AVG - ex McQuigan Wines thread - a "Compelling bargain"

[winner69]

Made heaps at the turn of the century with MGW McGuigan Simeon Wines when Aussie wine stocks were the in thing before over supply of wine hit the world.

Been on the old watchlist since.

Brandes Investments been buying and have said "Compelling bargains are often overlooked in equity markets. It is our mission to take advantage of these bargains."

Thought of Snoopy when reading this bit in the Aussies paper though -

McGUIGAN Simeon Wines' scrip just keeps on falling and it's making a monkey out of just about everyone who has tried to pick the bottom.

In August the country's third-biggest winemaker reported that it was unable to make a cent on nearly $300 million of sales, reckoning it had lost $5.9 million, but that was after a tax credit which, if extracted, left a $9.5 million loss.

Strangely enough, that wasn't enough to frighten punters and maybe chairman David Clarke's forecast of a small profit for the current year engendered a bit of confidence.

But in recent weeks the share price has fallen right out of bed, dropping to $1.26 — a level not witnessed for nearly a decade.

The price deterioration has had different effects on different fund managers.

Take David Paradice. His funds management operation surfaced as a substantial shareholder in June with slightly more than 5 per cent of the capital. The cost? Well, about $2.69 a share.

But Paradice is a money man who quickly cuts his losses, hence his decision the other day to bail out of 3 million shares at $1.31 apiece.

Relieving him of the stock was California-based Brandes Investment Partners.

Brandes did a spot of averaging down. Before the latest buying, Brandes paid $1.65 for bulk lines of stock, and before that about $2.12 a share. The fund is now sitting on 16 per cent of the capital.

Why did they buy them?

A clue from Charles Brandes' investment thinking. "Compelling bargains are often overlooked in equity markets. It is our mission to take advantage of these bargains."

http://www.theage.com.au/news/business/something-to-wine-about/2007/11/10/1194329562552.html


Maybe a good to have a closer look at what has been going on lately ...... has to make money one day and then the share price will be on fire.

Sick looking chart though

http://au.finance.yahoo.com/q/bc?s=MGW.AX&t=5y&l=on&z=m&q=l&c=

[Huang Chung]

With Huntley's, MGW went from being a 'Buy' to a 'Sell/Avoid the Stock' at the time they decided to cease coverage in October. In their final write-up, they noted that 'A recovery is unlikely before 2010'.

Since then, the USD has only continued to weaken against the $A, and the little voice in my head keeps saying 'Evans and Tate'....'Evans and Tate' over and over.

Still, MGW is now damn cheap.....I just hope there are no issues about survivability.

[shasta]

With Huntley's, MGW went from being a 'Buy' to a 'Sell/Avoid the Stock' at the time they decided to cease coverage in October. In their final write-up, they noted that 'A recovery is unlikely before 2010'.

Since then, the USD has only continued to weaken against the $A, and the little voice in my head keeps saying 'Evans and Tate'....'Evans and Tate' over and over.

Still, MGW is now damn cheap.....I just hope there are no issues about survivability.

Thanks for posting this thread Winner...

Wine is an area of interest to me, & i have run the ruler over a few wine companies ...(incidently NWC:NZX is one of the few profitable ones!)

HC - I think a recovery in the industry could start from 2H 2008 - 1H 2009, now the oversupply problem has been addressed.

MGW - On watch

[winner69]

Still hanging in around the 125 mark so this may be where it sort of bottoms out.

Agree shasta that it might take until next year or so for the wine supply problems to balance out but the signs are lokking more positive in this respect.

On the assumption that this sector might be the flavour of the month next year it does pay to keep a close eye on some preferred stocks well before the cycle starts and not until the smart money has already ramped up the shareprices

Keeping a close eye on MGW

[shasta]

Still hanging in around the 125 mark so this may be where it sort of bottoms out.

Agree shasta that it might take until next year or so for the wine supply problems to balance out but the signs are lokking more positive in this respect.

On the assumption that this sector might be the flavour of the month next year it does pay to keep a close eye on some preferred stocks well before the cycle starts and not until the smart money has already ramped up the shareprices

Keeping a close eye on MGW

Clever minds thinking alike huh?

Im also thinking water & alternative energy will play a big part in the not too distant future.

