FPH - Fisher Paykel Healthcare.

[winner69]

H122 at 40 cents/share + H222 at 42 cents/share = Full Year 82 cents

PE = $29.50 / $0.82 = 36

Hardly been cheaper at this level

[winner69]

If the CEO says H2 is going to be better than H1 then why do they keep saying ' the company is not providing quantitative revenue or earnings guidance for the remainder of the 2022 financial year.'

Maybe its around the that word 'quantitative' ....but they could have officially said 'Greater than $444m' (twice H1) or even given a decent range like '$450m to $500m)

What am I missing

Won't be funny if the guru analysts (with their ear close to the ground wink wink nudge nudge stuff) were about right with their $404m

[winner69]

see shareprice 2710 on ASX - down 1.7% - about NZD29.00

[Beagle]

I clearly stated, FY23 earnings. Biggest guessing game in town for this and MFT is how long will the Covid tailwinds last and what's future earnings without them ?

[BlackPeter]

I clearly stated, FY23 earnings. Biggest guessing game in town for this and MFT is how long will the Covid tailwinds last and what's future earnings without them ?

You are quite right - there always was a case to make for the FPH share being too dear - even when the share was around $2.50. It is just one of these cases of the market not listening the the voice of reason :); Sigh - market participants are like naughty children ...

Just looking at the long term price trend:

13491

Looks like the Covid bonus has already deflated and SP is back to the long term growth line.

Obviously - nobody can predict what tomorrows (well, next months or years) prices are ... but so far I don't see a reason for FPH to drop significantly below the long term trend line ... which means we might be due for another bounce.

I see a great company moving from high to high ... and given what you told us (on some other thread) about the development of peoples body masses during Covid lock downs ... one does not need Covid to benefit from FPH's breathing devices. People with obesity are more likely to develop breathing problems in later stages of their life - and if there are more of them around, we need more of FPH's products and - still more importantly - consumables.

The combination of more and more people not just growing old but gaining weight is an amazing tailwind for FPH.

[Beagle]

What you are suggesting is there's no worries here about Covid tailwinds being temporary and the downtrend since August 2020 is just a temporary aberration in what's a fabulous long term uptrend. Further, 44.5 times FY23 average analyst earnings is cheap for such a fabulous company so this is a great entry point for fresh capital because many of us are getting fatter and the population base is getting older. Good luck with that.

[winner69]

deleted ,,,, shouldn't spoil BP's party

[Rawz]

Lol come on winner. we dont wont an echo chamber in here. Lay the bear case on us. Personally i am with BP and alokdhir but like to see the other view

[BlackPeter]

What you are suggesting is there's no worries here about Covid tailwinds being temporary and the downtrend since August 2020 is just a temporary aberration in what's a fabulous long term uptrend. Further, 44.5 times FY23 average analyst earnings is cheap for such a fabulous company so this is a great entry point for fresh capital because many of us are getting fatter and the population base is getting older. Good luck with that.

Look beagle, no need for making up what I said and no need for cynicism either. Bad start to the day?

My point was that FPH was always expensive ... and that it is today (looking at growth rate and earnings) not more expensive than it used to be at any other time over the last decade or so.

Actually - it is in comparison to previous years quite cheap ... based on a forward PE of 39 (based on an average over the forecasts of the next three years) and on an earnings CAGR of 14 (again - forward earnings based on analysts forecasts). That's a net PE of 25 (forward PE minus forward earnings CAGR). Not cheap, but apparently what the market is happy to pay.

Of course - we all know that markets tend from time to time rerate what they pay for PE's and growth rates (these occasions are commonly called bear markets). I am sure, this will happen again in the future, but none of us knows whether this will be tomorrow, next week, next month, next year or a couple of years down the track.

However - what I know is that good companies producing essential stuff like FPH are typically less hit by these phenomenon's than the indices - i.e. while I don't know when the next crash comes, I am pretty sure that FPH will keep performing well compared to other stocks.

Just for fun ... here is a 5 year comparison of FPH with the NZX50. FPH is the blue line. Do you spot which of the lines was growing faster ...? I probably would go with the 240% FPH gained over the last 5 years rather than with the 70% the NZX50 gained, but hey - each to their own.

13494

Do I expect them to grow over the next 5 years another 240%? Actually, no ... however I would expect them to keep outperforming the NZX50. This is for me a good reason to have some of them in my portfolio ... and yes, I did accumulate a bit over the recent period of weakness.

Is it possible that they drop a bit more before they re-join the trendline? Absolutely. I just think that they are at current fair price - and I leave the bottom picking up to others :p;

Tell us how you are going :):

[Beagle]

Biggest guessing game in town is what earnings the market darlings like FPH and MFT will be when Covid tailwinds finish ? I've had my 2 cents worth already. In summary the huge tailwinds won't last so pay a high PE based on temporarily boosted earnings at your peril. Better head back to my kennel before someone else wants to try kicking me.

[winner69]

BP - you have me intrigued ....what's this Net PE you mention

Always willing to learn something new

[Biscuit]

BP - you have me intrigued ....what's this Net PE you mention

Always willing to learn something new

It's a way of confirming something is over-priced whilst trying to reassure yourself it isn't.

[Rawz]

It's a way of confirming something is over-priced whilst trying to reassure yourself it isn't.

A bit like a DCF model. Just change around a few variables and youll get the price you want

[Muse]

Biggest guessing game in town is what earnings the market darlings like FPH and MFT will be when Covid tailwinds finish ? I've had my 2 cents worth already. In summary the huge tailwinds won't last so pay a high PE based on temporarily boosted earnings at your peril. Better head back to my kennel before someone else wants to try kicking me.

Guru Wade Gardiner from CIP released a report overnight saying no dip post bottlenecks for mainfreight - earnings going up each year till 2024 & beyond.

Its all gravy baby.

[alokdhir]

There is always a reason why some stocks are called blue chips ....Once people understand that then they need worry little less holding them ...Apple 10 years back was tremendously expensive ...but still gave phenomenal returns ...Blue chips have extra value as all want to hold them ...so they never go to so called Cheap valuations .

Maybe all know here but just want to go after blue chips for fun :p

[winner69]

Our man Lewis Gradon addressing the Auckland Shareholders Ass meeting next week

Might even mention FPH is a blue chip;)


If a member don’t miss it …or if not a member join the NZSA https://www.nzshareholders.co.nz/

[alokdhir]

Our man Lewis Gradon addressing the Auckland Shareholders Ass meeting next week

Might even mention FPH is a blue chip;)


If a member don’t miss it …or if not a member join the NZSA https://www.nzshareholders.co.nz/

Go after him buddy with all u got against FPH ...we poor small holders here do not have his and your kind of insights ...scaring us should not thrill u ...try him ...if u can make him say that FPH is overvalued at 29.50 ...:D

Also request him on behalf of we minority holders that they should provide regular trading updates if cant provide future guidance so that we all know whats going on and dont fall prey to scaremongers easily

[winner69]

Go after him buddy with all u got against FPH ...we poor small holders here do not have his and your kind of insights ...scaring us should not thrill u ...try him ...if u can make him say that FPH is overvalued at 29.50 ...:D

Also request him on behalf of we minority holders that they should provide regular trading updates if cant provide future guidance so that we all know whats going on and dont fall prey to scaremongers easily

You misunderstand me alokdhir …..I hold at the moment but don’t see any value in increasing my exposure at this point in time …like the return on the new money probably not that great.

[alokdhir]

You misunderstand me alokdhir …..I hold at the moment but don’t see any value in increasing my exposure at this point in time …like the return on the new money probably not that great.

Maybe I will agree with u that its a hold only at the moment with our insights as with new rates environment its fair value maybe around 30-31 ...though broker average target after last HY results is around 33 which includes 23.50 from our favourite Morningstar .

But with a company like FPH ...U never know from where opportunity comes and it shoots up ...As BP pointed out and I fully agree that its due for a bounce over the LT trend line ...when that happens not easy to predict .

Holding FPH is our only sensible option ...IMHO

[BlackPeter]

BP - you have me intrigued ....what's this Net PE you mention

Always willing to learn something new

I probably made the term up as I went ... however - it is not unusual to deduct the growth rate from the PE to be able to compare companies with different growth rates in value.

I am sure that it would be even possible to transform this value somehow into the PEG, but not motivated enough at the moment

Example:
FPH
(1) forward PE 38.8,
(2) forward earnings CAGR 13.8,
(3) PEG ((1) / (2)): 2.81 and
(4) the "net PE" would be (1) - (2): 25;

Makes sense?

[Beagle]

My most useful filter for finding GARP stocks, (Growth at a reasonable price) is a variation of the Ben Graham model such that
v = eps x (n + g) where
eps is estimated forward eps
n = no growth PE which is 8.5 when 10 year Govt stock is 4.0% and adjusted for where 10 year Govt stock currently is @ 2.6% adds 1.4 so no growth PE becomes 9.9.
FY22 eps is 71 cps. https://www.marketscreener.com/quote/stock/FISHER-PAYKEL-HEALTHCAR-6492630/financials/
g = average growth rate expected over the next 7-10 years, this is obviously the biggest guess but let's use the historical average growth figure and assume 13.8 per BP's maths is correct then for the stock to be attractively valued as a GARP stock it would be 0.71 x (9.9 + 13.8) = $16.83

Sounds like a stupid answer when the market says something completely different but the shares have been in a downtrend for 18 months now so maybe give it some time and my valuation methodology will not look so silly.

Paying 2 times g is not something I would ever do.

I'll stick to what I know works really well for me but freely acknowledge that long term holders have done very handsomely indeed, so well done to them and best wishes for the future.

[Gerald]

There is always a reason why some stocks are called blue chips ....Once people understand that then they need worry little less holding them ...Apple 10 years back was tremendously expensive ...but still gave phenomenal returns ...Blue chips have extra value as all want to hold them ...so they never go to so called Cheap valuations .

Maybe all know here but just want to go after blue chips for fun :p

Actually go back and look at history. AAPL grew EPS from $0.10 in 2007 to $1.50 in 2013, and despite this it traded on a PE of around 9 in 2013. If it had traded on the current mutiple of 30 back then as one could have argued it deserved you would have only received a 318% return over the next 9 years rather then the actual 1153% return. Hence the majority of the return from AAPL was actually mutiple rerating which you are much less likely to get with FPH as the mutiple should actually contract as growth decreases from a larger base as it grows.

At a certain price a great company like FPH can be a worse investment then an average company like TRA or TWR. Hence your argument should be why FPH is cheap at the current price and will outpreform the expectations baked into the current price, rather then "oh this is a great blue chip, can't loose money, pay any price" etc etc.

[alokdhir]

Actually go back and look at history. AAPL grew EPS from $0.10 in 2007 to $1.50 in 2013, and despite this it traded on a PE of around 9 in 2013. If it had traded on the current mutiple of 30 back then as one could have argued it deserved you would have only received a 318% return over the next 9 years rather then the actual 1153% return. Hence the majority of the return from AAPL was actually mutiple rerating which you are much less likely to get with FPH as the mutiple should actually contract as growth decreases from a larger base as it grows.

At a certain price a great company like FPH can be a worse investment then an average company like TRA or TWR. Hence your argument should be why FPH is cheap at the current price and will outpreform the expectations baked into the current price, rather then "oh this is a great blue chip, can't loose money, pay any price" etc etc.

When a company becomes mature and kind of bluechip ...u r not expecting it to be a multi bagger anymore but a steady performer ...as I hold it from 2010 ...for me the multi bagger part has happened ...reason I call it blue chip and also why I call it blue chip means I am expecting it to be a safer and steadier investment from here on ...I expect only 15 % yearly over next 10 years period not doubling every 2-3 years which people expect from smaller stocks .

It all depends upon your risk profile and sums involved etc .

Also I never expect it to outperform such smaller and riskier shares like TRA and TWR similarly I dont expect it to tank like smaller shares like TWR and TRA or WHS or OCA ...

Bluechips investments dont need glued on efforts and sleepless nights etc .

People and pension funds and investment companies like KFL and Fisher funds cant trade like many here ...they go for longer term investment grade shares and FPH and MFT are top notch picks for them . KFL holds MFT since 2004 and FPH since 2013 . U cant do that with all smaller companies as their growth lasts only that much time ...great example are retail stocks ....WHS type ...they are in flavour for short time ...blue chips are forever and they need much lesser work to hold them

Fisher & Paykel Healthcare (F&P) delivered against the backdrop ofa weak local equity market. The company reported a strong first half result, ahead of expectations, boosted by another wave of COVID hospitalisations in the US, Asia, and certain countries in Europe. The bulk of the strength was in sales of new hardware in the Hospital division, which continues to grow the installed base of F&P products in both established and new customers (70% of hardware sales were outside of the core markets of US/Europe).
There is increasing weight of evidence to suggest that nasal high flow (key product) usage will structurally increase even as COVID wanes. This is because (1) the therapy has stood up in a crisis and doctors who are new to the products have now had first-hand experience in seeing its efficacy; (2) there is a still sharply growing installed base of F&P hardware;
(3) clinical evidence is supportive; (4) F&P is increasing its sales force
to provide education to recent adopters and increase consumable usage. Market expectations do not appear to factor this in, as medium- term forecasts remain in line with the pre COVID trajectory and imply meaningful under-utilisation of the much higher installed hardware base.

Extract from KFL .... telling reasons why it will do better then expectations ahead . That part had been discussed many times before so didn't include in all posts


https://www.stuff.co.nz/business/127589417/fisher--paykel-healthcare-boomed-during-the-pandemic-what-is-the-outlook-now

Further reasons in article above as it includes opinion of Chief analyst of Craigs too about FPH and its future after covid .

