MFT - Mainfreight. Global Freight & Logistics

[BlackPeter]

You would think that they would understand that they have some responsibilities when being allowed to roam between the areas and just get on with it.

They do. It is just that the government decided to introduce these testing requirements (literally) over night without consultation with the industry and without defining a process to e.g. provide evidence for the test.

Government would have had 15 months or so to prepare (I guess it was predictable to have different alert levels in the country, was it not?), but Labour was too busy sitting on its laurels, preparing the big steal of water assets from the local councils and splashing Covid money around for installing surveillance cameras on fishing boats.

Typical Labour fairy dust - just say its going to happen and it does (not ...).

[alokdhir]

MFT closed 91.75 ...down 8% from its top ...Normally thats about max it drops below its recent high ...so maybe a buying opportunity ?

Tremendous volumes traded into passive funds ...never seen MFT having biggest T/O of the day ...3.2 Mil shares ...Most likely these shares are locked in as passive funds dont trade unless sold be retail investors in large numbers ...it should dry up some supply ?

Next week after Index inclusion will set the tone ahead ....MFT dropped on last day and FPH went up !!!

[mikelee]

Yes, been watching from the sideline for a few days now. The SP has been falling since I bought in and hit a new low of $90.xx this morning :confused:. Comfortable with my holdings atm though, and hoping for an upward trend once dividend is confirmed for later in the year :t_up:.

[alokdhir]

Yes, been watching from the sideline for a few days now. The SP has been falling since I bought in and hit a new low of $90.xx this morning :confused:. Comfortable with my holdings atm though, and hoping for an upward trend once dividend is confirmed for later in the year :t_up:.

Yes ..instead of $ 100 ...$ 90 come ...lol ....But no worries mate ...its the most reliable stock of NZX

[iceman]

Yes, been watching from the sideline for a few days now. The SP has been falling since I bought in and hit a new low of $90.xx this morning :confused:. Comfortable with my holdings atm though, and hoping for an upward trend once dividend is confirmed for later in the year :t_up:.

1 week range 90.70 - 96.50
4 weeks range 88.00 - 99.78
26 weeks range 66.00 - 99.78
52 weeks range 45.00 - 99.78

A bit of perspective, despite poor SP performance last week or so.
A very happy holder.

[JohnnyTheHorse]

From a technical perspective caution would have to be advised at these levels in the time horizon of ~1-3 months. Looking like a monthly climax top after a very strong run and there is a large distance from monthly EMA's.

I would be watching $88 as a potential pivot area for a bounce, but only to expect a weekly lower higher. If we lose this level then we can expect monthly consolidation, at which point I'd start scouting a buy around monthly EMA12 and support areas (likely $80-82).

Can't predict what will happen, but can have a game plan for the likely scenarios and take action if they play out.

[alokdhir]

From a technical perspective caution would have to be advised at these levels in the time horizon of ~1-3 months. Looking like a monthly climax top after a very strong run and there is a large distance from monthly EMA's.

I would be watching $88 as a potential pivot area for a bounce, but only to expect a weekly lower higher. If we lose this level then we can expect monthly consolidation, at which point I'd start scouting a buy around monthly EMA12 and support areas (likely $80-82).

Can't predict what will happen, but can have a game plan for the likely scenarios and take action if they play out.

Agree with your analysis ...been saying for a while that MFT is too far above its long term averages and will need to consolidate ...but going to $ 81 is almost 20% below recent top ...only possible in very bad overall markets scenario ...most likely $ 88 and then back in business ...

[mikelee]

good to see the SP on an upward climb again, :) hopefully with AKL down to Lv3 some back logs can be cleared
I wonder if NZ is short of truck drivers too like the rest of the world though? :confused:

[daveypnz]

Struggling to get through $96

[mikelee]

or to break thru the $100 barrier earlier :p
read an article this week about how the shipping back log around the world is not likely to ease until later next year

[daveypnz]

Should hopefully find a floor around here @ the 50 day ema/10 week ema

[mikelee]

Only topped up yesterday and I see it's gone sub $90 this morning.
Oh well, I expect the logistic business to be doing very well for at least another 2 years, so not too worried atm.:cool:

[JohnnyTheHorse]

Hourly RSI down to 15 so I have built a short term trade position this morning.

[iceman]

A lot of selling pressure here for the last couple of weeks and the exuberant gains back in September have been largely reversed, which I find surprising given the way the company appears to be tracking very nicely on all fronts. Having said that, we are still up around 25% for the first half of the financial year so pretty pleased with that.

[daveypnz]

She's looking real ugly on the chart, looks headed for the 100ma.

[alokdhir]

Looks like going toward 80-82 range soon ....But will be great buy around that ...

[Biscuit]

Looks like going toward 80-82 range soon ....But will be great buy around that ...

Sure looks like its got a bit of downwards momentum at the moment but if it overshoots down to 80-82, which I doubt, it won't stay there for long. We are only a few weeks from the interim results. Top of my list for accumulation next week.

[Valuegrowth]

https://www.hellenicshippingnews.com/cost-of-shipping-between-china-and-u-s-plunges/

[mikelee]

I'm not too concerned about plunging shipping cost, unless it's so low that overheads can't be covered. Freight forwarder's margin is probably more or less still the same and the difference just passed on to the shipper. Lower cost might reflect less waiting time too, so it's win-win for all. Definitely looking forward to the interim results to give the SP a boost, so have been topping up since SP hit the low 90s. :cool:

[Rawz]

SP down a bit more today. Still looks expensive on a historical P/e of 46

The Kingfish qrtly update said it even got too pricey for them and they sold some down. Must have been expensive for those long term holders to flog some off

[mikelee]

Oh really? I though long term holders would have bought in at a far lower price.
I won't be topping up again, to average down, until the half year result next month. :t_down:

[Biscuit]

Oh really? I though long term holders would have bought in at a far lower price.
I won't be topping up again, to average down, until the half year result next month. :t_down:

Its going to be a satisfactory result, though well signaled (profit before tax up about 80%). Will be interesting to see what they see ahead - except of course MFT always see growth ahead.

[mikelee]

According to Wall Street Journal's video below, it could still be a while before the global shipping problem is resolved, even with the White House ordering ports to operate 24/7.

https://www.youtube.com/watch?v=qsGsmEbODBg

[Rawz]

This is what KFL said. All good.

"Mainfreight was the standout performer in the September quarter. On 1 September, the company released another trading update. That was the eighth detailed update in the past 18 months, compared to three trading updates per year normally. Unique times call for unique transparency which reflects the company’s quality management team. This update showed a strong acceleration in performance, with weekly average profit before tax increasing from $6.2 million (weeks 1–17) to $7.3 million (weeks 18–22). The company is helping its Air & Ocean freight customers navigate extreme disruption to supply chains – this presents the opportunity to add greater value with commensurate rewards. We trimmed our position slightly during the month as the share price has been very strong on the back of index changes."

[iceman]

Its going to be a satisfactory result, though well signaled (profit before tax up about 80%). Will be interesting to see what they see ahead - except of course MFT always see growth ahead.

And always grow :-) I think there is little doubt they are having an outstanding year but obviously the SP ran a bit ahead of itself. But lets not forget that 1 year ago we were sitting around the $53 mark and this financial year we're still up 19% after the fall in the last couple of weeks.

[winner69]

This is what KFL said. All good.

"Mainfreight was the standout performer in the September quarter. On 1 September, the company released another trading update. That was the eighth detailed update in the past 18 months, compared to three trading updates per year normally. Unique times call for unique transparency which reflects the company’s quality management team. This update showed a strong acceleration in performance, with weekly average profit before tax increasing from $6.2 million (weeks 1–17) to $7.3 million (weeks 18–22). The company is helping its Air & Ocean freight customers navigate extreme disruption to supply chains – this presents the opportunity to add greater value with commensurate rewards. We trimmed our position slightly during the month as the share price has been very strong on the back of index changes."

Trimmed their position ..... but MFT holding % of fund higher at 20.3% :t_up:

No doubt they will watch that 20% number closely and react if it goes over it again

[Rawz]

Trimmed their position ..... but MFT holding % of fund higher at 20.3% :t_up:

No doubt they will watch that 20% number closely and react if it goes over it again

That was end of September. SP down 10% since then so market has trimmed it for them.

But KFL managers the best in the business so no doubt they trimmed heaps more down to $90 and will buy back in when its around $82

[alokdhir]

MFT results date ??? Any ideas ???

[maclir]

Last year was 10 November for the six months to Sept 30

[alokdhir]

Last year was 10 November for the six months to Sept 30

This year not yet known ...no announcements I could find ...maybe late Nov ???

[JeffW]

This year not yet known ...no announcements I could find ...maybe late Nov ???

November 11th per NZX.com

[mikelee]

surprised to see the SP on a downward slide with potential dividend on the way :confused:

[777]

surprised to see the SP on a downward slide with potential dividend on the way :confused:]

With a dividend yield of .87% I doubt the dividend would be a consideration in any buy/sell decision.

[winner69]

Goodness gracious me - MFT share price in the mid 80's

Down 15% from the august high .... that's a big correction

The way analysts think we are likely to see some adjustment downwards of their targets ....exp that guru who has a $107.50

Question - will share price recover half year announcement?

Harbour / Jarden seemed to time the trimming of their holding well in September

[alokdhir]

Goodness gracious me - MFT share price in the mid 80's

Down 15% from the august high .... that's a big correction

The way analysts think we are likely to see some adjustment downwards of their targets ....exp that guru who has a $107.50

Question - will share price recover half year announcement?

Harbour / Jarden seemed to time the trimming of their holding well in September

After a big run up this is normal correction...maybe 80-82 possible ...but this is good place to get in IMHO

[Sideshow Bob]

Service announcement from today:



Mainfreight Service Announcement
Freight Volumes4 November 2021


Good afternoon

Peak Season Update
As we head towards the Christmas period, we are facing a different set of challenges than last year when COVID-19 Alert Level 1 settings across New Zealand allowed us to trade through and manage traditional high season freight volumes.

This year, increased COVID-19 restrictions, an exceptional upswing in home deliveries as businesses shift to online trading, and major inter-island freight disruption are all factors that are slowing down supply chains.

We would like to remind all customers, as we head towards Christmas, it is prudent to allow an additional 1-2 working days to transit times.

Inter-island Freight
Today we have been advised by KiwiRail that the Aratere has suffered a mechanical issue that will impede inter-island sailings. The situation is compounded with the Kaiarahi already off-service with gear box issues since September, leaving one fully functional ferry for KiwiRail, plus Bluebridge services.

We believe KiwiRail is exploring an option to commission an alternative offshore vessel to replace lost capacity across the Cook Straight. However, should this eventuate, the timing is unlikely to be soon enough to alleviate high season volumes.

We recommend early communication with your receivers. Please liaise with your local branch, who will be able to advise details of altered inter-island transit times as they emerge.

Other Contributing Factors
Our Warehouses are also experiencing challenges, as shipping and offshore manufacturing delays result in large numbers of containers arriving at irregular intervals with inbound inventories, creating pressure to fulfil back orders and discharge large batches of containers. Our teams wish to thank our customers for their continued understanding.

We expect the reopening of retail and other businesses residing in COVID-19-restricted areas will additionally create further resupply challenges and urgency. The supply chain is finite in capacity including resources, and we ask for an allowance of time as our teams manage this eventuality.

Our Air & Ocean teams wish to convey their appreciation for the ongoing support in difficult times as they design solutions to navigate global port congestion, equipment shortages and space constraints.

Summary
To help, we ask that customers:

Book early – When we receive consignment note uploads and freight early in the day, we can plan more effectively and improve segregation, linehaul capacity, etc.

Adjust transit expectations – Where possible, please communicate with your customers/receivers around when they need product. Whilst our aim is to get consignments to receivers in line with expectations, there will be delayed shipments. To avoid over-promising and under-delivering, it is important that transit tolerances are extended for reasons outlined earlier.

Urgent Shipments – Please advise urgent consignments through to our customer services team. They can provide available service options and tracking.

Home deliveries – Home deliveries slow down any network, as seen with most courier operators. Simply providing us with a receiver’s mobile/text number allows improved communication to complete deliveries.

Inter-island movements – Delays are imminent, and we will look to provide further updates as more information comes to hand.

[winner69]

After a big run up this is normal correction...maybe 80-82 possible ...but this is good place to get in IMHO

Sort of like the comment you read in the media ..... a bit like down because of some profit taking

Is 15% a 'normal' correction?

[BlackPeter]

Sort of like the comment you read in the media ..... a bit like down because of some profit taking

Is 15% a 'normal' correction?

Correction?

13180

SP just touching the EMA 100 - this is just a normal text book uptrend where SP got a little bit ahead of itself.