[winner69]

Positive stuff out of the AGM and MGW has taken off - up over 35% in last week or so

Missed the initial rise to 140 but took a small nibble then and seen it go to 169 as at today .... good stuff

Don't really know if I should get more heavily involved now or wait until some real tangible positive news ........ still considering that ........ but will ride the current trend until weakness appears ...... you never know might even get to 500 in the next year or so

[winner69]

Good day today for MGW which was up 10% for the day to close at 198.

Really pleased with the 40% rise over the last month on those I bought at 140 odd and even those got in the 170's not looking too bad either

Obviously a lot of positive sentiment around at the moment ..... maybe that $5 isn't a pipedream after all

[kura]

w69
I was listening to this interview with Geoff Wilson (hold WIL) and Intelligent Investor (you don't have to be a subscriber to hear it), a lot of it was general stuff that wouldn't interest you, however there was specific comments regarding MGW, towards the end of interview (basically said "be very carefull" )
Follow link to hear Geoff Wilson interview
http://www.intelligentinvestor.com.au/

[Huang Chung]

New strategy announced......'why don't we change our name?!'

http://stocknessmonster.com/news-item?S=MGW&E=ASX&N=163882

[yogi-in-oz]

:)

Hi folks,

MGW ..... we will be alert for some negative news, soon and
other MGW time cycles in January/February 2008, may be:

04-07012008 ... negative news expected here

16012008 ... 2 cycles ... negative spotlight on MGW

21012008 ... minor cycle ... finances???

13-15022008 ... 2 significant and negative cycles ... finances???

18022008 ... minor and positive

More later .....

happy days

paul

:)

=====

[winner69]

w69
I was listening to this interview with Geoff Wilson (hold WIL) and Intelligent Investor (you don't have to be a subscriber to hear it), a lot of it was general stuff that wouldn't interest you, however there was specific comments regarding MGW, towards the end of interview (basically said "be very carefull" )
Follow link to hear Geoff Wilson interview
http://www.intelligentinvestor.com.au/

Thanks for that Kura ..... very interesting interview overall .... and noted the McGuigan comments

Sounds like Wilson was of the same frame of mind as me a few years ago and made heaps in the early days being selling out

Like I said I have always kept a watching brief on MGW over the subsequent years as it gone through troubled times ..... like Wilson said from a well managed and lead small company to one that got too big and lost it ways.

I don't know if its troubles are over ..... high levels of debt without much in the way of positive cash flow is dangerous .... and it could all end up in tears as many commentators say.

However something positive is currently driving the MGW shareprice .... even up 2.5% today on a down day for the market ..... and while this positive momentum and sentiment remains why not stay for the ride ..... watching those charts closely and tight stops in place ..... OK if there ain't an overnight disaster eh

I Note that Wilson has Cockatoo Wines as one of their investments ..... not an inspiring chart either ..... but Wilson obviously sees some turn around for the Aussie wine industry ..... maybe one to watch

[POSSUM THE CAT]

Winner any wine company with a guaranteed water supply (for both grapes & winery)unable to be diverted for other purposes will be in the box seats as the supply of grapes dries up due to the drought. So has cockatoo got such a supply?

[shasta]

Winner any wine company with a guaranteed water supply (for both grapes & winery)unable to be diverted for other purposes will be in the box seats as the supply of grapes dries up due to the drought. So has cockatoo got such a supply?

MGW closed up 22c to $2.25 to end the year.

Has sentiment for the industry started to turn already?

An interesting stock indeed, & on close watch!

[winner69]

MGW closed up 22c to $2.25 to end the year.

Has sentiment for the industry started to turn already?

An interesting stock indeed, & on close watch!

An interesting stock indeed ..... up more than 10% today on not too bad volumes for this time if the year and has nearly doubled since this thread started less than 2 months ago

Something must be in the wind ...... maybe Brandes knew something when they said "Compelling bargains are often overlooked ......."

Not complaining though ...... good end to the year

[winner69]

New strategy announced......'why don't we change our name?!'

http://stocknessmonster.com/news-item?S=MGW&E=ASX&N=163882

Shareprice has headed south since the name change

The ride was good while it lasted but the trailing stop said sell at 200 so out it went (Phaedrus would be proud of me)

just waiting for the next time around ...... that was just a trial run .... when it does really turn around things will be great

[shasta]

Shareprice has headed south since the name change

The ride was good while it lasted but the trailing stop said sell at 200 so out it went (Phaedrus would be proud of me)

just waiting for the next time around ...... that was just a trial run .... when it does really turn around things will be great

Great work, thats a nice tidy profit especially for a company/industry we thought would turn around much later on.