[kiora]

https://finance.yahoo.com/news/ran-stock-scan-earnings-growth-003020647.html

[winner69]

I've always found this chart fascinating. A year old but little has changed - if anything both lines are a little higher.

It shows the PE ratios of growth stocks and value stocks over time

Four years from 2010 to 2014 the PE ratios of growth and value stocks weren't not that far apart ......but over the last 7 years 'growth' stocks PE have expanded quite dramatically while the poor old 'value' stocks remain about the same PE

Just confirms most the share price gains from the likes of FPH, MFT and other growth stocks have not only come from eps growth but to a large degree from PE expansion. That's good eh.

[Rawz]

ASB data say FPH p/e goes something like this:

2013= 18.99
2014= 24.43
2015= 33.07
2016= 39.04
2017= 29.31
2018= 36.96
2019= 39.01
2020= 61.25
2021= 35.51
current= 44.01

So yeah. Solid re-rate. Wonder if one day it will be 18-24 p/e again?

[winner69]

I also find this chart fascinating.

It’s based on the US markets but a NZ one would look much the same (previous chart would show it is)

The chart shows the PE of growth stocks relative to value stocks (ie growth PE divided by value PE). The end point is about 2.2 …I’m told NZ is over 2.4 at the moment.

Interesting that PE of growth stocks is likely to revert to something much closer to that of growth stocks……..previous post showed that in NZ prior to the rise in growth PEs there wasn’t much between growth and value PEs.

Interesting eh ……is only averages, not stock specific but things do tend to move together ……just as will this time it’s different

[alokdhir]

I also find this chart fascinating.

It’s based on the US markets but a NZ one would look much the same (previous chart would show it is)

The chart shows the PE of growth stocks relative to value stocks (ie growth PE divided by value PE). The end point is about 2.2 …I’m told NZ is over 2.4 at the moment.

Interesting that PE of growth stocks is likely to revert to something much closer to that of growth stocks……..previous post showed that in NZ prior to the rise in growth PEs there wasn’t much between growth and value PEs.

Interesting eh ……is only averages, not stock specific but things do tend to move together ……just as will this time it’s different

Yes its always advisable to have all types of stocks in portfolio as one never knows which type will find favour with market as they manufacture reasons to do what they want to do ...many call it financial engineering ...U also know the tricks pretty well ...How they made dodgy junk bonds bundles into AAA rated in US ...lol

Today did u notice KFL premium widening back to 12 % on thin volumes ...who is managing that ...all FF stocks going up . If FPH / MFT ie 36% of KFL is over valued then paying extra 12% for them should be alarming over valuations ...its like getting FPH for $ 34 and MFT for $ 97.50 when u buy KFL at 1.88 ...which many did ...amazing ...market can remain illogical or irrational for longer then individuals can remain solvent going against it ...famous saying in markets .

Shorter's of Tesla comes to mind ...its doing well but P/E of 300 ...300 for a manufacturing company !!! Wow ...also all shorters went bankrupt I reckon .

[Rawz]

What are the next NZX stocks to expand their multiples from the teens to the 30's?? Like FPH did

So many already there. FPH, MFT, FRE, EBO, RBD, SKL, SCL, AFT etc

Some in the 20s. DGL, CVT, SPK, SAN, SCT..

Retailers all below 20 but cant see them going higher than high teens. Unless one goes on an international tear
Didnt bother with the utilities or property co's or retirement co's.

Leaves the hopefuls;

TRA
RAK
FBU
STU
SKC
AIR (LOL)
HGH
TWR
NZM
SEK

probably missing some.

[Biscuit]

I've always found this chart fascinating. A year old but little has changed - if anything both lines are a little higher.

It shows the PE ratios of growth stocks and value stocks over time

Four years from 2010 to 2014 the PE ratios of growth and value stocks weren't not that far apart ......but over the last 7 years 'growth' stocks PE have expanded quite dramatically while the poor old 'value' stocks remain about the same PE

Just confirms most the share price gains from the likes of FPH, MFT and other growth stocks have not only come from eps growth but to a large degree from PE expansion. That's good eh.


The graph really shows both PE expansion of growth companies and that, over long times, companies that have high PE/fast growth, do in fact grow and tend to dominate the market cap. "Value stocks" on the other hand, logically don't attract PE expansion and don't really go anywhere. Its good to have a selection of both IMO, and that is something that doesn't change.

[winner69]

The graph really shows both PE expansion of growth companies and that, over long times, companies that have high PE/fast growth, do in fact grow and tend to dominate the market cap. "Value stocks" on the other hand, logically don't attract PE expansion and don't really go anywhere. Its good to have a selection of both IMO, and that is something that doesn't change.

You say ….The graph really shows both PE expansion of growth companies and that, over long times, companies that have high PE/fast growth, do in fact grow and tend to dominate the market cap. "Value stocks" on the other hand, logically don't attract PE expansion

But it also shows that high PE / growth companies do often experience PE contraction (even while earnings grow)


A bit like our old mate Mr P who kept reminding us ‘the market giveth but the market also taketh away’

[Biscuit]

You say ….The graph really shows both PE expansion of growth companies and that, over long times, companies that have high PE/fast growth, do in fact grow and tend to dominate the market cap. "Value stocks" on the other hand, logically don't attract PE expansion

But it also shows that high PE / growth companies do often experience PE contraction (even while earnings grow)


A bit like our old mate Mr P who kept reminding us ‘the market giveth but the market also taketh away’

The market giveth and the market also taketh away. It is true and there is nothing more painful than holding on while your once capital gain gradually diminishes to nothing and then to a big loss, and sometimes to nothing. And I have felt that pain in the late 80's early 90s in particular before focusing on property (which never goes down). Happily, it is different this time. We don't have corporate charlatans running our largest companies with miraculous profits and negative cashflow. Nor, in NZ, do we have a bubble of unrealistic expectations as we have had in the past. We do have over-valuation as a result of a long benign investment environment with stimulus and low interest rates. For sure we are likely going to see further PE contraction as the growth assets are re-priced downwards. This last year and probably the next are good years for traders, not so great for investors. But either you are mainly a trader or you are mainly an investor. Investors don't really have the option to pull their money out and park it every time someone gets the jitters. Where are companies like FPH and MFT going to be in ten years time? They are not going to go with the Brierley's, Ariadne's, Adelaide Steamship etc. They are made of sterner stuff - it really is different this time.

[winner69]

Hypothetical case just to show what could happen to returns if the PE of a high PE growth company contracts

Table shows the annual return over 5 years for a stock currently trading at $30 on a PE of 40 at different growth rates and PE in 5 years time

Reads like if earnings grow at 20% pa over 5 years and PE contracts to 20 the share price will have grown at 4% pa

Not investment advice - just for illustrative purposes

[winner69]

Here's what Kingfish said about FPH in their latest update

Fisher & Paykel Healthcare (-15%) was not immune from the sell-off in growth companies. In addition, during the month the Recovery RS clinical study was published in the JAMA medical journal, following a pre-print that was released in August 2021. As foreshadowed by the pre-print, this study concludes that in COVID patients continuous positive airway pressure (CPAP) treatment is superior to standard oxygen, while nasal high flow oxygen (FPH's primary product suite) is not necessarily as beneficial in comparison. While we are carefully watching for any adverse reaction to the study, at this stage we are not particularly concerned because of the broader context. Firstly, three other COVID clinical studies were published in the last 12 months that reach a more favourable conclusion for nasal high flow oxygen. Secondly, a much wider body of clinical evidence for acute respiratory illness pre COVID has built up over many years which have more favourable conclusions for nasal high flow oxygen.

Not so good clinical trial outcomes - don't like the sound of that

[BlackPeter]

Hypothetical case just to show what could happen to returns if the PE of a high PE growth company contracts

Table shows the annual return over 5 years for a stock currently trading at $30 on a PE of 40 at different growth rates and PE in 5 years time

Reads like if earnings grow at 20% pa over 5 years and PE contracts to 20 the share price will have grown at 4% pa

Not investment advice - just for illustrative purposes

Well, maybe we overanalyse things a bit.

Just remember what my grandparents (who lived through the big recession, through the 1918 Spanish Flu pandemic, through two world wars, through hyper inflation and two currency devaluations back in Germany) told me:

The people who used to hold shares from manufacturing companies like e.g. Siemens, BASF, Krupp, ... still had their capital after all these troubled times. They still owned shares in companies producing value and making money.

The people on the other hand who put their money into a bank account (or under the mattress), they lost it all. Not once, but twice.

I would see FPH as one of these great companies, which always will hold value, come inflation, war or climate crisis. Same MFT (and some other of our blue chips).

This must be worth something. Has nothing to do with growth, but growth is a premium.

[Beagle]

Hypothetical case just to show what could happen to returns if the PE of a high PE growth company contracts

Table shows the annual return over 5 years for a stock currently trading at $30 on a PE of 40 at different growth rates and PE in 5 years time

Reads like if earnings grow at 20% pa over 5 years and PE contracts to 20 the share price will have grown at 4% pa

Not investment advice - just for illustrative purposes

But next years PE is 45.6 https://www.marketscreener.com/quote/stock/FISHER-PAYKEL-HEALTHCAR-6492630/financials/ so there's potential for an even worse outcome than the bottom left of your table. No worries though because this time its different.

[alokdhir]

Well, maybe we overanalyse things a bit.

Just remember what my grandparents (who lived through the big recession, through the 1918 Spanish Flu pandemic, through two world wars, through hyper inflation and two currency devaluations back in Germany) told me:

The people who used to hold shares from manufacturing companies like e.g. Siemens, BASF, Krupp, ... still had their capital after all these troubled times. They still owned shares in companies producing value and making money.

The people on the other hand who put their money into a bank account (or under the mattress), they lost it all. Not once, but twice.

I would see FPH as one of these great companies, which always will hold value, come inflation, war or climate crisis. Same MFT (and some other of our blue chips).

This must be worth something. Has nothing to do with growth, but growth is a premium.

History shows holding good assets during difficult times is always rewarded ....I see FPH and MFT as great assets . Eventually its the holder who will reap the rewards

[Muse]

History shows holding good assets during difficult times is always rewarded ....I see FPH and MFT as great assets . Eventually its the holder who will reap the rewards

I think their is some merit to flight to quality point you raise. When a company is of such a high quality and achieves the status of a FPH or MFT the market risk premium ascribed the market inevitably falls or expressed a different way achieves a PE margin expansion - rightly or wrongly.

That re-rating can hold for a period of years over and above its pre listed market darling status.

It can also quickly and without particular warning unwind. Ryman shares were forever and a day described as being far too expensive on a p/nta especially relative to their comps. But that premium held for years and years and years. Eventually and suddenly it was rerated down over the last 6 months (but still a bit spicy)

FPH & MFT - deep blue chip assets - so blue they hold our gaze for longer than the others

[alokdhir]

I think their is some merit to flight to quality point you raise. When a company is of such a high quality and achieves the status of a FPH or MFT the market risk premium ascribed the market inevitably falls or expressed a different way achieves a PE margin expansion - rightly or wrongly.

That re-rating can hold for a period of years over and above its pre listed market darling status.

It can also quickly and without particular warning unwind. Ryman shares were forever and a day described as being far too expensive on a p/nta especially relative to their comps. But that premium held for years and years and years. Eventually and suddenly it was rerated down over the last 6 months (but still a bit spicy)

FPH & MFT - deep blue chip assets - so blue they hold our gaze for longer than the others

Main reason for rerating RYM came with rerating of sector and the fact they had very leveraged balance sheet ...where as FPH and MFT dont have such flaws at the moment ...so IMO generalisations dont work perfectly for bluechips

[winner69]

What colour is blue through rose tinted glasses

I don't have rose tinted glasses so can't say

[Beagle]

I think their is some merit to flight to quality point you raise. When a company is of such a high quality and achieves the status of a FPH or MFT the market risk premium ascribed the market inevitably falls or expressed a different way achieves a PE margin expansion - rightly or wrongly.

That re-rating can hold for a period of years over and above its pre listed market darling status.

It can also quickly and without particular warning unwind. Ryman shares were forever and a day described as being far too expensive on a p/nta especially relative to their comps. But that premium held for years and years and years. Eventually and suddenly it was rerated down over the last 6 months (but still a bit spicy)

FPH & MFT - deep blue chip assets - so blue they hold our gaze for longer than the others

Just a bit of history for you as you're pretty new here. RYM have dramatically underperformed the market and the sector for more than 5 years now, with their shares up just 12% against the NZX50 up 75%. They've actually underperformed for longer than that. Way back in early 2014 when they were about $8.75 both Winner and I made the call that they didn't warrant their PE and that growth wasn't sufficient to warrant such an expensive valuation. We both made that point very emphatically, and its a matter of public record in the RYM thread. At the time RYM were the biggest market darling on the NZX. We made the case that the very expensive valuation could lead to many years of market underperformance. There were many howls of protest from emotionally attached investors back then just as there are now with the current crop of market darlings which according to some you cannot lose if you hold long term.

While its true that RYM shareholders have not lost per se over the ensuing 8 years, they have certainly suffered a woeful underperformance compared to the NZX50 and accordingly this serves as a great case study for what we're talking about now. Interestingly, I still think RYM are heavily overpriced relative to the sector and in my opinion are highly likely to underperform for several more years so anyone thinking if you hold for a full decade it must come right, may be skating on very thin ice.

Another great case study is the ATM fiasco. The 3 B's (Beagle Bull and Balance) all took on the case that ATM, (another former very sexy market darling that heaps of people thought you couldn't lose on), was vastly overvalued at $20+...those that listened in both the above case's should be very pleased some on here were posting their non biased objective viewpoints.