[nztx]

did someone say $100 by Christmas time ? ;)

At this rate - it may be just in time for 2 for $100 :)

be a nice Chrissy present :)

as all the boys & girls want their MFT shares cashed up, so they have some dosh to fling around at The Warehouse :)

[iceman]

Correction?

13180

SP just touching the EMA 100 - this is just a normal text book uptrend where SP got a little bit ahead of itself.

Nice chart thanks BP. Puts it into perspective. Can’t see why any holder of this fine company would be panicking

[alokdhir]

With results just a week away ...MFT is not showing any signs of results exuberance which all stocks normally do ...Seems some big seller is happy to sell at these levels . Will need more consolidation in the 80s or post result back in business ?

Only time will tell . Excellent stock to buy and forget . Did have a huge run up from 70 to almost 100 ...so giving back half the gains ( partly due to index inclusion too)

Its at a safe entry point for new investors with reasonable 15% returns in next 12 months if not more ...But 15% is big returns for a safe and mature stock like MFT .

[Sideshow Bob]

Nice chart thanks BP. Puts it into perspective. Can’t see why any holder of this fine company would be panicking

Beautiful Chart!

Sounds like you are "well positioned" Iceman!! :p

[mikelee]

I feel much better now. :)

[iceman]

Beautiful Chart!

Sounds like you are "well positioned" Iceman!! :p

Have never doubted it with this great company :t_up:

[kizame]

Yes it is a wonderful company, everything about this company shines, how they treat their people and customers, their vehicles are polished, and their bases particularly the one at the mount, I havn't seen others but the logo on the building is an outstanding sculpture.
Certainly not a mature company, but they have signalled their financials for the year so no surprises there. Starting to wake up now maybe.

[alokdhir]

Sort of like the comment you read in the media ..... a bit like down because of some profit taking

Is 15% a 'normal' correction?

Looks like market took note of u not liking its 15% correction ...so they trying to correct it to maybe 10 % from peak buddy :p

[Biscuit]

With results just a week away ...MFT is not showing any signs of results exuberance which all stocks normally do ...Seems some big seller is happy to sell at these levels . Will need more consolidation in the 80s or post result back in business ?

Only time will tell . Excellent stock to buy and forget . Did have a huge run up from 70 to almost 100 ...so giving back half the gains ( partly due to index inclusion too)

Its at a safe entry point for new investors with reasonable 15% returns in next 12 months if not more ...But 15% is big returns for a safe and mature stock like MFT .

Good end to the week for MFT. Provided plenty of buying opportunities over the week and is now my biggest holding. Ongoing global freight issues a big positive for them short-term, maybe even provide a boost to long term growth on their way to world domination?

[alokdhir]

MFT results tomorrow ...It has done its usual 10-15% from recent top correction

IMO it has now the legs to cross $ 100 mark before year end .

[mikelee]

Music to my ears. :t_up:

[Sideshow Bob]

Great result!!



Mainfreight Half Year Financial Results 30 September 2021 - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/382631)

Mainfreight Half Year Financial Results 30 September 2021

11/11/2021, 8:30 amHALFYRMAINFREIGHT LIMITED

11 November 2021
Financial result for the six months ended 30 September 2021 (Unaudited)
Commentary

Mainfreight is pleased to announce our half-year financial results to 30 September 2021. These are in line with our expectations and reflect the ongoing development of our global network, with all five regions contributing strongly to the improved financial performance.

Revenue $2.274 billion Up $665.52 million or 41.4%
Profit before tax $181.99 million Up $79.72 million or 78.0%
Net profit $130.81 million Up $57.89 million or 79.4%
- The impact of foreign exchange is considerable. Excluding FX, Revenue is increased 48.2%, Profit before tax by 86.2%, and Net profit by 87.9%.
- There are no abnormal items in the current year, nor the year prior.
- An interim dividend of 55 cents per share has been set by the Board of Directors, payable on 17 December 2021; an increase of 83.3%.

We are pleased with this result, particularly in light of supply chain congestion and ongoing lockdown disruptions across most markets.

Air & Ocean revenue performance in all regions has increased because of higher air and sea freight rates and an increase in freight tonnage as a result of market share gains and consumer demand. We remain focused on solutions for our customers as we navigate congested supply chains across a wide range of trade lanes, both domestically and internationally.
Divisional Performance (figures in local currencies)

New Zealand (NZ$)
Revenue $498.45 million Up $119.55 million or 31.6%
Profit before tax $48.07 million Up $10.57 million or 28.2%
A disrupted first half performance for our New Zealand operations with our Transport network affected with the August Level 4 lockdown enforcement, albeit volumes are recovering well as restrictions have eased. There has been a significant increase in home deliveries.

Warehousing activity continues to be strong as customers hold more inventory to better withstand supply chain disruptions.
Air & Ocean volumes continue to grow as we find solutions for our customers in the congested shipping and airfreight environment.
Trading across all three divisions has continued to strengthen post-September with expectations of this continuing well after December. Unfortunately, a lack of rail and ferry capacity is slowing inter-island deliveries.
Australia (AU$)

Revenue AU$525.04 million Up AU$121.83 million or 30.2%
Profit before tax AU$44.52 million Up AU$13.96 million or 45.7%
Our Australian business continues to find increasing growth and profitability, predominantly from increased market share.
The ongoing intensification of our domestic Transport network is benefiting our customers. Three additional regional branches are expected to open over the next 12 months increasing our reach across Australia. Service levels, while improving regional coverage, are under pressure as volumes begin to stretch our capacity in main centres.
Warehousing volumes have continued to grow, as new customers are attracted to our offering. New Warehousing facilities for Sydney, Melbourne and Adelaide are confirmed and under construction to cater for this growth. Additional capacity is being negotiated for Brisbane.

Air & Ocean volumes and revenue also remain elevated as demand exceeds supply across our international network.
Europe (Euro €)

Revenue €260.43 million Up €66.65 million or 34.4%
Profit before tax €12.57 million Up €5.50 million or 77.8%
Improved trading across all three divisions has assisted this result.
Better Warehousing utilisation with improved stock levels is helping. A number of new Warehousing customer gains are expected with the need to increase our footprint in the medium term. However, return-per-square-metre still lags our Warehousing businesses in other regions.

Transport margins are not as healthy as we would like with lower than expected utilisation across a number of new line-haul routes, particularly into and from Germany. Brexit delays add to the already-stressed supply chain, albeit volumes have reduced from their peak earlier in the year.

Air & Ocean revenue and volumes, like elsewhere in our global network, have benefited from consumer demand and market share gains.

Whilst trading post the August European summer period has not been as strong as we would have expected, volumes pre-Christmas are increasing and Transport utilisation levels are improving.

The Americas (US$)
Revenue US$441.40 million Up US$193.38 million or 78.0%
Profit before tax US$34.83 million Up US$26.33 million or 309.7%

By far, this result is dominated by the performance across our Air & Ocean business, where demand has been exceptional. Whilst volumes have increased and new customer gains are assisting, the ability to secure additional capacity is restricting our growth.
Domestic Transport volumes have continued to increase with improved road line-haul utilisation throughout our network. Increasing market share is assisting, as is a greater focus on our LCL customer profile.
Warehousing utilisation and activity continues to increase. Our three new warehouses across Texas, Pennsylvania and Toronto, Canada, are now occupied; however efficiency in our new and largest site in Texas (50,000m2) has been hampered by a shortage of warehouse racking supplies. This is expected to take a further three months to rectify.
Our CaroTrans NVOCC wholesale business has also benefited from strong international shipping demand, particularly in the volumes of LCL freight movement driven by high FCL container pricing and the shortage of capacity.
Trading post-September across our USA businesses has continued to be strong and is expected to remain this way post-December.
Asia (US$)

Revenue US$110.35 million Up US$67.41 million or 157.0%
Profit before tax US$11.50 million Up US$7.52 million or 189.2%

Our Asian operations are primarily focused on our Air & Ocean products and are an important link in our global trade development. Accordingly, we have benefited in increased demand for shipping and airfreight capacity. Pleasingly, this continues to extend across all nine countries we are located in across Asia, with improving contributions from our Southeast Asia branch network.
In line with the balance of our international network, airfreight volume and capability continues to be a significant contributor. Similarly, sea freight capacity constraints are limiting growth.

Trading remains strong post-September and is expected to continue, subject to space availability, well into the New Year and leading up to Chinese New Year.

Product and Service Updates

Air & Ocean (NZ$)
Revenue $1,115 million Up $467.68 million or 72.2%
Profit before tax $86.89 million Up $58.19 million or 202.8%
Capacity shortages and customer demand remain at elevated levels, particularly across ocean freight requirements for most global trade lanes that we are involved in servicing. In turn, this is increasing demand for airfreight services across a depleted air network due to a lack of passenger flights, and the resulting shortage of belly space for airfreight tonnage.
Port congestion is exacerbating the ocean freight supply issues with in excess of 600 vessels on average waiting outside the world’s ports, pending discharge. Container equipment shortages add to the situation.
It is our expectation that the imbalance of supply and demand will see supply chain congestion remain into the near future, with freight rates similarly remaining elevated.

The Mainfreight Air & Ocean network continues to focus on finding space availability solutions wherever possible for our customers. This includes bulk-shipping and alternative services to address container shortages, and the chartering of aircraft where volumes dictate.

The benefits of our own network are allowing our people to maintain reasonable service levels for our customers in light of the congestion.

Sales revenues across our Air & Ocean network have increased 72%, largely as a result of air and sea freight rates, but also reflecting a 30% increase in our volumes.

Transport (NZ$)
Revenue $894.32 million Up $147.74 million or 19.8%
Profit before tax $72.91 million Up $15.47 million or 26.9%

Our domestic Transport businesses in all countries are coping with the increased volumes and transit times have been relatively unaffected. However, in New Zealand, where there is a shortage of rail and ferry capacity between the two islands, we are advising customers to ship earlier rather than relying on overnight and two-day service levels. Maintaining “Just In Time” inventory levels is becoming more difficult as supply chain congestion continues.
Volumes have increased in line with revenue growth – a combination of market share increases and consumer demand across all of our key domestic transport markets.

Warehousing (NZ$)
Revenue $264.62 million Up $50.11 million or 23.4%
Profit before tax $22.19 million Up $6.06 million or 37.6%
Our Warehousing footprint across all regions has increased 16% in the past six months; notably, our USA footprint is up 50%.
This brings our total square metres of warehousing to 936,153m2. New customer gains and larger inventory holdings from established customers have contributed to these increases. Additional warehousing capacity is planned across all five regions as new customer gains are confirmed; likely exceeding 250,000 m2 over the next 24 months. Warehouse automation trials in Australia and the USA have been successful, encouraging us to plan and implement further automation as new sites are developed.
Slower ocean freight services are seeing congested container arrivals into warehouses, and at times delaying the despatching of back orders.

Group Operating Cash Flows

Operating cash flows were $178.4 million, down from $188.5 million in the prior year, reflecting supply chain congestion and freight rate increases in our Air & Ocean division. This has increased our working capital requirements.
Net debt is $115.7 million, up from $102.2 million at 31 March 2021, an increase of $13.5 million.
Gearing ratios are consistent with 31 March 2021 at 8.8%.

During the half-year, net capital expenditure totalled $92.0 million, with expenditure for land and buildings, including fit out, accounting for $65.8 million, plant and equipment of $12.4 million, and information technology of $13.8 million.
Our expectations are for capital expenditure for the full financial year ending 31 March 2022 to be in the range of $208 million. A further $290 million is estimated for capital expenditure in the 2023 financial year.

Network development remains a key strategy; with 57 leased and owned facilities under development across all five regions.
Dividend

The Board of Directors has approved an interim dividend of 55 cents per share fully imputed at the 28% company tax rate, with the books closing on 10 December 2021; and payment made on 17 December 2021. This is an 83.3% increase on the prior year’s interim dividend.

Senior Executive Appointment for New Zealand
We are pleased to announce the appointment of Carl George to the role of New Zealand Country Manager, replacing Craig Evans who has resigned and will leave the business at the end of January 2022.
Carl’s career with Mainfreight spans almost 27 years, during which he has held various sales, branch management and leadership roles, both here and overseas. For the last ten years, he has successfully led our Transport division in New Zealand. Carl will transition into the role of leading the full New Zealand business over the ensuing weeks.
We appreciate all that Craig has achieved for Mainfreight in his 34-year tenure. He leaves the business in a strong position, performing well across all three divisions. Carl will continue to build on this platform, bringing his passion for efficiency and quality, and with solid support from our team.

Outlook
We remain satisfied with this financial result for the half-year.
Increased consumer demand, ongoing market share activity, and elevated international shipping and airfreight rates contribute to the result.

Our exposure to 26 different countries across five regions is providing a significant competitive advantage. Our network intensification continues to increase our regional coverage in most countries. However, the unprecedented supply chain congestion and demand has required delivery expectations be extended.