Still watching, but will await the whole industry turn around before buying.

[winner69]

Well way back below 100 .... sure has been dowhhill for this stock since it changed its name (now AVG on the the ASX) and Brandes stopped buying. Brandes have sold some shares of late but still pretty substantial

No turnaround for the Aus wine industry on the horizon but AVG do appear to be doing some right things

Getting interested in having another go .... last trade was very successful

[shasta]

Well way back below 100 .... sure has been dowhhill for this stock since it changed its name (now AVG on the the ASX) and Brandes stopped buying. Brandes have sold some shares of late but still pretty substantial

No turnaround for the Aus wine industry on the horizon but AVG do appear to be doing some right things

Getting interested in having another go .... last trade was very successful

AVG put out a good presentation, that reflects IMO there turn around.

http://www.stocknessmonster.com/news-item?S=AVG&E=ASX&N=167949

Some sales of non core assets has returned a good chunk of cash ($80m), & they are back into profit!

[Phaedrus]

Especially for you, W69, this chart gives 5 suggestions for possible entry signals into AVG.

http://h1.ripway.com/Phaedrus/AVG93.gif

Notice how the OBV (a leading indicator) tends to give earlier signals than most other indicators shown here.

Observe the abrupt "step" in the OBV (magenta circle) - this signalled that big holders were bailing out. This was a very clear exit signal, just in case anyone had perhaps missed the trendline break and the OBV trendline break.

The chart includes the latest price of 98.5 cents - the Close may be different. AVG is still in a downtrend, as is the OBV.

[winner69]

Thanks Phaedrus

One of those dreaded abrupt steps on the OBV ---- amazing how often they seem to occur and give a good signal as to the future direction of a stock (upsteps as well as down steps)

I was thinking about $1 or so was a good point. Give it a week or so to see what happens as the trend line and your trailing stop get closer to a $1 as well ..... doesn't look like I need to panic. seeing it has fallen from 231 to under 100 this year a period of consolidation around the current mark is probably a good sign .... and might add some strngth to any increase

Had a few good AVG trades over the years ..... like some of their products ..... been to some of their vineyards ..... met some of their management .... and the wine industry will get much better one day and AVG sem to be positioning themselves for better times ... sometime in the future


So this is a bit of FA / TA effort ..... happy with the company ..... and the charts seem to behave pretty well and the amplitude of the swings is attractive enough to have a go.

Thanks again P

[shasta]

Thanks Phaedrus

One of those dreaded abrupt steps on the OBV ---- amazing how often they seem to occur and give a good signal as to the future direction of a stock (upsteps as well as down steps)

I was thinking about $1 or so was a good point. Give it a week or so to see what happens as the trend line and your trailing stop get closer to a $1 as well ..... doesn't look like I need to panic. seeing it has fallen from 231 to under 100 this year a period of consolidation around the current mark is probably a good sign .... and might add some strngth to any increase

Had a few good AVG trades over the years ..... like some of their products ..... been to some of their vineyards ..... met some of their management .... and the wine industry will get much better one day and AVG sem to be positioning themselves for better times ... sometime in the future


So this is a bit of FA / TA effort ..... happy with the company ..... and the charts seem to behave pretty well and the amplitude of the swings is attractive enough to have a go.

Thanks again P

I should add, in my earlier post when i referred to the "turnaround", i was meaning the business back into profitability, not the chart!

I like this company too Winner69, it's one of two non resource companies i'm tracking, & have been for a while.

If you are after a boutique brewer, have a look at LWB ;)

[h2so4]

I should add, in my earlier post when i referred to the "turnaround", i was meaning the business back into profitability, not the chart! ;)

Geez your not wrong, on this years results it appears to be a screamin bargain.

[h2so4]

I should add, in my earlier post when i referred to the "turnaround", i was meaning the business back into profitability, not the chart!

I like this company too Winner69, it's one of two non resource companies i'm tracking, & have been for a while.

If you are after a boutique brewer, have a look at LWB ;)

Hey shasta the shares are priced at 65% discount to book value?? Are we being misled on true book value????