Of course with the current market darlings...those who have enjoyed fabulous returns will tell you this time its different. We'll see. I am definitely deeply skeptical because history never repeats, right ;)...and these companies haven't enjoyed super unusually strong tailwinds from Covid, YEAH RIGHT, I know its early but can I please have a Tui to go with that ?

[Beagle]

Main reason for rerating RYM came with rerating of sector and the fact they had very leveraged balance sheet ...where as FPH and MFT dont have such flaws at the moment ...so IMO generalisations dont work perfectly for bluechips

If I remember correctly they had quite a moderately leveraged balance sheet in 2014. Taking on lots of debt has been a more recent thing as they try and drive eps growth. PE's for growth companies back then in the mid 30's were considered very high but that was probably right because long term interest rates were a lot higher...and where do you think those long term interest rates are going in the next couple of years ;)

Suppose I better slink away now before someone wants to kick the dog. Hardly anyone appreciated the unbiased objective posts with RYM and ATM at the time and I am not naïve enough to think its different this time.

[Biscuit]

......Suppose I better slink away now before someone wants to kick the dog. Hardly anyone appreciated the unbiased objective posts with RYM and ATM at the time and I am not naïve enough to think its different this time.

Well, of course, some things never change.

[winner69]

If I remember correctly they had quite a moderately leveraged balance sheet in 2014. Taking on lots of debt has been a more recent thing as they try and drive eps growth. PE's for growth companies back then in the mid 30's were considered very high but that was probably right because long term interest rates were a lot higher...and where do you think those long term interest rates are going in the next couple of years ;)

Suppose I better slink away now before someone wants to kick the dog. Hardly anyone appreciated the unbiased objective posts with RYM and ATM at the time and I am not naïve enough to think its different this time.

you wouldnt want to catch up with that West Ham footballer ......he'd kick you around the kitchen under the pretence of practising

[winner69]

Looks like no re-rating happening

From Sept 20 high of $37.00 the share price is down about 20% -- about the same as forward looking eps from 90 cents (for F21) to 71 cents(for F22) is down

No worries ,,,, all hunky dory at the moment ..... retaining it's blue chip status

[Joshuatree]

Sold the last of mine today, have held for decades from re $3. Two reasons, need funds for an investment outside of equities and FPH is simply in the wrong cycle as the move to value stocks continue , interest rates going up , future cash flows discounted etc, how long or short before it changes again, who knows. Good luck holders and if i get an opp down the road to buy cheaper great if not , no matter.

[winner69]

Sold the last of mine today, have held for decades from re $3. Two reasons, need funds for an investment outside of equities and FPH is simply in the wrong cycle as the move to value stocks continue , interest rates going up , future cash flows discounted etc, how long or short before it changes again, who knows. Good luck holders and if i get an opp down the road to buy cheaper great if not , no matter.

Even Buffett is selling his winners

[bull....]

and has the biggest cash pile in his history , cause theres no value in his eyes to buy anything

[alokdhir]

Here's what Kingfish said about FPH in their latest update

Fisher & Paykel Healthcare (-15%) was not immune from the sell-off in growth companies. In addition, during the month the Recovery RS clinical study was published in the JAMA medical journal, following a pre-print that was released in August 2021. As foreshadowed by the pre-print, this study concludes that in COVID patients continuous positive airway pressure (CPAP) treatment is superior to standard oxygen, while nasal high flow oxygen (FPH's primary product suite) is not necessarily as beneficial in comparison. While we are carefully watching for any adverse reaction to the study, at this stage we are not particularly concerned because of the broader context. Firstly, three other COVID clinical studies were published in the last 12 months that reach a more favourable conclusion for nasal high flow oxygen. Secondly, a much wider body of clinical evidence for acute respiratory illness pre COVID has built up over many years which have more favourable conclusions for nasal high flow oxygen.

Not so good clinical trial outcomes - don't like the sound of that

This study for only UK hospitals have been already known to markets ...why bring this out now ...just because stock tanking ...it has been reported and discussed on this forum too ...FB said wont effect much as UK market is only 4% of revenue plus hospitals dont always follow these recommendations ....so FPH will still flourish when the dust settles ....lol

[Baa_Baa]

.....................
13507

[winner69]

.....................
13507

Not very good on these emoji things but I suppose it means something to a few

[winner69]

This study for only UK hospitals have been already known to markets ...why bring this out now ...just because stock tanking ...it has been reported and discussed on this forum too ...FB said wont effect much as UK market is only 4% of revenue plus hospitals dont always follow these recommendations ....so FPH will still flourish when the dust settles ....lol

Only posted what Kingfish put out yesterday in their update ….they obviously thought it worthy

Anyway thanks for elaborating .,..I had missed the news first time around.

[alokdhir]

[QUOTE=winner69;941105]Only posted what Kingfish put out yesterday in their update ….they obviously thought it worthy

Anyway thanks for elaborating .,..I had missed the news first time around.[/QUOTEStock Takes: What's behind Fisher & Paykel's sinking share price?


16 Sep, 2021

By: Tamsyn Parker

Fisher & Paykel Healthcare's recent share price weakness is being blamed on a change in recommendations for Covid treatment out of the United Kingdom.

The UK's National Institute for Health and Care Excellence (NICE) indicated CPAP therapy should be the standard care for Covid patients rather than Fisher & Paykel's high-flow nasal oxygen (HFNO).

The findings were based on two controlled trials conducted in the midst of the UK's Covid pandemic which found CPAP therapy reduces the need for intubation in Covid-19 patients but HFNO does not provide any benefit over standard low-flow oxygen therapy.

JP Morgan analysis on the issue noted this was a "surprising and disappointing result for F&P". But said at this stage they did not expect clinical guideline in other jurisdictions to follow the UK's lead until the results of the trial were peer reviewed and published.

"The peer view process is likely to help clarify some concerns with the results including whether the relatively high rate of cross-over between the therapy groups or the lack of a clear protocol for escalating patients to intubation was likely to have had any bearing on the results."

JP Morgan estimate the impact on sales to the UK by F&P as a result of the change in guidance will only be small.

"We estimate sales for the UK account around 4 per cent of F&P's pre-Covid revenues from consumables for the humidification of ventilate patients. Given the small size of UK revenues and the fact the previous NICE guidelines recommended against HFNO for Covid patients, we believe the latest alert is unlikely to have a material impact on group earnings."

Harbour Asset Management's Shane Solly said the situation suggested there could be a bit more consolidation to come in F&P's share price.

"It's more raising a question than saying the treatment is no longer valid." But still he said investors had to take the issue seriously.


This was posted in Sept ...which relates to this study and NICE recommendations to NHS hospitals based on this study

[alokdhir]

NICE already had a negative recommendation for HFNO of F&P , now they have given conditional recommendation for CPAP over HFNO while acknowledging the difficulties both at patient level and at hospital level with CPAP ventilation . Only negative is that F&P expected to get positive recommendation for its HFNO which they didn't get ...but still its being seen as beneficial as it is alternative to CPAP ventilation due to patient and hospital reasons .

CPAP is much more difficult on the patient as its much more uncomfortable . Also hospitals need better trained staff for administering it while having both choices available .

Though some CPAP consumables are produced by F&P too .

On the whole not the result F&P wanted as their HFNO didn't get thumbs up as all thought but should not effect them too much .

$ 34 to $ 31 is overreaction IMHO ....CONSOLIDATION CONTINUES !

"The number of organisations who have published evidence based guidelines recommending the use of NHF for COVID-19 patients continues to grow:

World Health Organisation
National Institutes of Health
National Health Commission of the Peoples Republic of China
Surviving Sepsis Campaign
Australia and New Zealand Intensive Care Society
European Respiratory Society
International expert consensus statement
Expert recommendations from a French panel consisting of members from various intensive care societies "

From F&P website ...they have many positive recommendations too :t_up:


This was also posted at that time ...No idea whose recommendations will prevail and which geographies ...USA ones are most important to FPH and Europe next ...Both are positive for HFNO so far ....But it seems like irritant for SP at the moment . This surely helps Bears ...

[newbieinvestor]

FPH hits $27.65.. -4% ..Hmmm...

[alokdhir]

Jan exports data out today ...seems pretty bleak ...its down 45.8 % from last year ...though seasonally Jan is a very low month ...always recorded lowest amount in the whole calendar year ...but this time its 54 Mil from NZ compared to 100 Mil last year ...I know exports from NZ are falling as they are rising from only consumables producer Mexico factories ...

My estimate of Jan revenues is just $ 80 Mil ....need to recalibrate my model after knowing latest actuals ahead ...I think !!

[winner69]

Jan exports data out today ...seems pretty bleak ...its down 45.8 % from last year ...though seasonally Jan is a very low month ...always recorded lowest amount in the whole calendar year ...but this time its 54 Mil from NZ compared to 100 Mil last year ...I know exports from NZ are falling as they are rising from only consumables producer Mexico factories ...

My estimate of Jan revenues is just $ 80 Mil ....need to recalibrate my model after knowing latest actuals ahead ...I think !!

As long as you don't turn it into a model where you enter the 'desired answer' and let the model work back from that;)

[alokdhir]

As long as you don't turn it into a model where you enter the 'desired answer' and let the model work back from that;)

Like your DCF models ....lol

Coming back to your answer about PEs of cyclical stocks being highest at low point of the cycle ...why cant that apply to FPH too while it digests extra ordinary gains ....if growth comes back to regular 12-15 % as they are targeting then it will be back in business SP wise in no time ....2023 its expected in actuals ...so in SP can happen sometime in 2022 as Mr B says market is very forward looking these days ....just thinking aloud mate ...so dont pounce on me please

[winner69]

Like your DCF models ....lol

Coming back to your answer about PEs of cyclical stocks being highest at low point of the cycle ...why cant that apply to FPH too while it digests extra ordinary gains ....if growth comes back to regular 12-15 % as they are targeting then it will be back in business SP wise in no time ....2023 its expected in actuals ...so in SP can happen sometime in 2022 as Mr B says market is very forward looking these days ....just thinking aloud mate ...so dont pounce on me please

That observation /rule of thumb usually applies to real cyclicals (wouldn't say FPH was one of those) and you see PE's range from 7/8 to the high teens

[alokdhir]

That observation /rule of thumb usually applies to real cyclicals (wouldn't say FPH was one of those) and you see PE's range from 7/8 to the high teens

I was referring in concept ...this is called waiting by markets IMO ...market waits for next leg up while keep the SP in limbo ...sideways which seems like high current PE if one doesn't see the whole picture ...if there is certainty FPH will not grow then it goes to 10 + 5 for quality of company and earning ...max maybe 18 ...but at present market thinks it has growth ahead so it gets 30 ....just wondering how market thinks or works ...like u said SP is dictated by major holders ...means its their view as they can change it in a day ...from 30 to 18 PE ...

[bull....]

the 2 yr sideways channel is breaking down ..... timber. lucky i gave the heads up mths ago

[newbieinvestor]

the 2 yr sideways channel is breaking down ..... timber. lucky i gave the heads up mths ago

Good for you bull if you exited in nick of time ..... :)

[Beagle]

Fisher funds have loved on FPH for many years...same for MFT and IFT, the 3 combined making up a staggering 52% of their "diversified" listed Kingfish fund as at the most recent disclosure. We know ATM was once one of their favored market darlings too and they "managed" the level of their investment there at what could best be described as a "glacial speed". (I'll leave others to decide for themselves on whether the lack of diversification amounts to "recklessness").

Thing is, with the entire FF group, listed, unit trust and Kiwisaver funds all having their funds allocated along similar lines, with them formerly being a default Kiwisaver provider they used to get tens of millions of fresh funds coming in every month to support their investment thesis...now not so much.

Its hard to see how a company on a forward PE of about 40 with those earnings augmented by the strong tailwind of Covid can be an opportunity other than for people shorting it.

Is high inflation and much higher interest rates going to bite huge chunks out of the price of high PE stocks this year ? You folks be the judge but for my money I am hiding in value stocks, GARP (growth at a reasonable price stocks) GNE and a very high current allocation to cash and short term deposits. it might be worth noting that cash outperformed the market by 10% this month !

Its very UGLY out there, be careful folks, there's no rule that says you always need to be fully invested in the market.

I warned in January, (emphasis now added), and got the usual angst from others.

[Ggcc]

I warned in January, (emphasis now added), and got the usual angst from others.

I think we know some that have gone all in on this?? I have been finding it overvalued for years and still it kept climbing. I have stayed out for this very reason. People were buying on hype and maybe they knew something I didn't. It will climb to $40-50 at some stage, but I don't know when...... Maybe 2025-30 is anybodies guess.

[Beagle]

I think we know some that have gone all in on this?? I have been finding it overvalued for years and still it kept climbing. I have stayed out for this very reason. People were buying on hype and maybe they knew something I didn't. It will climb to $40-50 at some stage, but I don't know when...... Maybe 2025-30 is anybodies guess.

Yes,...probably best I be diplomatic and not mention the usual suspects name.

I suspect that a LOT of people with their Kiwisaver funds are currently shifting to a cash or conservative fund allocation at present to ride out the storm and the fund managers have no choice but to sell these and similar stocks that are popular with the fundies.

I remain very comfortable with a very high allocation to cash and short term deposits.

[newbieinvestor]

Yes,...probably best I be diplomatic and not mention the usual suspects name.

I suspect that a LOT of people with their Kiwisaver funds are currently shifting to a cash or conservative fund allocation at present to ride out the storm and the fund managers have no choice but to sell these and similar stocks that are popular with the fundies.

I remain very comfortable with a very high allocation to cash and short term deposits.