Trading post the half-year has seen a continuation of current financial and volume trends; at times significantly ahead of the prior year. We remain optimistic these levels of activity and growth will continue across our global network for the remainder of this financial year and into the next. Service levels for our customers is our key consideration in light of the significant freight volumes being handled by our people across our networks.

Mainfreight will release its financial results for the full 2022 financial year on 26 May 2022. In light of current trends, we will provide a nine-month trading update mid-February 2022.

For further information, please contact Don Braid, Group Managing Director, telephone +64 9 259 5503, +64 274 961 637 or email don@mainfreight.com.

[alokdhir]

"Trading post the half-year has seen a continuation of current financial and volume trends; at times significantly ahead of the prior year. We remain optimistic these levels of activity and growth will continue across our global network for the remainder of this financial year and into the next. Service levels for our customers is our key consideration in light of the significant freight volumes being handled by our people across our networks."

Important part ....They now clearly saying next FY will also be growing at good levels ...Should be rerated up in next 3 months ...SP $ 120 by March possible

[Muse]

Such a fine company. I haven't looked at how it compares to consensus expectations but regardless, a fine company. Hopefully the market likes it, could be a rare bright point on what I expect is a sh*tty day after the inflation numbers out of america.

[Rawz]

Gosh this company is amazing. Wish I held some shares

[Biscuit]

Such a fine company. I haven't looked at how it compares to consensus expectations but regardless, a fine company. Hopefully the market likes it, could be a rare bright point on what I expect is a sh*tty day after the inflation numbers out of america.

I can't see the sp dropping on such excellent results and outlook but of course the results were very well telegraphed in advance so there don't seem to be any surprises. The market is a law unto itself, but as I said before, its been looking undervalued recently.

[iceman]

Lost for words. I knew we were in for a good result but this is spectacular. I agree with MFT when they say "We remain satisfied with this financial result for the half-year."

55c interim dividend, up 83% :-).
I reckon any holder today will be reaping huge dividends from this company in 5-10 years time.

[Rawz]

What sort of P/E does this put them on?

[peat]

What sort of P/E does this put them on?

I make it 38 using the last two six month periods earnings

[mikelee]

what I don't understand is why people would sell for as low as $88.xx right up to the day before announcement, when a good result is expected? As of now, they're already $5 worse off!:confused:

[alokdhir]

what I don't understand is why people would sell for as low as $88.xx right up to the day before announcement, when a good result is expected? As of now, they're already $5 worse off!:confused:

For letting people like me top up ....never pay too much attention to SP ...DYOR and only buy and invest in stocks u believe in 100 %

Same will happen to FPH ...lol

[Biscuit]

what I don't understand is why people would sell for as low as $88.xx right up to the day before announcement, when a good result is expected? As of now, they're already $5 worse off!:confused:


That's the past now. The question now is whether to sell some at $94 or hold on?

[iceman]

what I don't understand is why people would sell for as low as $88.xx right up to the day before announcement, when a good result is expected? As of now, they're already $5 worse off!:confused:

What I don't understand is why any investor would sell this company full stop. It is well managed, firing on all cylinders, globally in a great industry with great growth prospects and increasing dividends in the foreseeable future.

[Biscuit]

What I don't understand is why any investor would sell this company full stop. It is well managed, firing on all cylinders, globally in a great industry with great growth prospects and increasing dividends in the foreseeable future.

Even MFT sp doesn't go up in a straight line though. I've bought a lot over the last few weeks, accumulating it to my largest holding, but I've also sold some, even at around $88 in the same period. It never hurts to bank a little profit along the way. Especially these days where buy and hold is likely to be increasingly a risky strategy.

[alokdhir]

What I don't understand is why any investor would sell this company full stop. It is well managed, firing on all cylinders, globally in a great industry with great growth prospects and increasing dividends in the foreseeable future.

If u remember I was a seller in MFT from $ 95-99.75 mark as I needed to reduce my weightage due to sharp run up ...but when it dropped back 15 % from top I rebalanced to equal weight 25 % of portfolio ...Its easy to manage if u have only four stocks in portfolio . Its called portfolio rebalancing as funds managers do ...why cant we do ...either increase cash weightage or switch to one of the other 3 ...And I am a very very long term investor in all MFT , FPH , KFL and NZG .

[Muse]

If u remember I was a seller in MFT from $ 95-99.75 mark as I needed to reduce my weightage due to sharp run up ...but when it dropped back 15 % from top I rebalanced to equal weight 25 % of portfolio ...Its easy to manage if u have only four stocks in portfolio . Its called portfolio rebalancing as funds managers do ...why cant we do ...either increase cash weightage or switch to one of the other 3 ...And I am a very very long term investor in all MFT , FPH , KFL and NZG .

Just makes you look like a trader for revenue account tax purposes. IRD comes sniffing and finds you selling a share and rebuying it lower sets off alarm bells, notwithstanding your aim of portfolio management. No worries tho if you already pay tax on them gains. Have seen many get smacked by ird for this - totally unfairly in my opinion.

[BlackPeter]

What I don't understand is why any investor would sell this company full stop. It is well managed, firing on all cylinders, globally in a great industry with great growth prospects and increasing dividends in the foreseeable future.

Sometimes you have to and allow others to share the joy. MFT did grow well beyond my diversification rules in my portfolio (I bought an XL sized parcel in the mid 30íes last year) and I sold some of them above $95; Still holding an XXL-sized package and quite pleased with them ... or should I say "a quite satisfactory performer" :);

[mikelee]

Wow! mid 30's? I doubt that I can resist cashing in all at 100% or 200% return. :p Well done BP :)
From what I've read IRD appears to be more interested in High Net Worth Individuals, rather than people trading to make a few hundred or thousand dollars gain.

[Peitro]

“ We remain optimistic these levels of activity and growth will continue across our global network for the remainder of this financial year and into the next.“

Optimistic of 78% growth continuing? This is a phenomenal comment, especially considering the industry and size of the organisation. Quickly becoming a behemoth

[iceman]

“ We remain optimistic these levels of activity and growth will continue across our global network for the remainder of this financial year and into the next.“

Optimistic of 78% growth continuing? This is a phenomenal comment, especially considering the industry and size of the organisation. Quickly becoming a behemoth

Absolutely correct. I find the USA division's performance the most exciting and could grow very substantially.

[winner69]

Share price up a lot yesterday

Don’t forget you generally get the real action the day after an announcement. Instos take a while to catch on.

So another boomer day today

[Muse]

Share price up a lot yesterday

Don’t forget you generally get the real action the day after an announcement. Instos take a while to catch on.

So another boomer day today

Jarden retained its 97 SP target. Craigs coming out this am too

[winner69]

Jarden retained its 97 SP target. Craigs coming out this am too

Way guru Lister was espousing on about MFT yesterday maybe their analysts will put up a number over 100 bucks

Checked in teh bottom drawer this morning .... the ones I got in the mid twenties are still there (not an XXXL parcel like Peters sadly) .... does that make me a long term holder

[Biscuit]

......Checked in teh bottom drawer this morning .... the ones I got in the mid twenties are still there (not an XXXL parcel like Peters sadly) .... does that make me a long term holder

Well, bright-line test for property is ten years.... Mid twenties makes your holding about 4-5 years old, so no you are clearly still just a trader. Come back in another 5 years and we might give you the benefit of the doubt.

From 20 bucks to (almost certainly) 100 bucks in five years, that's trucking eh?

[Muse]

Craigs new TP
$95.80

[alokdhir]

These TP of MFT were for calendar 2021 , what about 2022 targets ?

[Muse]

both of the above broker target prices are 12 month target prices, not current spot prices. Sometimes broker do provide their spot valuation sometimes they dont. However it can be worked out - target prices are the spot valuation rolled forward at the cost of equity less forecast dividends to be paid over that period.

[Rawz]

MFT probably do a FPH and be flat for a year

[Muse]

MFT probably do a FPH and be flat for a year

Aye perhaps. Mft benefit from high freight rates and i struggle to see how earnings from that can be maintainable but for a few years. They are dramatically building their network which could offset falling freight rates but they have a lot of capex to spend doing that which weighs on cashflows (and dcf valuations). Brokers are often using blended dcf and compco multiples in their TPs with the dcf implied value way lower than compco values because of that capex.

Happy holder if not a buyer.

[Biscuit]

Aye perhaps. Mft benefit from high freight rates and i struggle to see how earnings from that can be maintainable but for a few years. They are dramatically building their network which could offset falling freight rates but they have a lot of capex to spend doing that which weighs on cashflows (and dcf valuations). Brokers are often using blended dcf and compco multiples in their TPs with the dcf implied value way lower than compco values because of that capex.

Happy holder if not a buyer.

Cashflows are being put under pressure in the short term as MFT use this set of circumstances to grow their business. But ultimately that should lead to much greater cashflow (hopefully) and therefore higher (current) dcf valuations, assuming analysts have any real grasp of future cashflow.

[Muse]

Cashflows are being put under pressure in the short term as MFT use this set of circumstances to grow their business. But ultimately that should lead to much greater cashflow (hopefully) and therefore higher (current) dcf valuations, assuming analysts have any real grasp of future cashflow.

For sure. Just making the point that increased earnings coming from the up & coming increased branch network wont (for a time) produce as much fcf as the earnings coming from increased freight rates (which are broadly straight to the fcf line). Its the right thing to do none the less and after the capex buldge is over fcfs improve and so in theory should mft’s equity value.

[Biscuit]

That's the past now. The question now is whether to sell some at $94 or hold on?


Back down to $91 today, so would have been a good sell at $94 yesterday.

[nztx]

Back down to $91 today, so would have been a good sell at $94 yesterday.



the bounce didn't last long - did it ? ;)

mind you - many NZX listings have been retreating lately ..

[Biscuit]

the bounce didn't last long - did it ? ;)

mind you - many NZX listings have been retreating lately ..

I'm thinking the easy days, post GFC, of just buying and holding good companies/property, are coming to an end. The cycle is turning. It makes sense to me to shift strategy somewhat to taking profits when the market hands them to you and make the most of the volatility.

[iceman]

I'm thinking the easy days, post GFC, of just buying and holding good companies/property, are coming to an end. The cycle is turning. It makes sense to me to shift strategy somewhat to taking profits when the market hands them to you and make the most of the volatility.

Agree the "easy days" over the last few years are coming to an end but good companies with a proven track record, such as MFT, will definitely be a good chunk of my portfolio going forward. I am not into trading so obviously different to your strategy. We all have different strategies, different goals and different stages of life, so each to their own :-)
MFT fits my goals nicely.

[Biscuit]

Agree the "easy days" over the last few years are coming to an end but good companies with a proven track record, such as MFT, will definitely be a good chunk of my portfolio going forward. I am not into trading so obviously different to your strategy. We all have different strategies, different goals and different stages of life, so each to their own :-)
MFT fits my goals nicely.

Yes, I also mainly am a long term holder and I think MFT have a great future. I've put my long term holds (almost everything) into a separate trust account and am now using my personal account as a trading account, something I haven't done before.

[Biscuit]

A.....We all have different strategies, different goals and different stages of life, so each to their own :-)
.....


That's also very true. I've just "retired" so I have a bit more time to focus on the sharemarket and I am finding that I actually quite enjoy trading and applying a bit of technical analysis :eek2:.

[Muse]

Agree the "easy days" over the last few years are coming to an end but good companies with a proven track record, such as MFT, will definitely be a good chunk of my portfolio going forward. I am not into trading so obviously different to your strategy. We all have different strategies, different goals and different stages of life, so each to their own :-)
MFT fits my goals nicely.

I couldnt be a happier with this as a long term hold. I love the management team, I love how the business is just going for it growing its network, and how diversified it is. Even if some future returns have been pulled forward. Just read some of the first comments from 2004 on this thread in terms of where it was and how far it has come.

[Biscuit]

...... Just read some of the first comments from 2004 on this thread .......


Yeah mon, I just wonder whatever happened to Bob Marley.... must have lost interest in NZX.

[Biscuit]

Here is what I see when I look at MFT. I have marked nothing at all on the chart so as not to influence anyone. What do you think?

[u]Short-term </u>:- In a downtrend, after a Double Top (Bearish) SELL.

[u]Medium-term </u>:- Just ending an uptrend. SELL.

[u]Long-term </u>:- At the upper margin of a large and ongoing Trading Range. SELL.

What we have here is a superb medium-term trading stock. Fullstop!

http://home.ripway.com/2004-7/148483/MFT001.gif

Here is the legendary Phaedrus's take on MFT back in 2004. He might have been better to buy and hold on to a few!!

[Muse]

Here is the legendary Phaedrus's take on MFT back in 2004. He might have been better to buy and hold on to a few!!

Nothing like looking at long term growth to make you put down the charts

[Biscuit]

Nothing like looking at long term growth to make you put down the charts

For sure there is no replacement for long term growth. But trading the highs and lows along the way is a good complementary strategy IMO.