[shasta]

Hey shasta the shares are priced at 65% discount to book value?? Are we being misled on true book value????

I'll have to go thru the financials & see what assets are potentially inflated.

Sounds too good to be true, but stranger things have happened!

[winner69]

I

If you are after a boutique brewer, have a look at LWB ;)

That LWB looks interesting ... in Melbourne for a few days next month .... might try out the the Little Creatures Dining Hall in Fitzroy and try some of their Pale Ale or the Brights Ale.

See also they are into cider .... I have noticed more and more people drinking cider of late .... not wowsers either .... so LWB might be on to something hear.

One thing about successful boutique brewers is that if things right they often get taken over. Pretty richly priced at the mo but I'll kreep an eye on and try out the stuff

[shasta]

That LWB looks interesting ... in Melbourne for a few days next month .... might try out the the Little Creatures Dining Hall in Fitzroy and try some of their Pale Ale or the Brights Ale.

See also they are into cider .... I have noticed more and more people drinking cider of late .... not wowsers either .... so LWB might be on to something hear.

One thing about successful boutique brewers is that if things right they often get taken over. Pretty richly priced at the mo but I'll kreep an eye on and try out the stuff

If you wouldn't mind, can you post your thoughts about the company/product(s) after your visit, i'd be keen to know. ;)

[winner69]

Shasta - no probs ... could be a good place for a sharetraders meeting ... ha ha

Fitzroy is quite a funky place anyway so something like a Little Creatures seems a good fit

[winner69]

I note that Lion own a fair chunk of Little World

Shasta .... got some good feedback on the Little Creatures place in Fitzroy .... for a beer and pie it is the place to go ... a big barn of a place and pretty well packed out on the weekends

Looking forward to trying it out

[shasta]

I note that Lion own a fair chunk of Little World

Shasta .... got some good feedback on the Little Creatures place in Fitzroy .... for a beer and pie it is the place to go ... a big barn of a place and pretty well packed out on the weekends

Looking forward to trying it out

Good stuff, i'm hoping we've unearthed a little gem here...

Looking forward to your "review" ;)

[shasta]

Good stuff, i'm hoping we've unearthed a little gem here...

Looking forward to your "review" ;)

AVG - Loxton Winery Sale Update

http://www.stocknessmonster.com/news-item?S=AVG&E=ASX&N=169525

[shasta]

CKR - for $9m you can buy the company, and get $3m in cash and $10m in wine inventory. The vineyard comes free :-)

I've got CKR on my "food & beverage" watchlist, will dig a little deeper on it.

Cheers for bringing this to my attention...

[STRAT]

Especially for you, W69, this chart gives 5 suggestions for possible entry signals into AVG.

http://h1.ripway.com/Phaedrus/AVG93.gif

Notice how the OBV (a leading indicator) tends to give earlier signals than most other indicators shown here.

Observe the abrupt "step" in the OBV (magenta circle) - this signalled that big holders were bailing out. This was a very clear exit signal, just in case anyone had perhaps missed the trendline break and the OBV trendline break.

The chart includes the latest price of 98.5 cents - the Close may be different. AVG is still in a downtrend, as is the OBV.Hi Phaedrus,
Based on the above would you take the spike upward on the OBV and RSI on the 12th Nov and a few days before as significant?
I have decided not /maybe:D based on total volume which over those two days was around 1.2 mill where as the total volume for the period indicated on your chart mid May was around 3 mill and that this is a very lightly traded stock

[AMR]

Anything up with this stock fundamentally? It's still on my watchlist...the chart has been saying nothing but sell though.

[shasta]

Anything up with this stock fundamentally? It's still on my watchlist...the chart has been saying nothing but sell though.

Yup, i'll post the relevant links...

It's a bit too early for the Viticulture industry to recover just yet IMO...

The Loxton Winery Sale hasn;t gone thru yet either...

http://www.stocknessmonster.com/news-item?S=AVG&E=ASX&N=169525

AGM Presentation

http://www.stocknessmonster.com/news-item?S=AVG&E=ASX&N=169671

I collect wine as a hobby, & like AVG, just not yet...