Beagle, what stocks do you plan to buy when you begin to deploy your high cash allocation?

[Beagle]

Beagle, what stocks will you buy with your high cash allocation?

Bought some Genesis last week, (see GNE thread for reasons) but other than that quite content to sit on my paws for a while, might be quite a while.

SUM is definitely in my sights as soon as there's a new uptrend formed, (very high quality company with excellent management but its hard to make progress in this market so i will wait for a confirmed new uptrend. Other than that I have no plans at present.

[newbieinvestor]

Yes,...probably best I be diplomatic and not mention the usual suspects name.

I suspect that a LOT of people with their Kiwisaver funds are currently shifting to a cash or conservative fund allocation at present to ride out the storm and the fund managers have no choice but to sell these and similar stocks that are popular with the fundies.

I remain very comfortable with a very high allocation to cash and short term deposits.


I think your spot on Beagle that the funds are selling to rebalance their clients portfolios.. I am buying a bit at the moment and can see the fund action....

[newbieinvestor]

Bought some Genesis last week, (see GNE thread for reasons) but other than that quite content to sit on my paws for a while, might be quite a while.

SUM is definitely in my sights as soon as there's a new uptrend formed, (very high quality company with excellent management but its hard to make progress in this market so i will wait for a confirmed new uptrend. Other than that I have no plans at present.

Thanks Beagle.. yeah have to re-evaluate stocks a bit.... as you say its hard to make progress in this market! So remaining on the sidelines and setting on your paws is actually would be a good course of action!

[winner69]

Guru Mark from Craigs offered some advice today -

Corrections, recessions and bear markets… sadly, they’re all a natural part of the business and investment cycle. You only have two choices - make peace with this, or shun risk assets (and miss out on the long-returns they offer).

I think he's saying live with the volatility and hang in there because FPH will make you rich over time

[Muse]

Guru Mark from Craigs offered some advice today -

Corrections, recessions and bear markets… sadly, they’re all a natural part of the business and investment cycle. You only have two choices - make peace with this, or shun risk assets (and miss out on the long-returns they offer).

I think he's saying hand in there

“Hand in” their clients pockets?
Nah lister is a good dude, plenty of time for him.

[winner69]

“Hand in” their clients pockets?
Nah lister is a good dude, plenty of time for him.

ha ha .....changed it I think he's saying live with the volatility and hang in there because FPH will make you rich over time

[Beagle]

Guru Mark from Craigs offered some advice today -

Corrections, recessions and bear markets… sadly, they’re all a natural part of the business and investment cycle. You only have two choices - make peace with this, or shun risk assets (and miss out on the long-returns they offer).

I think he's saying hand in there

Ashley Gardyne (chief investment officer at Fisher funds) singing off the same hymn sheet on the weekend and not for the first time. He was wrong 2 months ago and I think for the short term at least, he will be wrong this time. What he never said is maybe they have the wrong stocks for the new more value focused environment we're now in ? and that question applies right across their portfolio including Barramundi and Kingfish including their large stake in FPH. e.g. Marlin NTA down from $1.30 last Sept to just $1.07 last week and falling further quite fast, ouch ! Never mind, hang in there so we get our annual 1.25% management fees regardless of whether you get badly burned or not. Hmmm...

[newbieinvestor]

Ashley Gardyne (chief investment officer at Fisher funds) singing off the same hymn sheet on the weekend and not for the first time. He was wrong 2 months ago and I think for the short term at least, he will be wrong this time. What he never said is maybe they have the wrong stocks for the new more value focused environment we're now in ? and that question applies right across their portfolio including Barramundi and Kingfish including their large stake in FPH. e.g. Marlin NTA down from $1.30 last Sept to just $1.07 last week and falling further quite fast, ouch ! Never mind, hang in there so we get our annual 1.25% management fees regardless of whether you get badly burned or not. Hmmm...

Wisely spoken Beagle (as usual) I exited the FPH position that I bought at the bottom today as this could have further downside if NZ fund managers rebalance and liquidate for a more value focused environment for the short term... as you say its hard to make progress in this market... Given the US market might correct soon tempted to get into a corrected US growth index tracker for the long term...Any thoughts?

[Beagle]

Wisely spoken Beagle (as usual) I exited the FPH position that I bought at the bottom today as this could have further downside if NZ fund managers rebalance and liquidate for a more value focused environment for the short term... as you say its hard to make progress in this market... Given the US market might correct soon tempted to get into a corrected US growth index tracker for the long term...Any thoughts?

I believe we are just at the very beginning of a real reckoning with the share prices of US technology, small company growth and in particular growth companies with no earnings. I got burned on BOT (automation and biotech ETF and USS (small company ETF) late last year and exited both positions in early 2022. As a bean counter I have to chose to believe that earnings really do matter, (its my life's work) and some of the companies in the US are trading on nothing more than the hope of earnings at some vague undefined very distant year in the future. People are gambling on what's going to be the next big thing as opposed to investing in quality companies with real earnings on sensible metrics.

Not many people realize that the NASDAQ as a whole lost a whopping 90% of its value after the dot.com bust around the start of this century. Cathy Woods ARK fund has been absolutely smashed, down more than 50% from the peak and I think it could go a lot lower yet.

Its hard to make money when the tide is going out fast. My plan with BOT and USS, (both listed here) is to wait for the next uptrend. Bring up a chart and you will see both have broken down through the dark line (100 day moving average). I will stay out for as long as it takes until they break back up through that indicator indicating a new uptrend. Sure you miss the early part of the new uptrend but that's a great way to de-risk a new position in these ETF's. I think a new uptrend is probably quite some time away...possibly a year or two.

Use the same technique for any other company presently in a downtrend is not a silly idea either.
Its a bit of a skill to learn to simply sit in cash and not do anything with it. Many people get tripped up by fancy European cars or boats including myself at times.

Final thought. The war in Ukraine could very easily deteriorate into a much worse situation including the potential for WW3 either conventional or nuclear.

[newbieinvestor]

I believe we are just at the very beginning of a real reckoning with the share prices of US technology, small company growth and in particular growth companies with no earnings. I got burned on BOT (automation and biotech ETF and USS (small company ETF) late last year and exited both positions in early 2022. As a bean counter I have to chose to believe that earnings really do matter, (its my life's work) and some of the companies in the US are trading on nothing more than the hope of earnings at some vague undefined very distant year in the future. People are gambling on what's going to be the next big thing as opposed to investing in quality companies with real earnings on sensible metrics.

Not many people realize that the NASDAQ as a whole lost a whopping 90% of its value after the dot.com bust around the start of this century. Cathy Woods ARK fund has been absolutely smashed, down more than 50% from the peak and I think it could go a lot lower yet.

Its hard to make money when the tide is going out fast. My plan with BOT and USS, (both listed here) is to wait for the next uptrend. Bring up a chart and you will see both have broken down through the dark line (100 day moving average). I will stay out for as long as it takes until they break back up through that indicator indicating a new uptrend. Sure you miss the early part of the new uptrend but that's a great way to de-risk a new position in these ETF's. I think a new uptrend is probably quite some time away...possibly a year or two.

Use the same technique for any other company presently in a downtrend is not a silly idea either.
Its a bit of a skill to learn to simply sit in cash and not do anything with it. Many people get tripped up by fancy European cars or boats including myself at times.

Final thought. The war in Ukraine could very easily deteriorate into a much worse situation including the potential for WW3 either conventional or nuclear.

Thanks! Beagle for being generous with your knowledge and insights:t_up:...


As you mentioned (I have to keep on reminding myself) that the tide has turned and there might not longer be easy money for the taking.... all we can do is to reduce risk profile, increase cash holdings and probably lie in wait :-) as things go more low I was thinking on the lines of USG, but even with their quality portfolio some stocks might still take a hit..so as you mention it make sense to get back when an uptrend but till then have to be patient and cautious...

[Joshuatree]

Yes be cautious,but be ready to buy tech when others are selling.Tesla is entering a perfect storm of growth with the cost of energy going nuts atp.Tech innovation stocks like Tesla(and fph) with its multi prong leading tech ,AI, battery and vehicle construction efficiencies etc are the future.Time to get greedy soon in tech.

[Beagle]

USG a good idea as you're safer in the large growth stocks and many will have real pricing power in this high inflation environment but they're also in a downtrend and its best to wait for a new uptrend and then pounce.

I agree JT but I still think trying to pick bottoms without TA confirmation is usually a messy business.

[alokdhir]

Guru Mark from Craigs offered some advice today -

Corrections, recessions and bear markets… sadly, they’re all a natural part of the business and investment cycle. You only have two choices - make peace with this, or shun risk assets (and miss out on the long-returns they offer).

I think he's saying live with the volatility and hang in there because FPH will make you rich over time

Difference between long term investors and traders and their thinking is easy to see on this thread ...everytime a big correction happens then we hear " I told u so ..." lol

2010 ....FPH was $ 2.42 or so ....how many traders made more money then $ 2.42 turning to todays $ 26.90 ....in say 12 years .... MFT is even more rosier story of long term investing in good growth oriented stocks ...

Long term investors dont worry about daily or even weekly or monthly market conditions ....Markets are down world over ...No one could predict the current War scenarios ....though Inflation fear was on cards ...but FPH and MFT s have gone thru many inflation cycles in last 15 years or so .

Also Guru Lister's advise is saner to sit tight on your long term positions ....dont let markets and different time frame perspective people scare u ....I fully agree

[bull....]

Also Guru Lister's advise is saner to sit tight on your long term positions ....dont let markets and different time frame perspective people scare u ....I fully agree

what's lister going to tell people if FPH goes back to $ single digits ? ... sit tight she be right lol

[winner69]

Hey Beagle - have you noticed the FPH share price is only down by how much the market is down.

The market still doesn't seem to have factored in the declining profit bit yet

Or the other way the market has allowed for the declining profits but as yet to re-rate FPH (sentiment still strong)

Whatever methinks somewhere closer to 20 bucks is on the cards in a month or so.

[SPC]

Any newbie type investor seeking advice on this forum is in the wrong place, and at the wrong time, particularly if they think there is easy money to be made.
I suggest you seek advice elsewhere.

[Joshuatree]

Except hold forever "blue chip" stocks are becoming endangered and can spend years doing nothing ,RYM for example has been one of Craigs must haves in their model portfolio and all stocks in their various sectors run in cycles , the recent switch from growth to value etc.Listers underlying message is "it's all too hard,leave it to us,we can do it all for you for 1% a year (plus re 1% on every buy and sell).That's his real job.

[Beagle]

Except hold forever "blue chip" stocks are becoming endangered and can spend years doing nothing ,RYM for example has been one of Craigs must haves in their model portfolio and all stocks in their various sectors run in cycles , the recent switch from growth to value etc.Listers underlying message is "it's all too hard,leave it to us,we can do it all for you for 1% a year (plus re 1% on every buy and sell).That's his real job.

Agreed, RYM has dramatically underperformed the NZX50 for the last 8 years and is set to extend that record to at least a decade in my opinion.
Winner and I called it as significantly overvalued in 2014 and said stay out and we have been bang on the money.
Yes MFT and FPH have stellar track records of creating value for long term shareholders just like RYM did before it entered a really lengthy period of underperformance.
Are FPH and MFT a BUY here for fresh capital coming to the market ? I would argue NO but I can also understand long term holders not wanting to sell. I guess it all comes down to one's own unique investment perspective.

[Joshuatree]

Craig's are low risk conservative for people (older?) who want that,they serve them well.

[winner69]

Agreed, RYM has dramatically underperformed the NZX50 for the last 8 years and is set to extend that record to at least a decade in my opinion.
Winner and I called it as significantly overvalued in 2014 and said stay out and we have been bang on the money.
Yes MFT and FPH have stellar track records of creating value for long term shareholders just like RYM did before it entered a really lengthy period of underperformance.
Are FPH and MFT a BUY here for fresh capital coming to the market ? I would argue NO but I can also understand long term holders not wanting to sell. I guess it all comes down to one's own unique investment perspective.

At least you didn't mention A2 ---- FPH could do A2 if growth comes to an end and profits slip and market re-rates them to sensible levels

[alokdhir]

Since when HGH such a low PE and High Dividend value stock starts going down 5% from almost rock bottom 2.20 ?

So its not about valuations so much at the moment but lack of buyers and some scared sellers which is making market pricing very inefficient ....this is surely not the time to panic and draw conclusions about markets and valuations ...IMHO

[Muse]

Are FPH and MFT a BUY here for fresh capital coming to the market ? I would argue NO but I can also understand long term holders not wanting to sell. I guess it all comes down to one's own unique investment perspective.

It probably also matters a little bit if you are an tax paying trader or capital account investor, and if you are the later, your knowledge of risk tolerance for staying on the right side of the IRD. There will have been a multitude of investors selling, crystalizing strong capital gains, not paying tax on those gains, then repurchasing those shares at some point for lower prices, when the underlying commercial rational for holding those shares may not have changed (IE, many of the the companies still paid their divies, still executed on their growth plan, etc). That is a risky pattern of behaviour should the IRD come calling. Something acknowledged traders won't have to worry about and get to claim deductions on their losses in a bear market. There are clear taxation differences between a trader and an investor, because they clearly operate differently. Sometimes the underlying commercial rational for holding a share does change, and warrants a bonafide review of the dominant purpose of holding that asset.

[Beagle]

At least you didn't mention A2 ---- FPH could do A2 if growth comes to an end and profits slip and market re-rates them to sensible levels

Our mate Coutts is known to be involved in this and of course is infamous for his massive stake and losses on A2.