[couta1]

That's also very true. I've just "retired" so I have a bit more time to focus on the sharemarket and I am finding that I actually quite enjoy trading and applying a bit of technical analysis :eek2:. Investing is like a Flat White whilst trading is like a Double Expresso.

[kiora]

Here is the legendary Phaedrus's take on MFT back in 2004. He might have been better to buy and hold on to a few!!

He was a legend

MFT can easily be paralysis by analysis.
Same as the top hand full of NZX stocks.
But who knows whether the next 10 years will bring the same for these nuggets

[winner69]

I make it 38 using the last two six month periods earnings

Second half generally more profitable than first half so FY profit of $330m on cards

That puts MFT on a forward looking PE less than 30

Still cheap as eh

[Shareguy]

I think so . Quality is worth paying for. Added some more yesterday.

[Rawz]

Second half generally more profitable than first half so FY profit of $330m on cards

That puts MFT on a forward looking PE less than 30

Still cheap as eh

Can they repeat it thou? Are theses numbers the new normal or will profits fall back in line with their historical trend once the global supply chain is rectified?

[dobby41]

Investing is like a Flat White whilst trading is like a Double Expresso.

My Flat Whites are made with a Double Espresso (no ex about it) so the best of both worlds. :t_up:

[alokdhir]

Can they repeat it thou? Are theses numbers the new normal or will profits fall back in line with their historical trend once the global supply chain is rectified?

Keep in mind they are still a growing company ...so if margins fall after this supply chain issues are resolved in next 1-3 years then still they will be having much higher profits because of increased market share and increased areas of operations etc

So their long term SP increase rate of around 30% yoy will still be ok .

Calendar 21 started @ 70 ...so $ 91 is normal increase ....Next year should be TP of $ 118 ...IMO

[winner69]

Can they repeat it thou? Are theses numbers the new normal or will profits fall back in line with their historical trend once the global supply chain is rectified?

Unlike you rawz to be a bit bearish

What historical trend trend could they revert to -- from chart below -- pre 2018 or 2019/2021?

[alokdhir]

MFT consensus target raised ...average target price of MFT is $ 104.15 ...with high of $ 127 and low of $ 95 ....so overall it will still do satisfactory for another year or so ...Surely a hold if not a buy !!

[nztx]

MFT consensus target raised ...average target price of MFT is $ 104.15 ...with high of $ 127 and low of $ 95 ....so overall it will still do satisfactory for another year or so ...Surely a hold if not a buy !!


What ? - no multibagger(s) here ? ;)

Maybe they need a share split to help things along ? :)

can never have enough new boys & girls feeling that the price for a piece of the pie is more within their means ;)

[mikelee]

yeah, I used to balked at paying over $20 a share for banks, so never imagined that I'd one day pay almost 5 times that to invest in a freight company :D

[alokdhir]

$ 3.30 EPS for $ 100 SP is pretty fine on valuations ....but if done stock spilt of 10 to 1 then it can be SP of $ 12 easily ...maybe they will consider it after achieving their $ 100 goal. IMHO

[iceman]

Now we know why Plested sold a few back in June https://www.oneroof.co.nz/news/40527
Well deserved.

[maclir]

Now we know why Plested sold a few back in June https://www.oneroof.co.nz/news/40527
Well deserved.

The property had been earmarked for development but Plested told Gulf News (https://www.waihekegulfnews.co.nz/rich-lister-buys-one-of-the-most-beautiful-properties-on-earth/) that he intended to protect the land.
“I just think it’s one of most beautiful properties on earth. It’s very special, and we would like to leave it very much in its natural state,” he said.
Plested has been a vocal critic of plans to develop a marina on the island (https://www.nzherald.co.nz/business/mainfreight-founder-bruce-plested-battling-waiheke-island-marina-development/BLM4LORE7WYVXKLGARVC2R4XUY/) and has overseen the restoration of native bush at his property in Pie Melon Bay.

[maclir]

If you're interested in the detail of the company, not the financial focus but on the ground operations, there's a link to the latest in house magazine here

https://www.mainfreight.com/en-nz/mainfreight-team-review-december-2021

[mikelee]

Though the SP was finally going to break the $95 barrier this week, but guess not likely to happen even by year end. ;)

[Rawz]

MFT will probably do what FPH did after their big run up. Trade in a range for a good 12 months. Maybe $88 to $95 til end of next year

[alokdhir]

https://www.newshub.co.nz/home/new-zealand/2021/12/mainfreight-investigation-reveals-logbook-work-time-breaches.html

Reason for recent selling ...

[Biscuit]

https://www.newshub.co.nz/home/new-zealand/2021/12/mainfreight-investigation-reveals-logbook-work-time-breaches.html

Reason for recent selling ...

Hard to see any real implications for MFT, no further action being taken.

[BlackPeter]

https://www.newshub.co.nz/home/new-zealand/2021/12/mainfreight-investigation-reveals-logbook-work-time-breaches.html

Reason for recent selling ...

Hmm - yes, does not quite fit into Mainfreights story of a caring team, doesn't it? Still - sounds they rectified the problem already and appears the claims are anyway a bit overblown ...

MFT SP had a stellar rise since since Covid minibear ... and I don't see a break of the uptrend - do you?

13328

[Bjauck]

https://www.newshub.co.nz/home/new-zealand/2021/12/mainfreight-investigation-reveals-logbook-work-time-breaches.html

Reason for recent selling ...

It seems to stem from the cost (& admin) saving in NZ (from the point of view from the employer/business owner) of switching from employees to "independent" contractors. Contractors have the incentive to work long hours and save costs with less oversight from the big company with the resources to check. I just hope that road safety is not collateral damage. I doubt that this is an issue confined to MFT.

Interesting point from the article that big customers can of course squeeze a good price - so the pressure goes onto the "independent" contractor driver.

Disc: Holder

[alokdhir]

Hmm - yes, does not quite fit into Mainfreights story of a caring team, doesn't it? Still - sounds they rectified the problem already and appears the claims are anyway a bit overblown ...

MFT SP had a stellar rise since since Covid minibear ... and I don't see a break of the uptrend - do you?



13328

Uptrend will remain ...just a minor hiccups ...already sorted and " No further action required " result . Short term selling reasons can be plenty but uptrend will be maintained till we have a growing business ...after all SP follows EPS ...which is clearly still growing for next 2 years on expanded margins and expanded geographies / regions ...plenty of untapped growth opportunities ahead still .

Though I do think growth of SP will be lower ahead ...maybe 15% or so ...

Its done its regular consolidation of few months around 88-92 region so getting ready for Feb trading update ...$ 100 is just a question of time ..

[mikelee]

Sounds good to me, I'm in no hurry to sell. The dividend MFT pays more than makes up for what banks would pay. :t_up:

[Ggcc]

Sounds good to me, I'm in no hurry to sell. The dividend MFT pays more than makes up for what banks would pay. :t_up:
With inflation running away on us, don’t count your chickens before they hatch.

[iceman]

With inflation running away on us, don’t count your chickens before they hatch.

The transport inflation is the highest of all the inputs in to the inflation index. But MFT will pass those costs on to customers and ultimately consumers. Watch out exporters & importers.

[Shareguy]

I also think $100 not far off so I brought some more last week. The question is then, will they do a split.

[alokdhir]

I also think $100 not far off so I brought some more last week. The question is then, will they do a split.

If they want better valuations for their stock thus for their shareholders then they must think of doing it ...maybe reverse of what SKT did ...100 for 1 ...make it very affordable in the minds of retail investors ...it will zoom to 1.20 in no time ...lol

[mikelee]

Could someone please raise this at the next shareholder's meeting? :t_up:

[mikelee]

Got my first newsletter in the mail recently. Good to read about the many positive stories, including ongoing investment in the business. I like how MFT stays in touch with investors on top of the bi-annual financial update. :)

[Peitro]

Bit of a novel isn't it! Big leaps being made in global expansion - proving very powerful business enablers in the Covid world.

[alokdhir]

https://www.nzherald.co.nz/business/the-remarkable-rise-of-mainfreight-whats-driving-kiwi-companys-success/XAVYV2K3GXW73WCMSNMCWC4ZJM/

With such articles in the media ...I think a push towards $ 100 is imminent ....lol

[winner69]

I first bought Mainfreight shares decades ago after hearing our Supply Chain Manager telling the exec team that he had really screwed Mainfreight on freight rates and other services ...... two years in a row he said that ....... and I had to tell him in front of the exec team he better do better because Mainfreight keep reporting 'significantly improved margins in NZ'

So customers think they are screwing Mainfreight but Mainfreight boast higher margins - good reason to buy some eh

[Shareguy]

Good storey Winner69. Agree with you Alokdhir $100 coming soon. Then a share split 10/1.

[mikelee]

Hope it's not too late to top up at $90 today. :D

[Charlie]

'This period prior to Christmas is likely our biggest freight tonnage period in our history' from the newsletter .
Whats not like about this ,
They seem to care about their workers

Five Things to Do Better in 2022
1. Always try to maintain a hopeful outlook. Nothing is better for your well-being than having hope.
2. Covid-19 restrictions have seen a large amount of bureaucracy placed upon us. Let’s make sure we don’t follow the same path. ( page 3 )

great stuff.
Merry Christmas to all ..

[Jonette]

Mainfreight appears to be facing headwinds this week. Apart from Omicron Covid and Interest rates, is anybody aware of any specific driver for MFT of the lower share price?

[mikelee]

I'm wondering the same. As long NZ only goes into "RED" but not locked down, it shouldn't affect freight movements too much.

[winner69]

I'm wondering the same. As long NZ only goes into "RED" but not locked down, it shouldn't affect freight movements too much.

....unless a lot of truck drivers get sick ...and like in Australia there's no forklift drivers to load the trucks

But current share price weakness possibly punters reducing exposure to highly valued stocks

[Sideshow Bob]

But current share price weakness possibly punters reducing exposure to highly valued stocks

Or just had a stellar run with MFT and taking a little off the table.....

I've got my forklift license....no worries here!! :scared::t_up::cool:

[777]

Floating down with the rest of the markets, both domestically and internationally.

[winner69]

Floating down with the rest of the markets, both domestically and internationally.

What'll happen to MFT (and othersin NZ) if US markets fall be 50% as this guru suggests

Jeremy Grantham Doubles Down on Crash Call, Says Selloff Has Started

[777]

What'll happen to MFT (and othersin NZ) if US markets fall be 50% as this guru suggests

Jeremy Grantham Doubles Down on Crash Call, Says Selloff Has Started

Do you really think I need to explain that to you?

[nztx]

What'll happen to MFT (and othersin NZ) if US markets fall be 50% as this guru suggests

Jeremy Grantham Doubles Down on Crash Call, Says Selloff Has Started


Well as I've said before Winner -- I departed many NZX holdings in early November 21
sensing this overall downward spiral could occur (abeit later than the March 2020 dip
on similar market sentiments)

$87 buckses now - wake me up when we get to the mid $50's again - I may have
a spare empty barrow to fill :)

Mind you if & when that occurs, it could be a buyer's paradise with lots of choices again :)

.. but by then Robertson will probably have bankrupted the country, taxes will have to be doubled
to fill the gap & a humungous CGT (under a different name) possibly invented
to scrape the insides of any barrel in sight and Calamity Jane may be spinning 24/7 to
save face with the despairing Omacron inflicted masses threatening to revolt & support the
Bryl Cream Bikey clan with it's leader fresh out of clink .. ;)

[Jonette]

The prediction is likely to be for click bait. However some correction is going to occur, especially to those stocks making nothing or very little.
the trick will be to find the stocks that have pricing power, market moats and dividends that will ultimately pay more then inflation. Then of course the question is how big will inflation be, my prediction, based on the property market bubble, is that we will see 10%, but the banks, who are always wrong due to never accepting that change can happen, are forecasting 5%.

MFT has
a moat - vertical integration in NZ,
pricing power for now - strong traffic on my truckometer stats shows demand remains very high
Tiny dividend, which is why the stock price is dropping now. That lack of dividend while profits are high is allowing high growth with investment in storage and trucks while everyone else is backing off, great tactic.

on that basis I am buying in small chunks almost daily

[macduffy]

I'd agree with that, Jonette. Except that I'd wait a while until there's a floor under the declining shareprice.

[alokdhir]

You can never go wrong with MFT ...if buying as investor then any time is good time to be buying MFT .

Yes short term sentiment may bring to 85 or maybe even 80 ...but not much downside for a strong growth stock at the moment ...more so after it has consolidated for almost 5 months after hitting 99.78 in August !!!

[Jonette]

I managed to buy regularly for a few days, hitting a great price each day, although a little lower all week. I noticed that volume has been small all week, with a lot of buyers and sellers with just a few shares (1-10) so I guess Sharesies is driving the market at present

[winner69]

Will MFT be a buy at $75 .....

