't pin that individually on the management or the CEO. It's unreasonable for any builder to have to test their suppliers products to prove that they meet the importation specifications. Think of the overheads that would place on the NZ building industry. Imho.

The CEO and top brass will endure the consequences as will shareholders, and some poor minions will be sacrificed, but the issue is with the lying duplicitous suppliers (this has been playing out for months and months).

Look a little deeper and try to factor in how FBU could have been duped into buying substandard product.

[Beagle]

Probably fair comment to some extent I suspect Baa Baa. I presume you are referring too the Waterview construction contract and misrepresentations regarding concrete and steel ? That said, some of the stuff coming out of China not up to N.Z. building spec is hardly a "new" issue.

[horus1]

As CEO you are responsible . Dont make excuses for him.

[Baa_Baa]

Probably fair comment to some extent I suspect Baa Baa. I presume you are referring too the Waterview construction contract and misrepresentations regarding concrete and steel ? That said, some of the stuff coming out of China not up to N.Z. building spec is hardly a "new" issue.

I don't know for sure Roger, but I strongly suspect so. I agree though, that shareholders should consider their exposure to capital and earnings, as it's a major divergence from guidance. The SP could gyrate around a bit. But it's hardly a doomsday scenario imo.

So, knocking the CEO off the perch seems small solace and doesn't seem to me to be the solution, nor does there seem to me to be systemic issues with FBU, in this case. For example, no one seems to have considered that FBU may have out-performed prior to and during the CH rebuild etc etc and until now they've maintaining par?

Maybe shareholders expectations are above and beyond the company's realistic ability to sustain mind boggling growth in earnings? Sure, it's time in NZ for massive infrastructure investment and FBU are getting a lions share, though this time they got shafted by a dodgy supplier and have a couple of projects that have to go back to square one. Not a really big deal in the scheme of things, but annoying, yes for sure.

FBU is still the go-to large infrastructure developer in NZ and in the main they do a great job and make a truck load of profit for their shareholders.

Sh1t happens sometimes, they'll get over it and move on, with a lesson that they can't trust all their suppliers all the time.

[stoploss]

One can get overly emotional about this "fire the CEO!" he's ultimately culpable. Sure he his, but it's not some simple oversight.

I suspect that the estimators got caught out by specifying approved imported products that have been subsequently proven to be below spec, and the whole works to-date have to be scrapped, pulled down and rebuilt with higher spec products.

I don't think that anyone at FBU is directly or individually at fault, they've been duped, plain and simple, by the suppliers of the products and shafted in the process. Can't pin that individually on the management or the CEO. It's unreasonable for any builder to have to test their suppliers products to prove that they meet the importation specifications. Think of the overheads that would place on the NZ building industry. Imho.

The CEO and top brass will endure the consequences as will shareholders, and some poor minions will be sacrificed, but the issue is with the lying duplicitous suppliers (this has been playing out for months and months).

Look a little deeper and try to factor in how FBU could have been duped into buying substandard product.

Presumably FBU through Placemakers have been selling this inferior product to the average punter and small to med sized builder ? So if it was no good for them should we see a general recall of a lot of product sold through Placemakers ??

[Baa_Baa]

As CEO you are responsible . Dont make excuses for him.

As a CEO one is 'accountable' and responsible.

Are shareholders so aggrieved that they would kill off the CEO on a whim, when it may have been beyond the CEO or anyones realistic ability to have realised that they have been duped by a shonky supplier? Let alone the consideration that the CEO might be precisely the right choice to recover company to outperformance?

It's too easy imo to bark about firing CEO's.

FBU is still very profitable. It may return to outperformance, but that could take a bit longer with a new CEO.

[winner69]

Except for Emily those analysts in that conference call seemed pretty upbeat about the future

One F17 is all dusted and put away things will be 'normalised' and earnings forecasts will be positive ....and the share price will head back to $10

Today was probably good buying .....but keep an eye on those charts. As Hoops points out they tell an awful lot.

[Baa_Baa]

Presumably FBU through Placemakers have been selling this inferior product to the average punter and small to med sized builder ? So if it was no good for them should we see a general recall of a lot of product sold through Placemakers ??