[Rawz]

I don't know why the FPH and ATM comparison keeps being brought up by you two old dogs but its laughable.. there is zero comparison.

FPH has a global market. ATM is heavily reliant on China.
Demand for FPH products is growing with ageing populating in the west and post covid complications. ATM is dealing with a declining birth rate in China and a push for breast feeding.
FPH is a proven grower of EPS over a very long time. ATM is a flash in the pan in comparison.

Guess you're just bored and fishing for a reaction. Well you hooked me in i guess lol

[winner69]

Yep, a bit bored ---- syndicate continually being outbid at the Karaka yearling sales ..... world affairs not stopping millions being spent

Not comparing the companies A2 and FPH ..... just trying to highlight how market sentiment can change when high flyers show slowing growth and declining profitability and go out of favour .... can be brutal

[winner69]

FPH share price back to where it was about 2 years ago ..... like February 2020

[alokdhir]

FPH share price back to where it was about 2 years ago ..... like February 2020

Not just FPH ...even MFT given up all its 2021 gains ....SUM ...

But very surprised by HGH being sold ...it has low P/E ...High Dividend ... Growth projected ahead ...still not loved that dearly ...Maybe its just panic or need of cash or over extended positions

Just read few opinions on market watch.com ...they opining that markets may bottom out in a week or so when all bad news out and in the prices ...I just wish I had more funds to invest as find some stocks super attractive ...I know they can go further down but still would have started buying already ...only if had more funds ....Any idea about RBNZ PIN ?? :p

BTW ....I remember from last March 2021 ...U mentioned solid support around 25.94 for FPH ...hopefully it works still ...lol

[Rawz]

FPH share price back to where it was about 2 years ago ..... like February 2020

And has FPH advanced its business more or less than 2 years ago?

Some real opportunities out there to buy into businesses that are priced the same as years gone by. Was looking at FB (or Meta as it is now known..) it is currently priced at Oct 2018 levels. FB more or less advanced than 3.5 years ago?

Where is the bottom? Nobody knows

[winner69]

And has FPH advanced its business more or less than 2 years ago?

Some real opportunities out there to buy into businesses that are priced the same as years gone by. Was looking at FB (or Meta as it is now known..) it is currently priced at Oct 2018 levels. FB more or less advanced than 3.5 years ago?

Where is the bottom? Nobody knows

Does that actually mean anything?

[Rawz]

Does that actually mean anything?

Probably not in this market

[Beagle]

And has FPH advanced its business more or less than 2 years ago?

Some real opportunities out there to buy into businesses that are priced the same as years gone by. Was looking at FB (or Meta as it is now known..) it is currently priced at Oct 2018 levels. FB more or less advanced than 3.5 years ago?

Where is the bottom? Nobody knows

More too it than that. A better question is how long are the Covid tailwinds that have been blowing fiercely in FPH's favour going to last ? Another 2 years or less ? What's the unassisted Covid earnings then ? What are fair metrics going to be in the future with the lower non Covid assisted growth and higher interest rates ?

FPH shares have been in a downtrend for the last 18 months and the market is still trying to work all this out.
I would suggest TA is probably far more useful than FA in the circumstances...
Winners post #2341 is very pertinent. Plenty of people thought they could bottom pick successfully when ATM was falling and almost all of them got badly burned.

TA is your best friend in this crazy market.

[bull....]

downgrade to margins not surprising in an inflationary environment

[winner69]

Suppose this is a profit downgrade

H2 sales down about 25% v pcp .... ouch ..... and full year revenues about 5% down om market expectations

And that 2.2% points drop in gross margin takes millions off the bottom line ..... double ouch

Never mind ....in 10 years time we'll say ] 2022 just had a few hiccups

https://www.nzx.com/announcements/389295

[winner69]

Todays announcement not flagged PRICE SENSITIVE so we should be OK share price way

[BlackPeter]

Todays announcement not flagged PRICE SENSITIVE so we should be OK share price way

I read that as revenue and earnings both down by 3 to 4 % compared to recent assumptions. Not a biggie ... but yes, might keep the SP down for a little bit longer ...

Analysts on marketscreener see earnings bottoming out in 2023 (i.e. they think its likely to get worse before it gets better) ...

[kiora]

https://www.marketscreener.com/quote/stock/FISHER-PAYKEL-HEALTHCAR-6492630/financials/
And NP will be 32% higher in 2023 compared to 2020 taking out Covid effect on results. Over Covid period tucking away some super profits.
NP still growing at 10 % compounding regardless of Covid from 2020 to 2023
Expected NP growth 2023 to 2024 back up to 16%

[JohnnyTheHorse]

Todays announcement not flagged PRICE SENSITIVE so we should be OK share price way

Market seems to disagree with them! Good wee short to help drive the price down this morning... gee might have to flip long very soon.

[Rawz]

W69 and Beagle were right after all. Good work fellas

[winner69]

I read that as revenue and earnings both down by 3 to 4 % compared to recent assumptions. Not a biggie ... but yes, might keep the SP down for a little bit longer ...

Analysts on marketscreener see earnings bottoming out in 2023 (i.e. they think its likely to get worse before it gets better) ...

Using marketscreener F22 NPAT of 406m and adjusting for lower sales and the margin impacts they talk about F22 npat could be as low as 350m to 360m ....that being about 13% less .... not a 'not a biggie', maybe a 'little 'biggie'

So EPS could be around 62 cents ..... so PE keeping to the 40 level.

[Beagle]

Suppose this is a profit downgrade

H2 sales down about 25% v pcp .... ouch ..... and full year revenues about 5% down om market expectations

And that 2.2% points drop in gross margin takes millions off the bottom line ..... double ouch

Never mind ....in 10 years time we'll say ] 2022 just had a few hiccups

https://www.nzx.com/announcements/389295

We tried to warn them just like we did with RYM 8 years ago that's been a dog ever since and Balance, Bull and I tried to warn people about ATM when it was over $20. Ignoring TA in this market and having excess hubris about one's fundamental assessment of the situation is almost guaranteed to be a really confronting and painful experience especially in these crazy times.

If the PE is still 40 as per your numbers there's PLENTY more potential for this decline to bite really hard.

[newbieinvestor]

We tried to warn them just like we did with RYM 8 years ago that's been a dog ever since and Balance, Bull and I tried to warn people about ATM when it was over $20. Ignoring TA in this market and having excess hubris about one's fundamental assessment of the situation is almost guaranteed to be a really confronting and painful experience especially in these crazy times.

If the PE is still 40 as per your numbers there's PLENTY more potential for this decline to bite really hard.

Well done Beagle & W69!!:t_up: Thanks!

Yeah exited out on Beagles earlier post and also seeing the lower export data ....

Well I expect to see Fisher Fund's Sam Dickie NZH article soon.. :) similar to this...
https://www.stuff.co.nz/business/127589417/fisher--paykel-healthcare-boomed-during-the-pandemic-what-is-the-outlook-now..

[winner69]

shareprice making a great recovery after early 'panic'

come 5 o'clock probably be UP for the day

[Bjauck]

We tried to warn them just like we did with RYM 8 years ago that's been a dog ever since and Balance, Bull and I tried to warn people about ATM when it was over $20. Ignoring TA in this market and having excess hubris about one's fundamental assessment of the situation is almost guaranteed to be a really confronting and painful experience especially in these crazy times.

If the PE is still 40 as per your numbers there's PLENTY more potential for this decline to bite really hard. RYM's SP from 31/Mar/14-31/Dec/19 increased by an average 11% pa (about the same increase as for the NZX50c.) It's SP has been an underperformer in the Covid era.

[winner69]

OK Ferg

I've revisited revenue assumptions and come up with some 'realistic' forecasts. These being flat in F22 and then returning to much the past trajectory. Gives about 11% pa growth over the next 10 years.

Assumed margins returning to 66% of sales and assumed realistic expense increases. Reality check is EBITDA margin increasing from 40% of sales to 44% ...hmmm. Ongoing capex as guided by FPH. Discount rate 8.5%.

For what its worth that gives a DCF value $28.34

.........


Oh dear ....all those assumptions out big time ...sales / margins the lot

So the $28.34 DCF is history ......checked the assumptions on the prior one that came to $24.68.

That's shot to pieces as well

Will play around some time but it looks like starting from a lower bases (F22) and less bullish growth and a question market over margins and and an increased discount rate I imagine a DCF value will come in well under 20 bucks

[winner69]

From Market Close on BusinessDesk

Nothing like a fundie modestly saying that he is a guru

.

Greg Smith, head of retail at Devon Funds, said his fund had been underweight on F&P Healthcare for a while, in anticipation of falling future earnings. “The company had always said to watch hospitalisation rates for a read on earnings,” he told BusinessDesk.

“Well, that light has been flashing red for some time now.” Hospitalisation rates in the United States were down about 80% from their peak and those cases that were hospitalised stayed half as long due to less severe illness, he said. Smith said this signalled the covid era was gradually coming to an end and the stocks which benefited from the pandemic would begin to normalise. “

It is ironic that the day Fisher & Paykel falls 8%, is the same day the government effectively consigned vaccine mandates to history,” he said..

[Beagle]

Waiting for Sam Dickie to come out with the inevitable line they use every time one of their big picks does badly..."this current pullback is an opportunity"

Down from about $33 at the start of this quarter to $25.70 is more than a 22% decline in less than 3 months ! You can definitely call that a bearish trend that's well entrenched :eek2:

More pain to come I'd wager. Never buy in an established and confirmed downtrend without TA confirming a bottoming process has already been formed ! Makes sense to wait for at the very least a break up through the 30 day MA to indicate the possibility of a new uptrend and that could be quite some time away.

I suppose long term investors won't care if it goes down to under $15, they've still made heaps so it doesn't matter.

[iceman]

RYM's SP from 31/Mar/14-31/Dec/19 increased by an average 11% pa (about the same increase as for the NZX50c.) It's SP has been an underperformer in the Covid era.

But that is only of interest to long term investors, not the traders that are in and out of stocks on a frequent basis. For an alternative view look at Kiora's post 2352 above.
Just prior to COVID FPH was at around $ 22.70 and was under $10 only 6 years ago. After recent falls, SP is still 10% ahead of where we were at start of COVID and arguably a much stronger business. Compare that to the much commented on OCA, that started COVID period at around $ 1.30 and is currently sitting at $1.05.
The freight costs are indeed a big hit for FPA, like they will be for almost every business operating and every single household will be hit to the same or higher degree. Hardly unexpected.

COVID was a highly unusual period for ALL stocks and FPH made super profits during that time. But thanks for the "warnings" about the obvious, that COVID super profits were not going to last forever. I'm sure that has been helpful for traders. For many of us that have been in this share a long time, it was pretty obvious all along. It was an unexpected bonus.

New investors should be careful taking posts on ST as gospel. DYOR and stick to your strategy if you are happy with it.

[iceman]

I suppose long term investors won't care if it goes down to under $15, they've still made heaps so it doesn't matter.

If the SP was heading for $ 15, it would mean the business was fundamentally broken or the market had completely lost faith in FPH. I see neither.

[Rawz]

$15 sp too low Master Beagle. Revenue is only reverting to the mean if you plot it out.
Ignoring FY21 outlier year the revenue trend line is fairly consistent up up up.

Margins hurt by shipping costs. That will rectify itself. Not saying i am buying now... I will take your advice with the 30 day MA trick cheers

[Muse]

Waiting for Sam Dickie to come out with the inevitable line they use every time one of their big picks does badly..."this current pullback is an opportunity"

Down from about $33 at the start of this quarter to $25.70 is more than a 22% decline in less than 3 months ! You can definitely call that a bearish trend that's well entrenched :eek2:

More pain to come I'd wager. Never buy in an established and confirmed downtrend without TA confirming a bottoming process has already been formed ! Makes sense to wait for at the very least a break up through the 30 day MA to indicate the possibility of a new uptrend and that could be quite some time away.

I suppose long term investors won't care if it goes down to under $15, they've still made heaps so it doesn't matter.

Hahaha - dear ol dickie. I remember him ramping it at 36 bucks.

Nek minute…

[Beagle]

RYM's SP from 31/Mar/14-31/Dec/19 increased by an average 11% pa (about the same increase as for the NZX50c.) It's SP has been an underperformer in the Covid era.

You've tried to pick some arbitrary period of time to suit your own thesis. Winner and I called RYM significantly overpriced relative to its peer in early 2014 and warned of a protracted period of underperformance relative to the only other sector player at the time which was SUM. Since then I have repeated my view over the years several times.
RYM share price on 31 March 2014 was $8.75 and its is now $9.76 a capital gain of only 11.5% in eight years in a rampant bull market for housing, enough for anyone to tear their hair out in frustration.
As expected and foretold this has dramatically underperformed SUM in those eight years which has risen from $3.59 to $11.55, more than tripling its share price.
This is a great example of people simply paying too high a multiple for RYM because of former market darling status and what happens to your returns afterwards over a long period of time. This also has the very real potential to turn into a full decade of underperformance for RYM in my opinion.

To be clear folks, I am not valuing FPH at $15...I am simply stating that this downtrend has real legs and momentum and its very dangerous to apply new capital in a steep downturn without any TA signals confirming a bottom is in. I'm also stating that I think the market darling status with the PE is very much alive and well still with FPH and we have all seen what happens when companies lose market darling status...another great recent example is ATM.

Obviously, Iceman, Covid has provided headwinds for some companies and tailwinds for others and comparing the two is about as helpful as comparing the price of apples and pears but for what its worth I backed the truck up on OCA right after the lockdown started at about 70 cents so its still up 50% from then.

[Beagle]

...deleted...