[bull....]

Will MFT be a buy at $75 .....

with a p/e of 35 currently. hope they can grow gangbusters in a peak gdp world

[Beagle]

Agreed PE is 35 after recent declines and seems very fulsome in the circumstances. What happens to gross revenues when shipping rates inevitably normalise ? Maybe its not the one way bet many seem to think it is ?
Clear break down through the 100 day MA and just broken down through the 180 day MA, 200 probably very shortly. End of the current upward trend for a while ?

[Sideshow Bob]

Agreed PE is 35 after recent declines and seems very fulsome in the circumstances. What happens to gross revenues when shipping rates inevitably normalise ? Maybe its not the one way bet many seem to think it is ?
Clear break down through the 100 day MA and just broken down through the 180 day MA, 200 probably very shortly. End of the current upward trend for a while ?

MFT are one of those quality, blue-chip companies that have always traded at high PE ratio's - that have often confounded many, including myself and always seem "too expensive". Just like EBO and FPH. But generally, they have high-quality management, and a track record of delivering (to shareholders, as well as their freight....:p).

However life is alot about timing. Great company, great to hold, but the time to buy isn't now.

Keeping the powder dry.......:sleep:

[MauroNZ]

Agreed PE is 35 after recent declines and seems very fulsome in the circumstances. What happens to gross revenues when shipping rates inevitably normalise ? Maybe its not the one way bet many seem to think it is ?
Clear break down through the 100 day MA and just broken down through the 180 day MA, 200 probably very shortly. End of the current upward trend for a while ?

Hey Beagle, Happy New Year, when you look at the TA indicators like the mentioned ones what time frame do you use? one year maybe?. Thanks.

[Pricey]

Might still seem expensive, but MFT is in a different class of its own when compared to other high PE stocks - shareholders are long term holders and I am always tempted to buy any dip.

- 27.9% average p.a. return over the last ten years
- 2021 Net Profit up 27%
- 2022 HY Net Profit up 79%
- December 2021: Managing Director buys $900,000 worth of shares at $90.
- Transport & Logistics in high demand
- Trading update due February 2022 .....

[alokdhir]

Might still seem expensive, but MFT is in a different class of its own when compared to other high PE stocks - shareholders are long term holders and I am always tempted to buy any dip.

- 27.9% average p.a. return over the last ten years
- 2021 Net Profit up 27%
- 2022 HY Net Profit up 79%
- December 2021: Managing Director buys $900,000 worth of shares at $90.
- Transport & Logistics in high demand
- Trading update due February 2022 .....

Fully agree and endorse buying all dips ...82-84 should be great price to add ...doing so on every down day . Its the most consistent of NZX stock

[iceman]

Might still seem expensive, but MFT is in a different class of its own when compared to other high PE stocks - shareholders are long term holders and I am always tempted to buy any dip.

- 27.9% average p.a. return over the last ten years
- 2021 Net Profit up 27%
- 2022 HY Net Profit up 79%
- December 2021: Managing Director buys $900,000 worth of shares at $90.
- Transport & Logistics in high demand
- Trading update due February 2022 .....

Well said and totally agree. Just added a few at $84.

[Beagle]

Hey Beagle, Happy New Year, when you look at the TA indicators like the mentioned ones what time frame do you use? one year maybe?. Thanks.

Hi mate I just normally bring up a 2 year chart. Very impressive long term performance of MFT does not in any way whatsoever guarantee future long term outperformance as others imply. My 2 cents.

[iceman]

Hi mate I just normally bring up a 2 year chart. Very impressive long term performance of MFT does not in any way whatsoever guarantee future long term outperformance as others imply. My 2 cents.

Mate I think you know better than to suggest others are "guaranteeing" anything. This is the sharemarket we are talking about ! NOTHING is guaranteed except the unexpected.

[Beagle]

Mate I think you know better than to suggest others are "guaranteeing" anything. This is the sharemarket we are talking about ! NOTHING is guaranteed except the unexpected.

Fair enough, didn't mean to besmirch anyone. What I guess I am getting at (and you can probably answer this quite easily with your experience with the company) is what happens to MFT gross revenue when shipping costs normalise ?

Surely they are making a lot more revenue when it costs $40,000 per shipping container they handle for clients than when it costs $2,000 ?

[Peitro]

Trading update due out in the next 2/3 weeks, I think we could go close to half billion NPBT this year.

Looking forward to some satisfactory news.

[mikelee]

Yes, the extra shipping cost will just have to be passed on to customers sooner or later, so regardless of the current logistic bottleneck & Omicron I expect the business to continue to do well as the world slowly opens up. :cool:

[Peitro]

Satisfactory announcement

[maclir]

Satisfactory announcement

I believe Peitro is referring to this http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFT/386696/363902.pdf

And indeed it is, but a question of real interest goes to the numbers behind this statement "freight rates remain elevated."

DISC: Holder

[BlackPeter]

Satisfactory announcement

Indeed.

Revenue up by 45%, PBT up by 85% ... and all compared to last year (which in a way was already quite satisfactory as well).

But obviously - the cut off to "very satisfactory" would be 100% - i.e. they just need to work a bit harder :):

[iceman]

The main words seem to be "elevated" and "satisfactory" and reading the report, I think those words describe yet another spectacular period quite nicely.
The staggering growth continues and for interest, we are seeing:
# new warehouses being built in Auckland, Hamilton, Perth, Melbourne, Adelaide, Sydney, on the lookout for a position in Brisbane, new branch starting in Jakarta, new larger sites in LA and Newark.

Finally the new branches in Dallas, LeHigh Valley(Pennsylvania) and Toronto are already performing satisfactorily. Not much to complain about in this update.

[Peitro]

Can one of you more educated please help me with the PE ratio (assumed $90 sp)

Annualised npbt = 446 (assumed 10 months reported today)
Npat 321
EPS 3.2
PE 28.2

[winner69]

Can one of you more educated please help me with the PE ratio (assumed $90 sp)

Annualised npbt = 446 (assumed 10 months reported today)
Npat 321
EPS 3.2
PE 28.2

Seems a good estimate

Pretty cheap eh at the moment

[Biscuit]

..... but a question of real interest goes to the numbers behind this statement "freight rates remain elevated."

DISC: Holder

Elevated freight rates and supply constraints go hand in hand and lead to inflation and higher interest rates. People worry about higher interest rates and the share price goes down. MFT are making truck-loads of money off supply constraints but that might not last because eventually the supply constraint problem will be solved, so, something else to worry about? People worry too much. They are making truck-loads of money, all is good.

[iceman]

Elevated freight rates and supply constraints go hand in hand and lead to inflation and higher interest rates. People worry about higher interest rates and the share price goes down. MFT are making truck-loads of money off supply constraints but that might not last because eventually the supply constraint problem will be solved, so, something else to worry about? People worry too much. They are making truck-loads of money, all is good.

They are also using a lot of that truckload to grow & diversify the business. It is worthy to remember that MFT was doing very nicely before COVID & the current supply issues, both making very good profits and growing fast.
They’re just making even more now

[Biscuit]

They are also using a lot of that truckload to grow & diversify the business. It is worthy to remember that MFT was doing very nicely before COVID & the current supply issues, both making very good profits and growing fast.
They’re just making even more now

Yes, and they did very well investing in staff when covid first hit and everyone else was retrenching. That looks a very smart move now.

[alokdhir]

Seems a good estimate

Pretty cheap eh at the moment

Your best case EPS of 3.3 very possible now ? Next year can they do 3.65 or more is the big question ? Can they as per u ?

If answer is Yes then stock is a big buy with 12 months target of $ 110 - 120 !!!

[winner69]

Media market update -.

Mainfreight retreated 0.8% to $89.26 after equity analysts trimmed their valuations – partly due to higher discount rates – and noted the company was unlikely to keep growing at the speed it has during recent times.

[Peitro]

$89 is about right with the assumption of zero growth going forward.

[Muse]

Honestly - assuming MFT can generate NPAT of $325m in FY22 - I'd be gobsmacked if it could retain that figure and not go backwards the next few years. I'm not selling as a long term investor - I think its an incredible company smartly building out its network - but my best case scenario is flat for many years. My more realistic view is it declines and 4 or 5 years to get back to FY22. As a bonafide capital account investor my commercial rational for holding the company hasn't changed. Tax paying traders - well - I'd probably sell too.

[BlackPeter]

Mainfreight - one of these blue chips where everybody always seems to agree that they are too expensive - just the market has a different view. Always wondered how it is possible that the market is disagreeing with the experts which are supposed to form the market - but maybe the experts who form the market are not the experts who talk about the market? :confused:

I bought into Mainfreight at peak Covid (well, in 2020 this is) - and my only regrets to date are that I didn't buy more of them at that stage when they've been on special. You see - these bl**dy diversification policies. Always trust your favourite broker when they tell you that transport companies do well towards the end of a financial crisis.

Reduced slightly above $90 to stick with my diversification policies (maybe not so bad) ... but still kept a significant parcel.

Question is - are they really too dear and should I sell?

Looking into the fundamentals:

forward PE (3 years) is 29.4. Not cheap.
forward earnings CAGR is 16.5. Well, maybe 29.4 is cheap after all?

Grahams formula returns a value of $122.50 ... but sure, if we modify the parameters according to beagle ... it is only $78.25;

Sigh. Share still looks reasonably priced, but not cheap. So - how did they do after the last really big crisis (the GFC)?

13497

Actually - they went in 4 years after the end of the GFC in early 2009 from $3.30 to $10.50. Not too bad after an economic crisis, isn't it? 35% p.a. appreciation.

Maybe a reason to keep the shares?

Company is well managed and they use the current profits to improve their presence and network all over the globe, as any prudent business man would do.

I think they still have lots of runway left.

I shall keep them (and manage them within my diversification policies).

I think its a company too good to not be part of a well diversified portfolio.

[RupertBear]

Mainfreight - one of these blue chips where everybody always seems to agree that they are too expensive - just the market has a different view. Always wondered how it is possible that the market is disagreeing with the experts which are supposed to form the market - but maybe the experts who form the market are not the experts who talk about the market? :confused:

I bought into Mainfreight at peak Covid (well, in 2020 this is) - and my only regrets to date are that I didn't buy more of them at that stage when they've been on special. You see - these bl**dy diversification policies. Always trust your favourite broker when they tell you that transport companies do well towards the end of a financial crisis.

Reduced slightly above $90 to stick with my diversification policies (maybe not so bad) ... but still kept a significant parcel.

Question is - are they really too dear and should I sell?

Looking into the fundamentals:

forward PE (3 years) is 29.4. Not cheap.
forward earnings CAGR is 16.5. Well, maybe 29.4 is cheap after all?

Grahams formula returns a value of $122.50 ... but sure, if we modify the parameters according to beagle ... it is only $78.25;

Sigh. Share still looks reasonably priced, but not cheap. So - how did they do after the last really big crisis (the GFC)?

13497

Actually - they went in 4 years after the end of the GFC in early 2009 from $3.30 to $10.50. Not too bad after an economic crisis, isn't it? 35% p.a. appreciation.

Maybe a reason to keep the shares?

Company is well managed and they use the current profits to improve their presence and network all over the globe, as any prudent business man would do.

I think they still have lots of runway left.

I shall keep them (and manage them within my diversification policies).

I think its a company too good to not be part of a well diversified portfolio.

Great post thanks BP

[alokdhir]

Mainfreight - one of these blue chips where everybody always seems to agree that they are too expensive - just the market has a different view. Always wondered how it is possible that the market is disagreeing with the experts which are supposed to form the market - but maybe the experts who form the market are not the experts who talk about the market? :confused:

I bought into Mainfreight at peak Covid (well, in 2020 this is) - and my only regrets to date are that I didn't buy more of them at that stage when they've been on special. You see - these bl**dy diversification policies. Always trust your favourite broker when they tell you that transport companies do well towards the end of a financial crisis.

Reduced slightly above $90 to stick with my diversification policies (maybe not so bad) ... but still kept a significant parcel.

Question is - are they really too dear and should I sell?

Looking into the fundamentals:

forward PE (3 years) is 29.4. Not cheap.
forward earnings CAGR is 16.5. Well, maybe 29.4 is cheap after all?

Grahams formula returns a value of $122.50 ... but sure, if we modify the parameters according to beagle ... it is only $78.25;

Sigh. Share still looks reasonably priced, but not cheap. So - how did they do after the last really big crisis (the GFC)?

13497

Actually - they went in 4 years after the end of the GFC in early 2009 from $3.30 to $10.50. Not too bad after an economic crisis, isn't it? 35% p.a. appreciation.

Maybe a reason to keep the shares?

Company is well managed and they use the current profits to improve their presence and network all over the globe, as any prudent business man would do.

I think they still have lots of runway left.

I shall keep them (and manage them within my diversification policies).