[winner69]

AVG still on the watchlist ..... hard to imagine this was great short term trade a year ago and I sold out at around 200 ..... and it is now 16 cents

AVG still survives (with the help of its bankers no doubt) and the Aust wine industry revival has been delayed a few years .... but one day Aust wine industry will do well again .... and hopefully AVG will be around to partake

AVG at 16 cents is interesting .... keep an eye on those charts

[Phaedrus]

Hi Phaedrus, would you take the spike upward on the OBV and RSI on the 12th Nov and a few days before as significant?
I have decided not/maybe.
Sorry Strat, I have only just now noticed this question that you posted last year!
I would see the volume spike you speak of (number (2) on the chart) as significant and the attendant OBV rise as noteworthy - but not sufficient evidence to trigger a Buy signal. Note the complete absence of any confirmatory signals. No RSI Buy, No RVI buy, No trendline break buy. No moving average crossover buy. No trend change. This chart offers some nice examples of the importance of not acting on the basis of any individual signal in isolation. See how the OBV trendline break gave a Buy signal at point (1) but there was no confirmation whatsoever from other indicators at that time. Then your volume spike at point (2) - same story. Point (3) gave a trendline-break buy signal - again, totally unsupported by other indicators. Not long after this we got another of the dreaded OBV downward steps (magenta circle) as already discussed in this thread. Technically, right now, things could hardly look worse for AVG.

http://h1.ripway.com/78963/AVG32.gif

[winner69]

Shocking chart eh Phaedrus ... what happens when a company owes the banks heaps and cash flows get smaller.

Amazing what was said by that 'investor' in the first post of this thread .... assume Brandes are still in ..... started at 125 and bought all the way to 200 odd I think .... acompelling buy eh

[shasta]

Shocking chart eh Phaedrus ... what happens when a company owes the banks heaps and cash flows get smaller.

Amazing what was said by that 'investor' in the first post of this thread .... assume Brandes are still in ..... started at 125 and bought all the way to 200 odd I think .... acompelling buy eh

AVG - Things are turning around!

http://www.asx.com.au/asxpdf/20090813/pdf/31k27hg948ny1k.pdf

Check out the last 2 days!

http://hfgapps.hubb.com/asxtools/imageChart.axd?BI=2&COMT=index&OVS=XJO&TF=D6&TIMA1=20&TIMA2=20&s=AVG

I'm not buying anything at present, but have been watching AVG for a while.

I have an interest in the Wine & am watching both AVG & CWT closely.

[STRAT]

Wow turned alright and lifted off

[AMR]

Sheesh...what a rally!

[shasta]

Sheesh...what a rally!

AVG - Vintage Report & Trading Update

http://www.stocknessmonster.com/news-item?S=AVG&E=ASX&N=178306

Now last year wasn't a good one for AVG or the viticulture sector in general, but NPAT forecast to be 75% higher than last year!

Is this the start of a turn around for the depressed viticuture sector?

The AUD/GBP has also had an effect on sales, so a weakening $A will provide more upside

[Lizard]

Despite Mothership and I having slowed down our wine intake a little of late, and Craic & AA being no use at all by taking up distilling, it still looks like AVG are making a bit of a comeback. Plenty of leverage to a recovery, though not certain the ground is solid under them yet. The interest cover must still bother their nerves - especially taking into account that cashflow is down.

Would take a hefty cap raising to reduce the debt substantially, but perhaps if the share price gets a bit more momentum behind it, they'll be keen to take the opportunity to de-leverage.

[Stranger_Danger]

There is a large part of me that is close to buying this one...but...the debt...the debt...

Still haven't pulled the trigger.

[Lizard]

Still watching this one - they have steadied the ship and turned it around, but headwinds are such that progress could be rocky. Have underpinned the share price with a 2.6cps div, so could still be one to accumulate and hold for the div while waiting for the turnaround... however, with the debt load still significant and no improvement in profit forecast, it could be a slow trip, even if a cheap one here at 38cps.

[Stranger_Danger]

I decided to buy in the end, have been accumulating over the last year.

I agree. I think (and hope) that this one is a slow burner which are my favourites - nothing worse than having a small cap quickly go up 5 fold, but you only have a few shares.

With a bit of luck, debt being paid down slowly but consistently, wine glut clearing itself and weak competitors continuing to fall, decent dividends and the ability to slowly pick them up at a low valuation whilst waiting for their day in the sun to roll around.

That would be the plan, anyway!