[Rawz]

You'll have to refresh my memory on that one and quote the post and its date. For the life of me I can't think of any logical reason why I would bother ramping something I didn't own, that's completely out of character for me lol

Hes talking about Sam Dickie.

But when i first read it i thought he was talking about you and calling you a dick lol
Thought it was a bit harsh of FM :laugh:

[Muse]

You'll have to refresh my memory on that one and quote the post and its date. For the life of me I can't think of any logical reason why I would bother ramping something I didn't own, that's completely out of character for me lol

Not you beagle -sam dickie! He’s had a few articles out including one when it fell from 36 bucks and he was out there saying what sensational buying it was at 36 bucks

[Muse]

Hes talking about Sam Dickie.

But when i first read it i thought he was talking about you and calling you a dick lol
Thought it was a bit harsh of FM :laugh:

No no no ! Lol. I probably need to work on my communication skills. Ive never called someone a dickie before

[Beagle]

Hes talking about Sam Dickie.

But when i first read it i thought he was talking about you and calling you a dick lol
Thought it was a bit harsh of FM :laugh:

Thanks, I initially gathered the same impression and was bewildered as to why I would bother to ramp a share I don't own lol

All good FM. Yes...unfortunately fund mangers who build a 50% stake around just three shares also build themselves a position that its extremely hard to extricate themselves from without losing serious face and affecting the share price as well. Few take ownership of their mistakes and so they trot out the age old line about this being a wonderful opportunity to accumulate more at a deeply discounted price, or similar words to that effect.

Did he ever take ownership of the fact they didn't extricate themselves well from the ATM share price collapse ?, if so I can't recall it.

[percy]

The trust I am a trustee of has owned FPH and EBO since before 1991.
The dividend yield on cost must be getting well near or over 100%
I guess there have been a good few uptrends,downtrends and sideways movements in that time.?
So what...lol.
I can not recall FPH market cap when the trust bought into FPH,but I well remember Ebos's was just over $2.5 million.
Grown a bit,as their market cap is now $7.35 billion.
Not a lot of people know that..!

[alokdhir]

Mark Lister, head of private wealth research with Craigs Investment Partners, said the local market was the odd one out with others overseas increasing and providing positive leads.
"Fisher and Paykel is such a big company in the New Zealand market and when it has a bad day it's hard for the index to hold on. The rest of the market was okay.
"Fisher and Paykel still fits the bill as a blue-chip world-class company and there's no concerns about the business. Its product enjoyed soaring demand for Covid hospitalisation, and with everyone getting back to normal, that's not good news for the company," Lister said.
"A fall in short-term revenue and sales is something investors have to appreciate and it doesn't change the long-term story for Fisher and Paykel."

Guru Lister has summed it up very well for actual long term investors .

I think this process will help it coming back to original uptrend soon .... But still some way to go ...sideways or more downside traders will know better .

Still eps will be around 75 Cents ....next year guidance if provided will set new path ...till then enjoy the ride ...lol

[Balance]

High PE stock - cannot disappoint as EPS shrinkage also results in PE contraction.

[carrom74]

I hate to say it . COVID is still around and new variants popping out every now and then.As Bloomfield said today … common flu is evident and known from the 11th century . Covid is just two years old…FPH has invested heavily in R&D .. for long time investors - just a blip.You never know what 2023 has in store for the world eh?

[Beagle]

My opinion is the debate is really all about are they a good buy now ? Just as what people originally paid for RYM (~ 25 cents on a split adjusted basis) or ATM a few cents and how they had made squillions is of no relevance to people making decisions today about those shares so it is with FPH and what someone paid in 1991.

People making decisions when ATM was $21 or whether RYM was a great buy at $9 8 years ago where relevant discussion points at those times and so is this a relevant subject at this time as we begin the process of seeing less usage of FPH products as Covid hopefully starts to abate.

Not everyone is aware of the risks of buying in a confirmed downtrend and the risk of how far that can extend if you get loss of earnings growth resulting in not only lower earnings but a much lower applicable multiple because growth has tailed off, exacerbated by higher underlying interest rates.

If eps is about 60 cps and the PE comes back into the mid 20's, then yeah, $15 is quite plausible. Couldn't happen...lets see shall we.

[iceman]

Obviously, Iceman, Covid has provided headwinds for some companies and tailwinds for others and comparing the two is about as helpful as comparing the price of apples and pears but for what its worth I backed the truck up on OCA right after the lockdown started at about 70 cents so its still up 50% from then.

Beagle don’t take me wrong. It is great to have the views you and winner have about FPH discussed here. It should be what ST is about. It would be even better with a little less of the alarmist tone, particularly for new-ish investors. I just have a very different approach and am happy with it.

You made comparisons with FPH, RYM and ATM in your post when talking about the warnings. ATM situation has no relevance to FPH in my view. A bit like my reference to OCA.

I also bought quite a few OCA when it crashed, in the mid fifties. But unusually for me, I unloaded them all a few months ago and am not intending to buy back in at this stage. But wrong thread for that discussion

[Beagle]

Iceman RYM and ATM are very different companies I certainly agree with that. The reason I bring them up as examples is they also both achieved top notch "market darling" status...actually I would even go so far as to call it "cult" status and many people claimed you simply couldn't go wrong buying them despite trading on extended multiples of a forward PE of about 40 just like FPH is today.

I see a lot of similarities with the claims being made about FPH today and they're trading on about the same multiple as RYM and ATM were when the earnings growth of those companies also started slowing. I wouldn't say its alarmist and I note its the biggest and one of the most liquid companies on the NZX so I doubt a good robust debate on here would make any difference to the share price. I get it that's uncomfortable for long term holders but a good robust discussion is what makes this place worthwhile. At the end of the day people can make up their own minds.

I sold most of my OCA at prices far higher than what are prevailing today and have been completely transparent and honest about my reservations despite still holding a 6 figure sized stake. That's also made for a good robust discussion on that thread but to his credit Maverick despite having a huge position never complains about how robust things get in there, he's an absolute gentleman even if I'm occasionally excessively dogmatic.

I guess in my defense I have always liked debating things since being on the high school debating team and I know Beagles likes to bark so I probably chose my user name really well lol

[iceman]

I guess in my defense I have always liked debating things since being on the high school debating team and I know Beagles likes to bark so I probably chose my user name really well lol

There is no defence needed mate. I greatly value your input and opinions and the fact we debate them by putting forward our opposing views when they arise. It is what ST is about, differences in opinions and different investment approaches. There is no right or wrong way in this game and what suits one may not suit another, as we both know.

[kiora]

Interesting posts :)
Most posters just articulating why they don't own FPH and will never own it?
Because its always too expensive?

That they would rather own WHS,HGH etc etc ???
When they are supposedly looking for yield while interest rates predicted to rise? Then capital value erodes?

While the fewer saying they own FPH/have always owned it and their long term view of the business hasn't changed. That FPH share price follows earnings.

[alokdhir]

Again to restate recent price action history of FPH for the benefit of non holders but expert analysts of FPH ...

In Jan 2020 it started the year at $ 22.20 ...pre covid times ...expecting an eps 50 cents for current year and revenues of $ 1.19 B

It was doing around 10% revenue growth and 20% NPAT growth recently thus SP was rising around 15-20% YOY

So if covid had not invaded us then FPH would have done $ 1.32 B revenues and 60 cents eps in 2021 and $ 1.45 B and 72 cents in 2022 ...and thus SP would have been roughly Jan 2020 as recorded $ 22 ...Jan 2021 around $ 25 and Jan 2022 around $ 28 -$ 30 ...for a revenue of $ 1.45 B or so and eps of 70 cents or so
And stock would have been following a set uptrend with 15% growth and no one would have questioned its valuations and business

But now due to Covid we got 2021 revenues as $ 1.97B and Eps of 91 cents instead and now in 2022 we will get $ 1.70 B and 75 Cents ...

IMO 2022 figures are better then original track no covid results ...should have been roughly 1.5 B and 70 cents but we getting 1.7B and 75 cents ...original track SP would have been around $ 28-$ 30 depending on current rates and equity valuations

So far nothing majorly different then pre covid or post covid results ...just still some extra in revenues thus eps

Now most important question is will FPH return to normal growth path from 2023 with clocking positive revenues over 2022 ??? I know they have changed that to 12% revenue growth expectations from earlier 10%

I am not able to answer that question but maybe people can attempt to discuss this instead of day to day SP ....this view will majorly effect future SP of FPH ahead ...as soon SP need discount next years numbers ...which can be 90 cents eps or 65 cents eps depending on your views

Covid type big disruption of SP of FPH will take time to normalise ...once it reverts back to any repeatable and understandable path it will be market darling again

[iceman]

Thanks alokdhir for taking the time to put the numbers up clearly. It is what I was trying to say in a few words but yours is very precise. FPH in my view is quite possibly a stronger business than we were expecting at this stage, pre COVID. Their name, products and service has gained huge attention all around the World in the last couple of years and tens of thousands of medical professionals have been trained to use it and become familiar with it.
No marketing or advertising can do that sort of work in such a short space of time and it is invaluable to FPH in my view.
As always, a happy holder.

[bull....]

breakdown of channel gives $20 as a not unreasonable t/a target

[alokdhir]

breakdown of channel gives $20 as a not unreasonable t/a target

Very possible and desirable too from longer term perspective ...It need become attractive to stronger hands for that to happen it need keep falling

Also as Omicron version of Covid has made respiratory support almost not required in hospitals so it will be reasonable to assume that Covid advantage to FPH revenues is almost gone from second half of the year .

If they can organically increase next half year revenues over current ones without any further covid help eg another version like Delta which required big respiratory support help then I think SP will be out of the woods ...they need to start ramping up the new contacts and customers they have made in the last two covid years ...now is the time to show the world what that can mean as they are not just one trick pony ...they have lots to sell other then just covid treatment

[bull....]

Very possible and desirable too from longer term perspective ...It need become attractive to stronger hands for that to happen it need keep falling

Also as Omicron version of Covid has made respiratory support almost not required in hospitals so it will be reasonable to assume that Covid advantage to FPH revenues is almost gone from second half of the year .

If they can organically increase next half year revenues over current ones without any further covid help eg another version like Delta which required big respiratory support help then I think SP will be out of the woods ...they need to start ramping up the new contacts and customers they have made in the last two covid years ...now is the time to show the world what that can mean as they are not just one trick pony ...they have lots to sell other then just covid treatment

resmed has similar problems

Sleep treatment giant ResMed says rising freight costs and semiconductor chip shortages are curbing its ability to meet surging global demand for its devices

https://www.smh.com.au/business/companies/very-very-challenging-costs-hit-resmed-as-demand-soars-20220323-p5a77e.html

[couta1]

Very possible and desirable too from longer term perspective ...It need become attractive to stronger hands for that to happen it need keep falling

Also as Omicron version of Covid has made respiratory support almost not required in hospitals so it will be reasonable to assume that Covid advantage to FPH revenues is almost gone from second half of the year .

If they can organically increase next half year revenues over current ones without any further covid help eg another version like Delta which required big respiratory support help then I think SP will be out of the woods ...they need to start ramping up the new contacts and customers they have made in the last two covid years ...now is the time to show the world what that can mean as they are not just one trick pony ...they have lots to sell other then just covid treatment Far too intelligent an answer in reply to a downramping trading troll. I notice the executive director of the Malaghan Institute said Covid and its variants are not going anywhere for the next 50 yrs, you can expect a rampant mutant outbreak at any time (They are in the process of developing a kiwi non mRNA vaccine cheaper than the Pfizer costs, sounds good)

[alokdhir]

resmed has similar problems

Sleep treatment giant ResMed says rising freight costs and semiconductor chip shortages are curbing its ability to meet surging global demand for its devices

https://www.smh.com.au/business/companies/very-very-challenging-costs-hit-resmed-as-demand-soars-20220323-p5a77e.html

If u read recent FPH announcement fully ...it has said that OCA masks are doing better then last 6 months INSPITE of HARDWARE shortage ...Resmed is having Philips recall boom in sales and demand which they are unable to cash due to manufacturing troubles

Fright cost increase FPH offset to a great degree in last 6 months report by better consumables mix ...it still had 190 basis point effect on GP ...this they have been consistently flagging since covid started ...so I am not too worried ...last 6 months NP margins actually went up inspite of higher freight costs

This time lower NZD and more consumables sales will more then offset reduced GP margins due to freight thus keeping NP margins similar ...after all NP matters more then GP

[Bjauck]

You've tried to pick some arbitrary period of time to suit your own thesis. Winner and I called RYM significantly overpriced relative to its peer in early 2014 and warned of a protracted period of underperformance relative to the only other sector player at the time which was SUM. Since then I have repeated my view over the years several times.
RYM share price on 31 March 2014 was $8.75 and its is now $9.76 a capital gain of only 11.5% in eight years in a rampant bull market for housing, enough for anyone to tear their hair out in frustration.
As expected and foretold this has dramatically underperformed SUM in those eight years which has risen from $3.59 to $11.55, more than tripling its share price.
This is a great example of people simply paying too high a multiple for RYM because of former market darling status and what happens to your returns afterwards over a long period of time. This also has the very real potential to turn into a full decade of underperformance for RYM in my opinion.

To be clear folks, I am not valuing FPH at $15...I am simply stating that this downtrend has real legs and momentum and its very dangerous to apply new capital in a steep downturn without any TA signals confirming a bottom is in. I'm also stating that I think the market darling status with the PE is very much alive and well still with FPH and we have all seen what happens when companies lose market darling status...another great recent example is ATM.