I think its a company too good to not be part of a well diversified portfolio.

I have learnt from holding them since 2010 ...longer u keep them happier u r . U r very lucky to buy so cheap during Covid selling ....now keep them forever should be theme ...after all u cant loose at all ...its only WIN WIN for u . ....One way to go around diversification compulsions of a good stock is to value them at buy prices not market values ...that lets u hold blue chips longer even if they had a great run recently ...:t_up:

[Muse]

Mainfreight - one of these blue chips where everybody always seems to agree that they are too expensive - just the market has a different view. Always wondered how it is possible that the market is disagreeing with the experts which are supposed to form the market - but maybe the experts who form the market are not the experts who talk about the market? :confused:

I bought into Mainfreight at peak Covid (well, in 2020 this is) - and my only regrets to date are that I didn't buy more of them at that stage when they've been on special. You see - these bl**dy diversification policies. Always trust your favourite broker when they tell you that transport companies do well towards the end of a financial crisis.

Reduced slightly above $90 to stick with my diversification policies (maybe not so bad) ... but still kept a significant parcel.

Question is - are they really too dear and should I sell?

Looking into the fundamentals:

forward PE (3 years) is 29.4. Not cheap.
forward earnings CAGR is 16.5. Well, maybe 29.4 is cheap after all?

Grahams formula returns a value of $122.50 ... but sure, if we modify the parameters according to beagle ... it is only $78.25;

Sigh. Share still looks reasonably priced, but not cheap. So - how did they do after the last really big crisis (the GFC)?

13497

Actually - they went in 4 years after the end of the GFC in early 2009 from $3.30 to $10.50. Not too bad after an economic crisis, isn't it? 35% p.a. appreciation.

Maybe a reason to keep the shares?

Company is well managed and they use the current profits to improve their presence and network all over the globe, as any prudent business man would do.

I think they still have lots of runway left.

I shall keep them (and manage them within my diversification policies).

I think its a company too good to not be part of a well diversified portfolio.

Do as you like BlackPeter - obviously this forum isn't for advice but for mulling over the pro's & cons and tailwinds & headwinds of the listed market.

the 'experts' you quasy deride as being out of touch with the market are just mindful of the elephant in the room - the freight rate boom that has directly contributed (in large part) to npat doubling in 2 years.

Ask yourself the following questions and be guided by your own perspectives
* will freight costs remain high forever or if they fall by how much and over what length of time
* mft doing a hell of a lot of good stuff in building out their footprint - how much of the increase in earnings is due to that and not the spike in freight rates and demand? if they continue to grow their footprint can they offset a potential decline in freight rates?
* how will rising interest rates impact sentiment around high PE companies
* how long is your horizon
* what is your commercial rational for holding them

I wouldn't be surprised if they beat consensus NPAT of 325 this year so there could be more good news to come - does that influence your perspective or is it moot in the longer term?

[Beagle]

Do as you like BlackPeter - obviously this forum isn't for advice but for mulling over the pro's & cons and tailwinds & headwinds of the listed market.

the 'experts' you quasy deride as being out of touch with the market are just mindful of the elephant in the room - the freight rate boom that has directly contributed (in large part) to npat doubling in 2 years.

Ask yourself the following questions and be guided by your own perspectives
* will freight costs remain high forever or if they fall by how much and over what length of time
* mft doing a hell of a lot of good stuff in building out their footprint - how much of the increase in earnings is due to that and not the spike in freight rates and demand? if they continue to grow their footprint can they offset a potential decline in freight rates?
* how will rising interest rates impact sentiment around high PE companies
* how long is your horizon
* what is your commercial rational for holding them

I wouldn't be surprised if they beat consensus NPAT of 325 this year so there could be more good news to come - does that influence your perspective or is it moot in the longer term?

Thanks FM

I think people should be mindful that their net profit has more than tripled in the Asian region and quadrupled in America.
Its not that hard to understand that when the price per container falls back from the exceptionally elevated level's, (I understand for example it hit $40,000 per container at one point between China and N.Z.) to more normal level's of $2-3,000 MFT's commissions and fees will take a commensurate hit.

I feel sorry for MFT's customers paying these usurious costs, price gouging anyone ?

If BP and some others want to ignore the elephant in the room then all I will say is I wish them the best of luck with that. Its not for me.

[alokdhir]

Best judgement about holders and non holding experts will come with time ...Market and SP will be the best judge ...also long term investors believe in company and management not current situations ....its management's job to fulfil their brief ..ie to grow the company . If freight rates will get normalised then interest rates will also get controlled as inflation will be managed better ...so overall situation will remain almost similar for management to do their job well .

[iceman]

MFT has nothing to do with the extra ordinary high shipping rates around the World at the moment. The large international shipping companies are the companies charging these rates.
There is no evidence to support claims about MFT price gouging. Importers & exporters in NZ as well as their thousands of customers overseas, have many options and competitors to the services MFT supplies and would & could easily move to a competitor if price gouging was happening by MFT.

There is little question that these high prices are unsustainable long term and need to come down and are likely to do so in a couple of years. However I don't think it is realistic to expect us to ever see containers costs like we had in 2018-2019, particularly given the high inflation period we are in and will be for quite a while yet. It's simply not going to happen.

[RupertBear]

Do as you like BlackPeter - obviously this forum isn't for advice but for mulling over the pro's & cons and tailwinds & headwinds of the listed market.

the 'experts' you quasy deride as being out of touch with the market are just mindful of the elephant in the room - the freight rate boom that has directly contributed (in large part) to npat doubling in 2 years.

Ask yourself the following questions and be guided by your own perspectives
* will freight costs remain high forever or if they fall by how much and over what length of time
* mft doing a hell of a lot of good stuff in building out their footprint - how much of the increase in earnings is due to that and not the spike in freight rates and demand? if they continue to grow their footprint can they offset a potential decline in freight rates?
* how will rising interest rates impact sentiment around high PE companies
* how long is your horizon
* what is your commercial rational for holding them

I wouldn't be surprised if they beat consensus NPAT of 325 this year so there could be more good news to come - does that influence your perspective or is it moot in the longer term?

Always value your posts FM :)

I didnt take BP’s comment about “experts” quite as disparagingly as you have. But I certainly appreciate your thoughts on the “elephant in the room”.

My situation is similar to BP’s in that I bought into MFT @ $29 during the 2020 Covid sale. This is a long term hold for me and although I wouldn't consider buying at these levels I would regard any significant drop as a buying opportunity.

So happy holder at this point in time :)

[alokdhir]

https://www.stuff.co.nz/business/127589247/mainfreight-heading-for-impressive-record-profit-on-pandemic-demand

[winner69]

https://www.stuff.co.nz/business/127589247/mainfreight-heading-for-impressive-record-profit-on-pandemic-demand

Nice story to read on ****ty weather wise Sunday

I don’t agree that ‘but Mainfreight remains the most expensive stock on the ’NZX’ bit …..PE of 24 seems pretty cheap to me. Whoever said that must be expecting Mainfreight profits to halve next year;)

[percy]

Nice story to read on ****ty weather wise Sunday

I don’t agree that ‘but Mainfreight remains the most expensive stock on the ’NZX’ bit …..PE of 24 seems pretty cheap to me. Whoever said that must be expecting Mainfreight profits to halve next year;)

Direct Broking are showing MFT has a PE of 34.39.
Should they achieve a 80% growth in net profit, it means their PE ratio is less than half their growth rate giving a PEG ratio of just .429 .
1.00 is considered good.

[winner69]

Direct Broking are showing MFT has a PE of 34.39.
Should they achieve a 80% growth in net profit, it means their PE ratio is less than half their growth rate giving a PEG ratio of just .429 .
1.00 is considered good.

If you use expected earnings 340 (which 80% growth) you get forward looking PE of 25

Makes percy’s PEG 0.31 ……1 is considered good …….0,31 is considered well this is Mainfreight

[percy]

If you use expected earnings 340 (which 80% growth) you get forward looking PE of 25

Makes percy’s PEG 0.31 ……1 is considered good …….0,31 is considered well this is Mainfreight

Crikey,MFT look more compelling than HGH.!!
If it was not for HGH's great divie.?

[alokdhir]

Nice story to read on ****ty weather wise Sunday

I don’t agree that ‘but Mainfreight remains the most expensive stock on the ’NZX’ bit …..PE of 24 seems pretty cheap to me. Whoever said that must be expecting Mainfreight profits to halve next year;)

IMO in the context of the article ...expensive meant absolute dollar price ...most priced stock maybe they meant ...not expensive on P/E terms .

[nztx]

$105 SP on Monday ? ;)

[alokdhir]

$105 SP on Monday ? ;)

More likely by year end ...tomorrow maybe close to $ 80 ...

[nztx]

More likely by year end ...tomorrow maybe close to $ 80 ...



I was just kidding - still can't believe I didn't pick this one for the 2022 Competition :)

[Beagle]

Direct Broking are showing MFT has a PE of 34.39.
Should they achieve a 80% growth in net profit, it means their PE ratio is less than half their growth rate giving a PEG ratio of just .429 .
1.00 is considered good.

You think those Covid tailwinds will blow forever...

[alokdhir]

I was just kidding - still can't believe I didn't pick this one for the 2022 Competition :)

Not many did as they thought its no more gravy for them ...people not very optimistic of further growth after this year ...rather they think its eps will fall in FY 23 ...so not bullish ...its a difficult outcome to predict ...can go both ways ...IMO they may grow further 10% so SP can still reach 100-120 by year end

[nztx]

Not many did as they thought its no more gravy for them ...people not very optimistic of further growth after this year ...rather they think its eps will fall in FY 23 ...so not bullish ...its a difficult outcome to predict ...can go both ways ...IMO they may grow further 10% so SP can still reach 100-120 by year end

Very possible too - they have demonstrated resilience in the past couple of years admirably well and
still come up with a bumper basket :)

[percy]

You think those Covid tailwinds will blow forever...

When you think of MFT think of just food to start with.Then think of furniture,clothing,cars,beding,furniture,farm supplies.
Billions of dollars worth of meat,poultry,fruit and vegetables being delivered every day into the big cities of the world.Think London ,Paris,Berlin to start with.All delivered from farms,meat works,bakeries,by truck.
MFT .The world is their oyster.
Then ask yourself why do customers employ MFT,why do drivers and loaders want to work for MFT.
If you still can not understand MFT get the book Ready,Fire,Aim the Mainfreight story.by Keith Davies.

[winner69]

When you think of MFT think of just food to start with.Then think of furniture,clothing,cars,beding,furniture,farm supplies.
Billions of dollars worth of meat,poultry,fruit and vegetables being delivered every day into the big cities of the world.Think London ,Paris,Berlin to start with.All delivered from farms,meat works,bakeries,by truck.
MFT .The world is their oyster.
Then ask yourself why do customers employ MFT,why do drivers and loaders want to work for MFT.
If you still can not understand MFT get the book Ready,Fire,Aim the Mainfreight story.by Keith Davies.

No excuse for punters not to read that story percy ….for those who don’t know what a book is the Kindle version is less than 10 bucks

[winner69]

No excuse for punters not to read that story percy ….for those who don’t know what a book is the Kindle version is less than 10 bucks

And a free trail one could try the audio version ….no reading skills needed

https://www.audible.com.au/pd/Ready-Fire-Aim-Audiobook/B00FQJ7XHS

[Beagle]

When you think of MFT think of just food to start with.Then think of furniture,clothing,cars,beding,furniture,farm supplies.
Billions of dollars worth of meat,poultry,fruit and vegetables being delivered every day into the big cities of the world.Think London ,Paris,Berlin to start with.All delivered from farms,meat works,bakeries,by truck.
MFT .The world is their oyster.
Then ask yourself why do customers employ MFT,why do drivers and loaders want to work for MFT.
If you still can not understand MFT get the book Ready,Fire,Aim the Mainfreight story.by Keith Davies.

Even the best investment stories are only worth so much in a rapidly rising interest rate environment. Less than 18 months ago 10 year Govt stock was a fraction over 0.5%, now its 2.8% and could easily be over 4% in 18 months time. Future eps growth rate estimated at just 3% average for FY23 and FY24.
https://www.marketscreener.com/quote/stock/MAINFREIGHT-LIMITED-6492059/financials/
Shares appear to have formed a new downtrend since Sept. What does out friend KW say about owning shares in a downtrend ;)
Might take an interest in reading that when they start a new uptrend....at the moment I am absolutely fascinated by my Antie's book about the early days in Southland.

[jmsnz]

You think those Covid tailwinds will blow forever...

No they won't blow forever - it would clearly be dumb to think that they would.

What is more likely is that MFT management will continue for some time to execute better than most companies and as Percy points out MFT do have a degree of security of business given that stuff needs to move around the world regardless of COVID etc.