Maybe, seems a good question. That would be a nightmare wouldn't it, having to recall a product that has been set in concrete as the foundations and walls of countless constructions!

Might be interesting to look into who else has been unwittingly importing and selling shonky steel? That would be systemic, beyond FBU and affecting the wider construction industry.

Look, I honesty don't know what's behind the large projects failures, but it stands to reason that after months and months of media discussion about shonky steel, it could be a root cause. I guess we'll find out soon enough.

My point really is, shareholders are too quick to shoot the CEO when a dilemma occurs, when it might just be the same CEO that the company needs to shore up the company's sustained profitability.

[Joshuatree]

Ive ahorrible feeling it is systemic throughout the industry .Too much money to be made and am i right that the companies themselves were left to monitor and check for quality and didn't or were very lax ; accepting the word of chinese and other exporters or a stamp on the steel as kosher etc.

Has FBU ever outperformed? 10 year chart shows a high before GFC of re $13 and since then its only got back over $10 in the latter half of 2016.

[bermuda]

Ive ahorrible feeling it is systemic throughout the industry .Too much money to be made and am i right that the companies themselves were left to monitor and check for quality and didn't or were very lax ; accepting the word of chinese and other exporters or a stamp on the steel as kosher etc.

Has FBU ever outperformed? 10 year chart shows a high before GFC of re $13 and since then its only got back over $10 in the latter half of 2016.

What is going on.? Apparently Fletcher were promoting themselves only weeks earlier.
Unacceptable. This is really bad. Shareholders will not like this.

[Servaas]

Have any of the many prominent names on FBU's board yet commented on this serious governance failure?
Their silence is palpable - and remarkable!

[winner69]

No doubt the analysts will again be clamouring for Fletcher's to be broken up - the sum of parts much greater than the whole.

Adamson said with 30 business units it was a very 'complex' business to manage so maybe the best solution

[winner69]

Fletchers and Warehouse financial performance pretty ordinary the last few years.

Noticed that both have highly credentialed and charismatic CEOs who seem to have a foreign accent

Just an observation

[macduffy]

Have any of the many prominent names on FBU's board yet commented on this serious governance failure?
Their silence is palpable - and remarkable!

It's not individual board members' role to comment on "serious governance failures". That's the job of the CEO and Chairman. Other board members make their case within board meetings for or against an issue. If they don't like the outcome, their remedy is to resign.

[winner69]

It's not individual board members' role to comment on "serious governance failures". That's the job of the CEO and Chairman. Other board members make their case within board meetings for or against an issue. If they don't like the outcome, their remedy is to resign.

And possibly Norris didn't know the gravity of the situation until last Thursday .....needs to get his head around the issues

[macduffy]

Are these the "problem"contracts?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11822127

[Beagle]

Ive ahorrible feeling it is systemic throughout the industry .Too much money to be made and am i right that the companies themselves were left to monitor and check for quality and didn't or were very lax ; accepting the word of chinese and other exporters or a stamp on the steel as kosher etc.

Has FBU ever outperformed? 10 year chart shows a high before GFC of re $13 and since then its only got back over $10 in the latter half of 2016.

Classical cyclical then. There's an argument that at the peak of the cycle it should be trading on a PE of about 7. I wouldn't touch this company with a 40 foot barge pole.

Are these the "problem"contracts?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11822127

Almost certain to be part of the problem as initial costing's were rejected by SKC so its clear FBU had to sharpen their pencil to a fine point.

[RTM]

So someone has got a job done for a lot less than the real cost. I really hope it is a public job, for the NZ Government or some City amenity. Much prefer that than a private company enjoying the windfall.

[winner69]

Some Christchurch Sharetraders will be pleased that Michele who was in charge of Fletcher EQR is now now CEO of Fletcher Construction

She must have done a a good job for Fletchers while in charge of EQR

https://www.nzx.com/companies/FBU/announcements/298711

[BlackPeter]

Some Christchurch Sharetraders will be pleased that Michele who was in charge of Fletcher EQR is now now CEO of Fletcher Construction

She must have done a a good job for Fletchers while in charge of EQR

https://www.nzx.com/companies/FBU/announcements/298711

Reshuffling deck chairs?