Obviously, Iceman, Covid has provided headwinds for some companies and tailwinds for others and comparing the two is about as helpful as comparing the price of apples and pears but for what its worth I backed the truck up on OCA right after the lockdown started at about 70 cents so its still up 50% from then.
No I didn’t pick an arbitrary period of time. In The post to which I was responding you had said “We tried to warn them just like we did with RYM 8 years ago that's been a dog ever since…”

So the starting point for the period was 8 years ago. I used to hold RYM so I had the 31/Mar/2014 SP on file. RYM SP has not performed as a “dog” for most of the period since then. However for a Beagle maybe performing as a dog is actually a compliment :t_up:

Sure, SUM’s SP hyper performed in comparison to RYM’s in the last 8 years….

[Rawz]

We need a guru to post a graph of 5 (or 10) year revenue CAGR which shows FY21 outlier and forecast FY22 still ahead of the 5 year CAGR (2015-2020)

Maybe someone like W69 or Ferg has this readily available on a spreadsheet somewhere ;)

[Beagle]

No I didn’t pick an arbitrary period of time. In The post to which I was responding you had said “We tried to warn them just like we did with RYM 8 years ago that's been a dog ever since…”

So the starting point for the period was 8 years ago. I used to hold RYM so I had the 31/Mar/2014 SP on file. RYM SP has not performed as a “dog” for most of the period since then. However for a Beagle maybe performing as a dog is actually a compliment :t_up:

Sure, SUM’s SP hyper performed in comparison to RYM’s in the last 8 years….

As Winner and I predicted it would. Anyway...back to this current market darling...

[Rawz]

When comparing FPH to other unrelated high P/E companies it's actually better for the mind and soul if you compare against Amazon and Costco. Always trading on high multiples (like FPH) and if you stayed invested in those companies over the years you would be multi millionaire with many bags.

Dont compare against RYM and ATM.

So debate over, long term investors are still going to reap the rewards over the next 5, 10, 15.... years ;)

[couta1]

When comparing FPH to other unrelated high P/E companies it's actually better for the mind and soul if you compare against Amazon and Costco. Always trading on high multiples (like FPH) and if you stayed invested in those companies over the years you would be multi millionaire with many bags.

Dont compare against RYM and ATM.

So debate over, long term investors are still going to reap the rewards over the next 5, 10, 15.... years ;) Pure traders and traders pretending to be investors on here (Its obvious to all who they are) don't understand these concepts.

[winner69]

We need a guru to post a graph of 5 (or 10) year revenue CAGR which shows FY21 outlier and forecast FY22 still ahead of the 5 year CAGR (2015-2020)

Maybe someone like W69 or Ferg has this readily available on a spreadsheet somewhere ;)

Here it is rawz .....Last 20 years sales in table below with growth rates over different periods

Make of it what you will

[BlackPeter]

We need a guru to post a graph of 5 (or 10) year revenue CAGR which shows FY21 outlier and forecast FY22 still ahead of the 5 year CAGR (2015-2020)

Maybe someone like W69 or Ferg has this readily available on a spreadsheet somewhere ;)

Here are the data (the yellow stuff is obviously based on estimates):

13637

DYOC (do your own chart :);

Based on the last 10 years would this be an Earnings CAGR of 24.8 (Great!) and an average PE of 77 (Ouch)

Easy to see that Earnings are steady rising (with the exeption of 2022 returning to the steady growth after an exceptional 2021).

Forward CAGR would be 13.4 and forward PE 34. Still not cheap, but quite in the normal range (for FPH).

Obviously .. if the market decides to contract PE's ... or if the correction shoots over (well - under ;) ) then it is up to anybody's guess where the SP might bottom out.

Discl: holding, but not yet "full in". Still waiting for this special (which may or may not come) to keep accumulating.

[alokdhir]

Here it is rawz .....Last 20 years sales in table below with growth rates over different periods

Make of it what you will

U r actually so great with graphs mate ...U can produce on demand anything ...:t_up:

[alokdhir]

Seeing both W69 sales data and BP's eps data ...its not too much away from where it should be ...maybe reaching $ 38 in August 2020 was total over exuberance and Covid fear of the market .

At present under current environment of rates and risk appetite ....FPH fair value should be $ 25-28 band ...with market eagerly looking forward to whether FPH is able to convert its recent advantage of new contacts and customers into numbers which actually move SP

It all boils down to Management quality and ability to translate leads to actuals . IMO FPH will do 2-5 % better then before in next 5 years .

[bull....]

If u read recent FPH announcement fully ...it has said that OCA masks are doing better then last 6 months INSPITE of HARDWARE shortage ...Resmed is having Philips recall boom in sales and demand which they are unable to cash due to manufacturing troubles

Fright cost increase FPH offset to a great degree in last 6 months report by better consumables mix ...it still had 190 basis point effect on GP ...this they have been consistently flagging since covid started ...so I am not too worried ...last 6 months NP margins actually went up inspite of higher freight costs

This time lower NZD and more consumables sales will more then offset reduced GP margins due to freight thus keeping NP margins similar ...after all NP matters more then GP

my post of the news article was just in reference to my original post about fph and inflationary pressures impacting margins thats all not all the other fluff
the article says resmed is being impacted by these same inflationary pressures , anyway hammer time $20 here we come see resmed hammered today down 7%

[Rawz]

Here it is rawz .....Last 20 years sales in table below with growth rates over different periods

Make of it what you will

You're too good Master Winner.

So based on my self satisfying theory.. if we take FY20 5 year CAGR of 14.4% and extrapolate out..
FY21 revenue should have been $1,444m vs $1,971m actual and;
FY22 revenue should have been $1,652m vs $1,685m forecast

So conclusion is forecast is ahead of the 5 year running CAGR.

[RupertBear]

You're too good Master Winner.

So based on my self satisfying theory.. if we take FY20 5 year CAGR of 14.4% and extrapolate out..
FY21 revenue should have been $1,444m vs $1,971m actual and;
FY22 revenue should have been $1,652m vs $1,685m forecast

So conclusion is forecast is ahead of the 5 year running CAGR.

Yep he is a clever man that Winner :)

[JohnnyTheHorse]

Watching for an oversold bounce with that ASX gap down open...

[winner69]

You're too good Master Winner.

So based on my self satisfying theory.. if we take FY20 5 year CAGR of 14.4% and extrapolate out..
FY21 revenue should have been $1,444m vs $1,971m actual and;
FY22 revenue should have been $1,652m vs $1,685m forecast

So conclusion is forecast is ahead of the 5 year running CAGR.

amazing what you can do with numbers eh

[winner69]

no doubting growth blah blah blah what FPH is worth is what a reasonable PE to use (the simple methodology, like the lazy man's DCF)?

Currently at about 37 .... not much lower than a few years ago.

Market saying thats reasonable ..... so no worries about today's share price

[kiora]

breakdown of channel gives $20 as a not unreasonable t/a target

Thanks Bull
I was wondering at what price PE or MB would be interested :)

[winner69]

Watching for an oversold bounce with that ASX gap down open...

........bouncing really good just now

[Beagle]

........bouncing really good just now

Heard an interesting turn of phrase on CNBC the other day I'd never heard before. "Dead cats bounce best". Maybe Johnny the Horse uses the old dead cat bounce theory with his day trading ? https://www.thebalance.com/how-to-day-trade-the-dead-cat-bounce-strategy-1031479

[Monarch]

I tend to keep my high PE stocks to a minimum, but It is tempting to buy some more of these at this price. It's nearly at pre-covid pricing...There is still a reasonable risk of new variants popping up that elevate hospitalizations, almost seems like punters think covid is over and have tunnel visioned on the impending interest rate rises. Have to think about it I guess.

[JohnnyTheHorse]

Heard an interesting turn of phrase on CNBC the other day I'd never heard before. "Dead cats bounce best". Maybe Johnny the Horse uses the old dead cat bounce theory with his day trading ? https://www.thebalance.com/how-to-day-trade-the-dead-cat-bounce-strategy-1031479

Kind of similar concept, but not always. Essentially you are looking to buy at the point of maximum fear and capitulation (using RSI on various timeframes and price action), when there is no one left to sell and then FOMO arrives as it starts bouncing.

In this case I was using it for a dead cat bounce, but I regularly use it during strong uptrends to add to long term positions e.g. if we are forming a monthly bull flag (i.e. very strong long term uptrend) and daily RSI hits oversold then I am a buyer (obviously some more subtleties to it). As an example I used this to hoover up HGH in the low $1.70's last April, when people were panicking and wondering why on earth the price was dropping from $2 (oh yes I could smell the fear).

[kiora]

someone mopped the floor at the end of trading

[winner69]

Yikes NZD:USD ‘marching towards’ 70 cents ……and one media commentator say likely to be over 73 cents mid year

A few weeks ago it was 65 something and heading lower

Might trim Fph profits a bit

[alokdhir]

Analysts broadly trimmed their valuations and target prices for F&P – now ranging between $24 and $30 – but held onto a positive view of the stock in the long term.
Jarden upgraded the stock from ‘neutral’ to ‘overweight’ now that the share price had corrected due to the inevitable fall in revenue that comes with fewer hospitalisations.
Analyst Adrian Allbon said he was still confident in the stock’s longer-term growth as it had placed lots of hardware in hospitals during the pandemic.


With recent falls comes some upgrades too ....Jarden upgrading to overweight should carry some weight ...

[couta1]

Analysts broadly trimmed their valuations and target prices for F&P – now ranging between $24 and $30 – but held onto a positive view of the stock in the long term.
Jarden upgraded the stock from ‘neutral’ to ‘overweight’ now that the share price had corrected due to the inevitable fall in revenue that comes with fewer hospitalisations.
Analyst Adrian Allbon said he was still confident in the stock’s longer-term growth as it had placed lots of hardware in hospitals during the pandemic.


With recent falls comes some upgrades too ....Jarden upgrading to overweight should carry some weight ... 4 traders avg price target now $29.59 over 9 analysts, current period just a blip in the grand scheme of things for this company, could be $50 a share half a dozen years from now, I certainly wouldn't rule it out.

[alokdhir]

Managing Director and Chief Executive Officer Lewis Gradon said, “Our second half hospital consumables revenue is currently tracking to be similar to the hospital consumables revenue that we reported in the first half of the 2022 financial year. This is consistent with reports of the increasing prevalence of the Omicron variant over the last two months and its associated lower respiratory intervention requirements, as well as a relatively mild flu season in the Northern Hemisphere.


This states that hospital consumables segment did same as last half thus Hardware sales drop was the main reason of the shortfall which we could make out from big drop in NZ exports numbers

2023 maybe most difficult to forecast year as hardware sales will drop further and consumables are only used when hospitalisations happen and endemic covid or milder covid versions become more prevalent .

So IMO another adjustment year ahead ...only from 2024 it will be truly back on track like before with yearly guidance and over achievements

[bull....]

Fisher and Paykel Healthcare falls another 4% after downgrade

“The downgrades for next year were pretty big, you’re seeing numbers of around 20 per cent downgrades for 2023 earnings, so that’s big.”

https://www.stuff.co.nz/business/industries/128159116/nzx-slips-03-fisher-and-paykel-healthcare-falls-another-4-after-downgrade

got to remember these broking houses are not going to out right say sell as its not in there interests

[winner69]

4 traders avg price target now $29.59 over 9 analysts, current period just a blip in the grand scheme of things for this company, could be $50 a share half a dozen years from now, I certainly wouldn't rule it out.

I like that $50 share in 6 years bit

Only 12% a year ,,,,not too stretched

[winner69]

Like those profit forecasts .....esp 2024 onwards when all are saying things like resuming the past trajectory path blah blah

Good thing is that 2024 profit is 20%/25% above the 2012 to 2019 trajectory path ..... so a new steeper tarjectory path is being formed - probably the residual value of covid gains

Good stuff - share price $50 sooner than couta thinks

[couta1]

Fisher and Paykel Healthcare falls another 4% after downgrade

“The downgrades for next year were pretty big, you’re seeing numbers of around 20 per cent downgrades for 2023 earnings, so that’s big.”

https://www.stuff.co.nz/business/industries/128159116/nzx-slips-03-fisher-and-paykel-healthcare-falls-another-4-after-downgrade

got to remember these broking houses are not going to out right say sell as its not in there interests


And we can trust what you say cause you know what the sp will be in a few yrs with your myopic outlook, yeah right.

[RTM]

Yikes NZD:USD ‘marching towards’ 70 cents ……and one media commentator say likely to be over 73 cents mid year

A few weeks ago it was 65 something and heading lower

Might trim Fph profits a bit

This should help tho Winner:
13640

I'm pretty keen to own some of these...can never get myself over the line tho as dividend a bit lower than I would ideally like.
Not sure we are there yet either....will keep mulling it over.
13641

[dreamcatcher]

UBS: Our Sell rating reflects overvaluation, ongoing earnings risk and a rotation away from COVID-19 outperformers

Downgrade from $23.50 to $21.90 Recommendation Sell

[couta1]

UBS: Our Sell rating reflects overvaluation, ongoing earnings risk and a rotation away from COVID-19 outperformers

Downgrade from $23.50 to $21.90 Recommendation Sell
Haha UBS the biggest gameplayers and manipulators around, they were huge offenders with A2, I'd trust the 4 traders avg concensus hugely over them any day(Just noticed the low target on 4 traders is $21.90 so its probably UBS so you always chuck out the lowest offer)

[dreamcatcher]

Haha UBS the biggest gameplayers and manipulators around, they were huge offenders with A2, I'd trust the 4 traders concensus hugely over them any day.

Not just UBS there were plenty of others that played the short game ......

[couta1]

Not just UBS there were plenty of others that played the short game ......From my close observations over many years they were the biggest and most consistent offenders and its looks like they are carrying their form on here, looks like they are the only sell out of 9 analysts so yeah a straight reject IMO.