DISC:
I made my first MFT purchase in May 2010 at what many on this forum thought was a well over priced $6.50 that was simply not sustainable. Maybe now they are over priced - who knows?

[alokdhir]

MFT one can buy and hold at any time and u will be happy eventually ...Timing the market to perfection is not needed . Most cannot ...its the Best Buy and hold stock of NZ market ....only stock which is always delivering . MFT may have some more consolidation but just give it some time and one will be in the money .

[percy]

Even the best investment stories are only worth so much in a rapidly rising interest rate environment. Less than 18 months ago 10 year Govt stock was a fraction over 0.5%, now its 2.8% and could easily be over 4% in 18 months time. Future eps growth rate estimated at just 3% average for FY23 and FY24.
https://www.marketscreener.com/quote/stock/MAINFREIGHT-LIMITED-6492059/financials/
Shares appear to have formed a new downtrend since Sept. What does out friend KW say about owning shares in a downtrend ;)
Might take an interest in reading that when they start a new uptrend....at the moment I am absolutely fascinated by my Antie's book about the early days in Southland.

When you have finished Antie's book, and The Mainfreight Story, I think you will enjoy "Trillions" by Robin Wigglesworth.isbn.9780241422069
Chapter one cover Buffett's Bet,that an index fund would out perform any group of high flying hedge fund managers over a 10 year time frame.
Result.The Vanguard 500 Index Fund returned 125.8% over the decade.
The average of the Hedge Funds was 36.3%.

[iceman]

When you think of MFT think of just food to start with.Then think of furniture,clothing,cars,beding,furniture,farm supplies.
Billions of dollars worth of meat,poultry,fruit and vegetables being delivered every day into the big cities of the world.Think London ,Paris,Berlin to start with.All delivered from farms,meat works,bakeries,by truck.
MFT .The world is their oyster.
Then ask yourself why do customers employ MFT,why do drivers and loaders want to work for MFT.
If you still can not understand MFT get the book Ready,Fire,Aim the Mainfreight story.by Keith Davies.

A great post percy and hopefully a reminder to people that MFT is not a shipping company. They are a well managed, globally diversified logistics company. The business they are in is NOT about to slow anytime soon.

[CROESUS U.T.]

A great post percy and hopefully a reminder to people that MFT is not a shipping company. They are a well managed, globally diversified logistics company. The business they are in is NOT about to slow anytime soon.
Think you are more correct in that they are now a logistics company and in fact to the best of my knowledge do virtually none of the activities listed by Percy. They are a good company but their standards are slipping in my more recent dealings with them. e.g. overnight intercity and then almost 7 days to get the local delivery segment done, phone calls taking a long time to be answered, etc

[iceman]

Think you are more correct in that they are now a logistics company and in fact to the best of my knowledge do virtually none of the activities listed by Percy. They are a good company but their standards are slipping in my more recent dealings with them. e.g. overnight intercity and then almost 7 days to get the local delivery segment done, phone calls taking a long time to be answered, etc

I think percy was pointing out that all the things he mentioned, still need to be transported. MFT provides logistics services for all of that. Thanks for sharing your experience which is always interesting to hear direct. In my industry, we are having same sort of problems (and much worse) as you describe with delays and unreliability, but it is a Worldwide phenomenon.

[alokdhir]

https://www.nzherald.co.nz/business/affcos-quiet-export-shipping-crisis-fightback-moving-nz-inc-product-in-container-shipping-chaos/LZRJJ6KDDM3CDNMSAW4ZILI4KU/

This says at least 3 more years of this inflated freight rates ....so MFT has 2 more years to run if not more . Maybe its most value buy at current SP .

[Sideshow Bob]

https://www.nzherald.co.nz/business/affcos-quiet-export-shipping-crisis-fightback-moving-nz-inc-product-in-container-shipping-chaos/LZRJJ6KDDM3CDNMSAW4ZILI4KU/

This says at least 3 more years of this inflated freight rates ....so MFT has 2 more years to run if not more . Maybe its most value buy at current SP .

Expect that most of the sea/airfreight is more margin business for MFT from freight forwarding, rather than the super profits being made by shipping company currently. Warehousing probably doing well. Trucking rates haven't inflated anywhere by the same amount - except for the FAF which is driven higher with current pricing.

Isn't trucking/transport more a barometer of economic activity and be a bigger driver of their business??

ANZ Truckometer | NZ economic indicator | ANZ (https://www.anz.co.nz/about-us/economic-markets-research/truckometer/)

[Pricey]

Agree. These dislocations tend to play out longer than people originally think. It would have been easy to look at last year's run and say it couldn't be repeated and would abate!

[Shareguy]

I’m thinking MFT good buying at the moment. Craigs have eps of $3.43 YE22 and target price of $95 outperform rating. While I think that the air freight prices will come down the high shipping costs are going to be with us for some time and might be the new normal. Sure there is risk but at a
forward Y22 PE of 23 I see good value and have added to my position.

[alokdhir]

I’m thinking MFT good buying at the moment. Craigs have eps of $3.43 YE22 and target price of $95 outperform rating. While I think that the air freight prices will come down the high shipping costs are going to be with us for some time and might be the new normal. Sure there is risk but at a
forward Y22 PE of 23 I see good value and have added to my position.

Same here as I have never seen it better priced to buy in last few years . Added around $ 80 . Surely it can go further down in this downtrend but just cant pick the bottom....its a great stock and long term story

[Beagle]

Was ~ $40 2 years ago before Covid hit. Market is a VERY forward looking beast, a lot more forward looking than many people (myself included) often think and is probably already starting to price in a pretty harsh recession next year with all that implies for freight movements.

Almost every time I have tried over the years to buy in a downtrend and pick the bottom that approach has cost me money.

A good approach for those that want to invest fresh capital here might be to wait for a break up through the 30 day moving average (indicating the possibility of a new uptrend emerging) and put on a half sized position and then the other half if there's a break up through the 100 day MA.

Picking bottoms when there's been a clear breakdown through the 200 day MA is not for the faint hearted !

[Shareguy]

Good points Beagle. Agree buying on a downtrend is not a good strategy and comes with risk that you overpay. I have been looking at buying into this company for years and it always looked to expensive. It was expensive at $5.00 and now it’s $80. Yes some are saying that the COVID effect will fade and therefore so will the share price. It could also be the new base and an entry point at this level looks attractive to me. It’s a bottom drawer (Sleep well) share that will sit well with my holdings in Apple, Ebos and FPH. One thing I have learnt is that you have to pay for quality. History says that this share will keep increasing so happy to keep long term and get rich slowly, with a degree of safety.

[alokdhir]

Downtrends for bad businesses last and their SP never recover ..eg ATM ...downtrends for good businesses and companies are buying opportunities as they always end up surpassing their previous HIGHS .

If u have identified a good business eg MFT / FPH / EBO / SUM / IFT then every downtrend is buying opportunity ....IMHO

But trading views and long term buyers views can be different . I have also learnt its easier to be a long term holder of good stocks and one ends up making many times more money then an astute trader

Also I am of firm opinion that TA works well with FA also ...stand alone TA gives too many false hopes and fears

[Swala]

Mainfreight continuing it's steady slide. Anyone care to pick where they think the bottom might be?

[alokdhir]

Mainfreight continuing it's steady slide. Anyone care to pick where they think the bottom might be?

IMHO ...75-77 band

Did u notice the volume ?? No sellers and no buyers ...going down on very low volumes

[Swala]

IMHO ...75-77 band

Did u notice the volume ?? No sellers and no buyers ...going down on very low volumes

Yes, very thin volumes indeed. I sold out a few months ago at $95 after a great run since the start of Covid. Would be very happy for the opportunity to buy back in at $75 :p

[mikelee]

I sold 40% of my holdings at around $95 too and just waiting for some funds to be freed up before topping up again so I can average down. :cool:

[Jonette]

IMHO ...75-77 band

Did u notice the volume ?? No sellers and no buyers ...going down on very low volumes

Nope, a quick check on volume using historical data from Yahoo shows it is actually relatively high.

13538

Is there more noise out there after the update on the 2nd?

[Goose]

Don Braid has recently added another $776K worth of shares at $77.66...they say follow the smart money and in this case the money is VERY smart.

https://announcements.nzx.com/detail/388121

[longy]

Don Braid has recently added another $776K worth of shares at $77.66...they say follow the smart money and in this case the money is VERY smart.

https://announcements.nzx.com/detail/388121

Is anyone else been buying? I have been adding since the dip.

[Shareguy]

Yes I have been buying on the dips.

[biker]

Is anyone else been buying? I have been adding since the dip.

Yep. Bought several hundred yesterday at $77.20

[iceman]

MFT suspending it's Russia operation and closing the Ukranian office. Good on them.

GENERAL: MFT: Mainfreight Limited - Network Update 09:39a.m.
MFT
09/03/2022 09:39
GENERAL
NOT PRICE SENSITIVE
REL: 0939 HRS Mainfreight Limited

GENERAL: MFT: Mainfreight Limited - Network Update

9 March 2022

MAINFREIGHT LIMITED - NETWORK UPDATE

Mainfreight Limited (NZX: MFT) advises our logistics services into and out of
Russia have been suspended with immediate effect.

Our Ukraine office has been closed as a result of the current conflict. Our
people are safe and those wanting to leave the country are being assisted
with transport and relocation into our other European operations.

Ends

Don Braid
Group Managing Director

[Beagle]

Suspending operations doesn't cut it in my opinion. Got to make Putin pay an enormous price for what he's doing. Just shut down operations permanently and stop doing any business within or to and from Russia. Many other companies like BP and countless others are completely exiting Russia so why hasn't Mainfreight done the right thing ?
Their response looks weak and pathetic and is only the very bare minimum.
The real question is, Is it ever going to be acceptable to do business in Russia again while Putin is in power ? https://www.nzherald.co.nz/world/russia-ukraine-war-biden-bans-russian-oil-warns-of-putin-price-hike-at-pump/FPLDQLOGS6K672272FWSBB2C4M/

[MauroNZ]

Suspending operations doesn't cut it in my opinion. Got to make Putin pay an enormous price for what he's doing. Just shut down operations permanently and stop doing any business within or to and from Russia. Many other companies like BP and countless others are completely exiting Russia so why hasn't Mainfreight done the right thing ?
Their response looks weak and pathetic and is only the very bare minimum.
The real question is, Is it ever going to be acceptable to do business in Russia again while Putin is in power ? https://www.nzherald.co.nz/world/russia-ukraine-war-biden-bans-russian-oil-warns-of-putin-price-hike-at-pump/FPLDQLOGS6K672272FWSBB2C4M/

In that line Coca-cola should stop being drunk as well as Starbucks.

[Sideshow Bob]

If nothing else with Russia getting shut out of SWIFT, then flow of money in and out of Russia will be much more challenging, and problematic for corporations. I would expect that the flow of freight will slow dramatically also.

[winner69]

Director Kate buys 15 more shares

Directors buying always a good sign

[Sideshow Bob]

Director Kate buys 15 more shares

Directors buying always a good sign

Probably cost more to put out the announcement....

[Charlie]

Seems a bit of a silly purchase and announcement, 15.?
people just see ‘director buys shares’ and up she goes !
PE still up there.......

[winner69]

Seems a bit of a silly purchase and announcement, 15.?
people just see ‘director buys shares’ and up she goes !
PE still up there.......

And she had written permission to buy them during a closed period

[Peitro]

Was this just a delayed Divi reinvestment :D

Some big sellers at the end of the day

[nztx]

Was this just a delayed Divi reinvestment :D

Some big sellers at the end of the day


they may be regretting selling out . given today's close

$2.42 rise for the day doesn't look too shabby :)

like roughly 2 & 1/2 times the Cash Div for the last year - isn't it ? :)

[Beagle]

Director Kate buys 15 more shares

Directors buying always a good sign Didn't work out too well for Nick at the Warehouse. Beagle really out foxed him :t_up:

[Waltzing]

lot of bear moving on freight between germany and sweden at the moment as im told that drinking beers everyday at the moment is a stress relief.

Freight doing well in europe.

been warned that on returning even if its 2024 one can expect to have to par take.

Not a bear drinker but in this case they expect to be medicating for a few years to reduce the stress level.

European freight could be a winner.

[iceman]

lot of bear moving on freight between germany and sweden at the moment as im told that drinking beers everyday at the moment is a stress relief.

Freight doing well in europe.

been warned that on returning even if its 2024 one can expect to have to par take.

Not a bear drinker but in this case they expect to be medicating for a few years to reduce the stress level.

European freight could be a winner.

So are the bears drinking all the beer, or what ? Or have you been drinking beer in this bear market ?

[Bjauck]

So are the bears drinking all the beer, or what ? Or have you been drinking beer in this bear market ? If the bears drink too much beer, then they will end up bare on a bier.

[BlackPeter]

If the bears drink too much beer, then they will end up bare on a bier.

That man deserves a DB!