[peat]

So someone has got a job done for a lot less than the real cost. I really hope it is a public job, for the NZ Government or some City amenity. Much prefer that than a private company enjoying the windfall.

negative corporate welfare makes a nice change lol
SKC may have opportunity to make some reval gains following completion?

[Rep]

Echoing comments about the serial underperformance of FBU - part of the reason I have elected not to invest in passive funds based on the NZX50 is that large components of the index are devoted to companies with largely mediocre management and boards with similar levels of performance such as FBU, WHS, CNU, SPK, TWR and SKT. The free float measure also means stocks likes Briscoes and MHI don't make the cut...

FWIW, I don't know if my own self-managed portfolio has done markedly better than the NZX overall but I don't think investing funds in some pretty mediocre stocks without a lot of growth potential because they happen to be large is necessarily a great criteria either.

[peat]

Echoing comments about the serial underperformance of FBU - part of the reason I have elected not to invest in passive funds based on the NZX50 is that large components of the index are devoted to companies with largely mediocre management and boards with similar levels of performance such as FBU, WHS, CNU, SPK, TWR and SKT. The free float measure also means stocks likes Briscoes and MHI don't make the cut...

FWIW, I don't know if my own self-managed portfolio has done markedly better than the NZX overall but I don't think investing funds in some pretty mediocre stocks without a lot of growth potential because they happen to be large is necessarily a great criteria either.

great comment Rep. I'll give you some rep for that.

[cyclist]

Echoing comments about the serial underperformance of FBU - part of the reason I have elected not to invest in passive funds based on the NZX50 is that large components of the index are devoted to companies with largely mediocre management and boards with similar levels of performance such as FBU, WHS, CNU, SPK, TWR and SKT. The free float measure also means stocks likes Briscoes and MHI don't make the cut...

FWIW, I don't know if my own self-managed portfolio has done markedly better than the NZX overall but I don't think investing funds in some pretty mediocre stocks without a lot of growth potential because they happen to be large is necessarily a great criteria either.

Veering off topic, but agree entirely. I have a friend who is looking for some suggestions on investments and would probably prefer to keep things simple. I am struggling to recommend a NZX Dividend fund (as an example) for exactly this reason.

[whatsup]

FBU still getting hammered today!

[sb9]

FBU still getting hammered today!

I do not think its finished yet...would expect down further....sp with 6 handle??

[RTM]

negative corporate welfare makes a nice change lol
SKC may have opportunity to make some reval gains following completion?
SKC......OOOOOO....That will really hurt ! Almost exactly what I didn't want.

[winner69]

Another candidate for problem project ???

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11824825

The problems they've owned up to are in the 'Building and Interiors" part of Construction business

This tunnel wouldn't be part of the current known problems - maybe another one brewing?

[Baa_Baa]

The problems they've owned up to are in the 'Building and Interiors" part of Construction business

This tunnel wouldn't be part of the current known problems - maybe another one brewing?

Unlikely, the delay is a rounding error on the project contingency budget. No point scaremongering, the tunnel has nothing to do with the 'other issues'.

[BlackPeter]

Great article from Bryan Gaynor in today's NZ Herald: FBU (and some other NZ companies) treating retail shareholders as second class citizens:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11824823

and remember - if you don't like this behaviour ... support & join the NZ shareholder association: https://www.nzshareholders.co.nz/

[JoeGrogan]

Great article from Bryan Gaynor in today's NZ Herald: FBU (and some other NZ companies) treating retail shareholders as second class citizens:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11824823

and remember - if you don't like this behaviour ... support & join the NZ shareholder association: https://www.nzshareholders.co.nz/

Thanks for posting was a good read.

[minimoke]

Some Christchurch Sharetraders will be pleased that Michele who was in charge of Fletcher EQR is now now CEO of Fletcher Construction

She must have done a a good job for Fletchers while in charge of EQR

https://www.nzx.com/companies/FBU/announcements/298711
Proof that you get promoted to your highest level of incompetence.

[beetills]

Good summary of FBU on Chris Lee's website today.
Failing in boom times seems to be the general picture.