[Peitro]

Bruce buys a couple of shares and the world goes mad

[mistymountain]

DISCL: Was invested in MFT. Sold earlier this year after thinking about macro economic headwinds.

This Latest Economic Ninja vid has some points that will be interesting to see play out over the short / medium term .

https://www.youtube.com/watch?v=29HsMreyBuY

[Maxtrade]

DISCL: Was invested in MFT. Sold earlier this year after thinking about macro economic headwinds.

This Latest Economic Ninja vid has some points that will be interesting to see play out over the short / medium term .

https://www.youtube.com/watch?v=29HsMreyBuY


Metrics still indicating down trend in place. 12 wk EMA and 200day EMA levels briefly tested but didn't break through, is this a continuing bearish downtrend in place??

[winner69]

Well those who bought as long term 10 years ago, paid $9.86 on 24/4/2012.
Also enjoyed dividends as well. Current dividend is about 10% on cost..
And current share price is 9 times what it was 10 years ago.
"Not a lot of people who do not own MFT shares know that."...lol

[alokdhir]

Well those who bought as long term 10 years ago, paid $9.86 on 24/4/2012.
Also enjoyed dividends as well. Current dividend is about 10% on cost..
And current share price is 9 times what it was 10 years ago.
"Not a lot of people who do not own MFT shares know that."...lol

I know u got this inspired thought from where mate ...lol

Hopefully MFT will not go in deep hibernation like FPH ....:p

IMHO its actually the SP which will follow EPS ...so just like EBO which has higher eps forecasts ahead ....MFT is also on similar path with little more doubts about its immediate future earnings ...where as FPH surely needed more time to Normalise the super big Covid year ....not easy for a company which was on 10% growth trend to do 56% revenue growth in just one year then normalise quickly ...Disruption caused to SP was too much to handle and its suffering a hangover of plenty

MFT on other hand may be able to handle covid normalisation better as organic growth is easier then FPH ...but still fingers crossed

[Maxtrade]

I know u got this inspired thought from where mate ...lol

Hopefully MFT will not go in deep hibernation like FPH ....:p


IMHO its actually the SP which will follow EPS ...so just like EBO which has higher eps forecasts ahead ....MFT is also on similar path with little more doubts about its immediate future earnings ...where as FPH surely needed more time to Normalise the super big Covid year ....not easy for a company which was on 10% growth trend to do 56% revenue growth in just one year then normalise quickly ...Disruption caused to SP was too much to handle and its suffering a hangover of plenty

MFT on other hand may be able to handle covid normalisation better as organic growth is easier then FPH ...but still fingers crossed



MFT showing downtrend in place, broke through $79 which was a tell tale sign, if $78 breaks this week then we might well see a swift further decline to test support at $76.

General markets not looking to positive for any real relief any time soon. Some investors might consider selling and taking profits off table at these levels and wait to see if regain some overall more positive trends in a few months time.

MFT downtrend seems to be in place since last October now! got to pretty inflated elevated levels, as a lot of stocks did, so have quite a bit of 'room' to retrace.

[Peitro]

As long as Freight is a logistical challenge, MFT will continue to provide value to customers and will be duely rewarded. Stories of freight congestion and the Freightos Baltic Index not receding anywhere as quick as predicted both support satisfactory performance going forward. Picking there will an uptick in the NPBT I had estimated at $446M =$475M?

[kiora]

"Big giver: Mainfreight’s Bruce Plested"
https://businessdesk.co.nz/article/charities/big-giver-mainfreights-bruce-plested

[Leemsip]

Reckon MFT heading for $50 once the housing recession hits over the next couple of years.

One of NZ best companies, so definitely a buyer at some point.

[alokdhir]

Reckon MFT heading for $50 once the housing recession hits over the next couple of years.

One of NZ best companies, so definitely a buyer at some point.

Brokers have $ 103.50 as consensus target for year ahead ...rest is up to u to decide ...it will be $ 50 or $ 100 in a year ...lol

[bull....]

see there talking about a trucker recession in the states

The U.S. freight recession has arrived; autonomous innovation expanding
https://talkbusiness.net/2022/05/the-u-s-freight-recession-has-arrived-autonomous-innovation-expanding/#:~:text=Excess%20capacity%2C%20waning%20demand%20 and,contributing%20to%20the%20decline%2C%20too.

wonder if it translates to everywhere the same issues?

[Shareguy]

see there talking about a trucker recession in the states

The U.S. freight recession has arrived; autonomous innovation expanding


https://talkbusiness.net/2022/05/the-u-s-freight-recession-has-arrived-autonomous-innovation-expanding/#:~:text=Excess%20capacity%2C%20waning%20demand%20 and,contributing%20to%20the%20decline%2C%20too.

wonder if it translates to everywhere the same issues?

Thanks for posting Bull. No question it’s going to be a good result this year but real risk to the downside going forward.

[maclir]

see there talking about a trucker recession in the states

The U.S. freight recession has arrived; autonomous innovation expanding


https://talkbusiness.net/2022/05/the-u-s-freight-recession-has-arrived-autonomous-innovation-expanding/#:~:text=Excess%20capacity%2C%20waning%20demand%20 and,contributing%20to%20the%20decline%2C%20too.

wonder if it translates to everywhere the same issues?

It's a complex story, but not great news, certainly you'd think the larger freight companies are much less vulnerable to these spot rate changes than thpse new drivers who have come into the business in the last year.

[Baaarney]

Last Week Tonight with John Olliver had a really interesting piece on truck drivers in the USA - most are contractors getting screwed over by big trucking companies.
https://www.youtube.com/watch?v=phieTCxQRLA

[Bjauck]

Last Week Tonight with John Olliver had a really interesting piece on truck drivers in the USA - most are contractors getting screwed over by big trucking companies.
https://www.youtube.com/watch?v=phieTCxQRLAOlliver is a lefty liberal Limey telling American Capitalism that it should not to exploit workers by making them into "contractors". Who does he think he is?

[Walter]

There is lots of whining in USA about lack of truckers, treating them like **** will bite them on the bum. If the capitalist model works expect massive increases in trucking costs. In the UK they have doubled wages in some cases, but they are still short.

[BlackPeter]

There is lots of whining in USA about lack of truckers, treating them like **** will bite them on the bum. If the capitalist model works expect massive increases in trucking costs. In the UK they have doubled wages in some cases, but they are still short.

I guess this is not surprising since they removed thanks to the BREXIT their access to a large pool of good and reliable truckies from what used to be Eastern Europe. If you cut your workforce in half and don't allow new people to come in, it doesn't matter how much you pay whover stays ... it won't increase the workforce.

Just shows how braindead the populists are ...

[dobby41]

I guess this is not surprising since they removed thanks to the BREXIT their access to a large pool of good and reliable truckies from what used to be Eastern Europe. If you cut your workforce in half and don't allow new people to come in, it doesn't matter how much you pay whover stays ... it won't increase the workforce.

Just shows how braindead the populists are ...

There seems to be a shortage of truck drivers around the world - not just in the UK.
It seems that many have worked out that there are better ways of living their life post Covid times.
Same with bus drivers.

[Bjauck]

There seems to be a shortage of truck drivers around the world - not just in the UK.
It seems that many have worked out that there are better ways of living their life post Covid times.
Same with bus drivers. True. I wonder how much of it is due to the fact that potential truckers realised during the pandemic the benefits of holiday and sick pay that come from being employees rather than contractors. However in the UK their problem is compounded by their leaving the EU common labour market during the pandemic. Many of the truckers working in the UK had been other EU nationalities. The inflationary effect on the UK from Brexit trade and other impediments is probably getting mixed up with the inflationary effects from Covid and The Russian Invasion.

[Rawz]

Mainfreight's truck drivers choose to be contractors so they can own their truck. Its painted in Mainfreight livery sure, but the truck is owned by the driver.

The main benefit of contracting and owning your own truck is after a few cycles the truck is nearly debt free. And when you have a long haul tractor + trailer unit you can be talking around $600k in a freehold asset.. most truck drivers prefer this vs on wages with holiday pay, sick pay etc. Companies like MFT like it as they dont have to for example 1000 x $600k truck/trailers on the balance sheet.... repairs and maintenance on P&L blah blah

You can do okay in NZ driving trucks. You can pay yourself up to $100k a year in a salary and work on that freehold truck cycle. It's not bad. You dont need an expensive education. But must love driving. I certainly couldn't do it lol. But if i was to i would chose to be a contractor rather than drive on wages.

Edit: a cycle typically being 5 years. I.e. 100% finance a truck over years 0-5. Trade in truck and fund 80% of next truck years 6-10, trade in and fund 50% year 10-15 etc etc

[Bjauck]

Mainfreight's truck drivers choose to be contractors so they can own their truck. Its painted in Mainfreight livery sure, but the truck is owned by the driver.

The main benefit of contracting and owning your own truck is after a few cycles the truck is nearly debt free. And when you have a long haul tractor + trailer unit you can be talking around $600k in a freehold asset.. most truck drivers prefer this vs on wages with holiday pay, sick pay etc. Companies like MFT like it as they dont have to for example 1000 x $600k truck/trailers on the balance sheet.... repairs and maintenance on P&L blah blah

You can do okay in NZ driving trucks. You can pay yourself up to $100k a year in a salary and work on that freehold truck cycle. It's not bad. You dont need an expensive education. But must love driving. I certainly couldn't do it lol. But if i was to i would chose to be a contractor rather than drive on wages.

Edit: a cycle typically being 5 years. I.e. 100% finance a truck over years 0-5. Trade in truck and fund 80% of next truck years 6-10, trade in and fund 50% year 10-15 etc etc Thanks for the info. How many hours/week has to be put in to earn that 100k per annum? Can you truck drive for Mainfreight as an employee or is the only option as an owner-driver-contractor?

A fair amount of risk is also transferred to the truckie/rig owner. is overwork burnout an issue for NZ contractor Truckies? How long (how many cycles) does the average NZ truckie stay in the business and is there a good second hand market for a depreciated rig should they need or wish to quit?

[Rawz]

Thanks for the info. How many hours/week has to be put in to earn that 100k per annum? Can you truck drive for Mainfreight as an employee or is the only option as an owner-driver-contractor?

A fair amount of risk is also transferred to the truckie/rig owner. is overwork burnout an issue for NZ contractor Truckies? How long (how many cycles) does the average NZ truckie stay in the business and is there a good second hand market for a depreciated rig should they need or wish to quit?

I don't truly know mate. However it would be fair to assume a contractor would work longer/harder than someone on wages. It's like anything in life, when it's yours you will put a lot more effort into it.

Yes, a lot more risk is transferred to the truckie. But with risk comes reward. I have seen plenty of examples of guys starting from nothing and before you know it they have 3 trucks with 2 employed drivers. This type of business can generate enough income to live a very comfortable life and by the time you go to retire you have 3x $600k rigs freehold... that's the nest egg.. you can sell the operation at book value or run the last cycle in freehold trucks which would generate enough ebitda to repay $1.8m in debt in 5 years.

And yes, conversely I have seen owner drivers left high and dry.. they then need to scramble and find new contracts. But I havnt seen this for a long time.. it has been a strong market for a long time now.

In general you will be ahead of the depreciation curve on a truck after 6 months of repaying it. The secondary market is extremely strong at the moment for trucks because of covid/chip related delays and inflation on new trucks.
I wouldnt know how many cycles they would do. The true truckies go forever.. i once saw a guy add $80k of chrome, lights and a mint paint job to his $400k truck. That $80k generated nil extra income.. but boy that truck was the best looking truck running the golden triangle (Auckland to Hamilton to Tauranga and back to Auckland) :t_up: its a lifestyle for some. They only care about earning enough to drive a beautiful truck and live a modest life.

[Beagle]

Hey Rawz. I'm really enjoying reading your insights into the transport industry. I'd give you more rep but I have to spread it round first.
After leaving University I took a gap year and was a motorcycle courier for a year...I actually really enjoyed it and the camaraderie with the other guys. We all used to hang out at the Waldorf café in central Auckland between jobs drinking coffee and talking all sorts of crap. Didn't make much money but a lot of fun and enjoyed riding my motorcycle a lot except on really rainy days of course lol.
I then hit the books as a junior in a Chartered Accounting firm in the early 1980's. Sometimes wonder if I would have enjoyed the transport industry more but its too late now to change career's LOL

[Bjauck]

I don't truly know mate. However it would be fair to assume a contractor would work longer/harder than someone on wages. It's like anything in life, when it's yours you will put a lot more effort into it.…. Thanks for the industry insight. Freight companies should be keen on keeping reliable good contractors.

Bj and the bear!!
https://www.youtube.com/watch?v=Rcozed_BJWM&t=29s

[Rawz]

Cheers Beagle. The old saying "choose a job you love, and you will never have to work a day in your life" comes to mind. This would apply to a lot of truckies