[JohnnyTheHorse]

Never buy a stock in a downtrend... never try to catch a falling knife... generally very good rules to live by. But is there a way to try pick a bottom without getting s**t on your fingers?

Moments of extreme fear (i.e. large drops) actually provide a greatrisk/reward opportunity to try and pick a long term bottom. Let me show you how I take advantage of these extreme fear scenarios to take establish essentially risk free long term positions.

The Basis for My Entry
Fundamentals:
- FPH is considered a 'best of breed' stock on the NZX. It always trades at a premium. Funds love it and don't like to be underweight on it. It has a strong history of performance
- Recent FPH downgrade has brought weakness. Short term fundamentals appear to have weakened, long term still appear strong
- I want a long term position in this stock in case it returns to glory. Fundamentals aren't where I have an edge over the market (acknowledge your own weaknesses), so I will rely on my technical expertise

Technicals:
- Daily RSI is oversold (below 30). FPH historically has strong bounces after each daily oversold level. Refer to daily chart: https://www.tradingview.com/x/vTfkihfG/
- Weekly RSI is oversold (below 30). It has not reached oversold since FPH began its massive bull trend 10 years ago. Previous RSI lows have been very good long term buying points, or at least seen large rallies
- Acknowledge the limitations of RSI. This is a news driven event, which means RSI levels can go to much more extreme levels. It can always go lower.
- We are in a daily, weekly and monthly downtrend. Doesn't really get more bearish than that. Weekly chart showing break of significant support line: https://www.tradingview.com/x/sgRGU2Xn/

You've probably just read that last line and think I'm absolutely mad looking for a position, but stick with me.

The Strategy
Extreme fear scenarios almost always lead to an oversold bounce. The reliability of these bounces means that if I can build a position around the fear lows, I can sell a portion of my position very quickly into a bounce. I can set my stoploss below the low, with the profit from the position I have sold covering the loss on the remaining position if my stoploss triggers. I am risk free on the long term position (unless there's a gap down). I think it's more likely than not that my stoploss will trigger at some point (daily, weekly, monthly downtrend), however I want this position in case this is the bottom.

Sounds easy, but trading oversold bounces is an extremely difficult skill to develop and really you never stop learning... each one is slightly different. Build your position at the wrong point and boy it can absolutely blow up in your face. This is a very aggressive strategy. Let's zoom in an have a look.

The FPH Trade
I want 5min, 15min, and hourly RSI all oversold and as low as possible. I want fear and liquidations.

Day 1: with news driven drops I am not interested in a bounce on the first day (unless I quick day trade).
Day 2: Big gap down open, lower volume on open. I am not so interested on 2 day as the day to set the bottom, however the gap down has me looking for a bounce (which I day traded, but that's another story).
Day 3: Right, I'm interested.

Plan A
Based on the action from Day 2, I thought I may have missed my optimum 'enter on fear' position. https://www.tradingview.com/x/anK8Yt5U/ Looking at the hourly chart, (day 2 covered by the Fib retracement chart) you will see a strong bounce off the open,an hourly lower high set the next candle, a drop to hold the lows, then a 62% bounce retracement on larger volume (this is critical). I thought it was likely that the low was in, so my entry would now be looking for an hourly pullback (I'm not buying as it's going up as I need support to play off to manage risk) to form an hourly higher low (an hourly equilibrium had formed).

On the ASX open, we pulled back into that key 2260 area which should see support. I'm in. Stop below 2250, as if that breaks I am back to waiting for more fear. This isn't my ideal setup, so I'm very quick to sell half in the 2270's to get close to risk free on the very next 1min candle. Long story short, I got stopped out and we were going lower (small loss). Over to Plan B.

Plan B
With the break of the previous days low I now want fear to come back. Let's look at a 1min chart: https://www.tradingview.com/x/qRm1AevB/

Rather than a flush, we see a slow grind down, forming a falling wedge. These are great bottoming patterns, they show sellers running out of momentum on each new bear break. Looking at the green bubble, I take my 1st position at the drop the the wedge support line with the volume spike. I am not aggressive here as 5min RSI is not that oversold... we can keep going much lower. And lower we do go. I did actually think this might be the low after that bounce on the 1min chart and I'd miss building a big enough position. I note the volume here is quite light compared to the bounce the day before (increasing confidence of a bounce).

The orange box is where I'm getting much more interested. 2nd position on the falling wedge support line. The bounce off this confirms the upper resistance wedge line. We reject off that resistance line and hold that previous low for 4 candles. We also have elevated volume. 3rd position. I can handle 2 more positions, but if 2214 breaks I'm stopping out of 1 position (so I can buy lower if it's going to keep dropping, or else I'm in trouble). I immediately sell 1 position as we near 1min resistance at 2230. I am now essentially risk free on the remaining position (what I intend to hold). The size of the 5 min bounce tells me the low should be in for the short term. Here's the 5min chart perspective: https://www.tradingview.com/x/SKixNlys/

Looking Ahead
This hourly bounce has retraced 75% from the low to the previous hourly high. This tells me that hourly low is not likely to break in the short term. The most likely scenario is that we reject below the previous hourly high at 2300, to form an hourly higher low and then a trend change. This can be another excellent entry point for a daily bounce (which I probably will to get another position or two). However with the setup of the daily chart I would not be surprised if we blow through it. https://www.tradingview.com/x/DX3v8ZA1/

Daily daily chart is a bullish hammer candle (reversal pattern): https://www.tradingview.com/x/OfuTUQnI/ The size of the bounce on the daily chart determines the probabilities of what happens next. If we reject around the 38% retracement level, then a bear flag is likely and further lows expected. If we get to the 50% region or above then we can expect an equilibrium to play (which may then either resolve upwards or downwards).

I expect I'll get stopped out at some point. I am day trading this too so will book profit on the daily bounce.

Please do not try to replicate this as you will more than likely get yourself smoked. It takes a lot of practice. What I've outlined here is only a portion of what I'm looking at and doesn't give the entire picture.

[Old mate]

Thanks JT. Good luck mate

[RupertBear]

Never buy a stock in a downtrend... never try to catch a falling knife... generally very good rules to live by. But is there a way to try pick a bottom without getting s**t on your fingers?

Moments of extreme fear (i.e. large drops) actually provide a greatrisk/reward opportunity to try and pick a long term bottom. Let me show you how I take advantage of these extreme fear scenarios to take establish essentially risk free long term positions.

The Basis for My Entry
Fundamentals:
- FPH is considered a 'best of breed' stock on the NZX. It always trades at a premium. Funds love it and don't like to be underweight on it. It has a strong history of performance
- Recent FPH downgrade has brought weakness. Short term fundamentals appear to have weakened, long term still appear strong
- I want a long term position in this stock in case it returns to glory. Fundamentals aren't where I have an edge over the market (acknowledge your own weaknesses), so I will rely on my technical expertise

Technicals:
- Daily RSI is oversold (below 30). FPH historically has strong bounces after each daily oversold level. Refer to daily chart: https://www.tradingview.com/x/vTfkihfG/
- Weekly RSI is oversold (below 30). It has not reached oversold since FPH began its massive bull trend 10 years ago. Previous RSI lows have been very good long term buying points, or at least seen large rallies
- Acknowledge the limitations of RSI. This is a news driven event, which means RSI levels can go to much more extreme levels. It can always go lower.
- We are in a daily, weekly and monthly downtrend. Doesn't really get more bearish than that. Weekly chart showing break of significant support line: https://www.tradingview.com/x/sgRGU2Xn/

You've probably just read that last line and think I'm absolutely mad looking for a position, but stick with me.

The Strategy
Extreme fear scenarios almost always lead to an oversold bounce. The reliability of these bounces means that if I can build a position around the fear lows, I can sell a portion of my position very quickly into a bounce. I can set my stoploss below the low, with the profit from the position I have sold covering the loss on the remaining position if my stoploss triggers. I am risk free on the long term position (unless there's a gap down). I think it's more likely than not that my stoploss will trigger at some point (daily, weekly, monthly downtrend), however I want this position in case this is the bottom.

Sounds easy, but trading oversold bounces is an extremely difficult skill to develop and really you never stop learning... each one is slightly different. Build your position at the wrong point and boy it can absolutely blow up in your face. This is a very aggressive strategy. Let's zoom in an have a look.

The FPH Trade
I want 5min, 15min, and hourly RSI all oversold and as low as possible. I want fear and liquidations.

Day 1: with news driven drops I am not interested in a bounce on the first day (unless I quick day trade).
Day 2: Big gap down open, lower volume on open. I am not so interested on 2 day as the day to set the bottom, however the gap down has me looking for a bounce (which I day traded, but that's another story).
Day 3: Right, I'm interested.

Plan A
Based on the action from Day 2, I thought I may have missed my optimum 'enter on fear' position. https://www.tradingview.com/x/anK8Yt5U/ Looking at the hourly chart, (day 2 covered by the Fib retracement chart) you will see a strong bounce off the open,an hourly lower high set the next candle, a drop to hold the lows, then a 62% bounce retracement on larger volume (this is critical). I thought it was likely that the low was in, so my entry would now be looking for an hourly pullback (I'm not buying as it's going up as I need support to play off to manage risk) to form an hourly higher low (an hourly equilibrium had formed).

On the ASX open, we pulled back into that key 2260 area which should see support. I'm in. Stop below 2250, as if that breaks I am back to waiting for more fear. This isn't my ideal setup, so I'm very quick to sell half in the 2270's to get close to risk free on the very next 1min candle. Long story short, I got stopped out and we were going lower (small loss). Over to Plan B.

Plan B
With the break of the previous days low I now want fear to come back. Let's look at a 1min chart: https://www.tradingview.com/x/qRm1AevB/

Rather than a flush, we see a slow grind down, forming a falling wedge. These are great bottoming patterns, they show sellers running out of momentum on each new bear break. Looking at the green bubble, I take my 1st position at the drop the the wedge support line with the volume spike. I am not aggressive here as 5min RSI is not that oversold... we can keep going much lower. And lower we do go. I did actually think this might be the low after that bounce on the 1min chart and I'd miss building a big enough position. I note the volume here is quite light compared to the bounce the day before (increasing confidence of a bounce).

The orange box is where I'm getting much more interested. 2nd position on the falling wedge support line. The bounce off this confirms the upper resistance wedge line. We reject off that resistance line and hold that previous low for 4 candles. We also have elevated volume. 3rd position. I can handle 2 more positions, but if 2214 breaks I'm stopping out of 1 position (so I can buy lower if it's going to keep dropping, or else I'm in trouble). I immediately sell 1 position as we near 1min resistance at 2230. I am now essentially risk free on the remaining position (what I intend to hold). The size of the 5 min bounce tells me the low should be in for the short term. Here's the 5min chart perspective: https://www.tradingview.com/x/SKixNlys/

Looking Ahead
This hourly bounce has retraced 75% from the low to the previous hourly high. This tells me that hourly low is not likely to break in the short term. The most likely scenario is that we reject below the previous hourly high at 2300, to form an hourly higher low and then a trend change. This can be another excellent entry point for a daily bounce (which I probably will to get another position or two). However with the setup of the daily chart I would not be surprised if we blow through it. https://www.tradingview.com/x/DX3v8ZA1/

Daily daily chart is a bullish hammer candle (reversal pattern): https://www.tradingview.com/x/OfuTUQnI/ The size of the bounce on the daily chart determines the probabilities of what happens next. If we reject around the 38% retracement level, then a bear flag is likely and further lows expected. If we get to the 50% region or above then we can expect an equilibrium to play (which may then either resolve upwards or downwards).

I expect I'll get stopped out at some point. I am day trading this too so will book profit on the daily bounce.

Please do not try to replicate this as you will more than likely get yourself smoked. It takes a lot of practice. What I've outlined here is only a portion of what I'm looking at and doesn't give the entire picture.

WOW :eek2: thanks for sharing that with us. Impressive stuff! Bears dont have the best concentration span so my brain started to glaze over a bit near end but I think what you do sounds awesome. :D

[whatsup]

2 year low today, shine definately gone for now along with the Covid threat !!

[couta1]

2 year low today, shine definately gone for now along with the Covid threat !! I thought the same with XRO when it went from $45 down to $12, well take a look at me now, check out its PE to boot. The Covid threat is far from gone, unlike A2 i would never sell this high quality company with a worldwide market for a permanent loss, I will get to work shorting my own shares once I have finished doing so with a certain other long term hold.

[alokdhir]

I am surprised that JTH's bounce didn't materialise and it keeps making newer lows ...must be getting close to attractive ...even W69 is now positive LT

But u never know with FPH ...it always overshoots a lot both sides ...

[couta1]

I am surprised that JTH's bounce didn't materialise and it keeps making newer lows ...must be getting close to attractive ...even W69 is now positive LT

But u never know with FPH ...it always overshoots a lot both sides ... Yep Schizophrenic market oscillates between overbought and oversold, wonder if the current lot of sellers are taking heavy losses or bought in early on, we will never know unless a big player sells and has to put out a notice.

[Beagle]

Down $4.47 or a whopping 16% in just one week !

The plain fact of the matter is that while this is a very good company, no doubt about that, but based on Friday's closing price and the average forecast of the brokers its still trading on a whopping 41 times FY23 earnings. https://www.marketscreener.com/quote/stock/FISHER-PAYKEL-HEALTHCAR-6492630/financials/

On a fundamental basis, even after a pretty serious decline that's still really, really expensive and of the course on a TA basis the downtrend is very well established. Catching a falling knife is a very risky game to play. I think there's plenty more scope for this downtrend to run for quite a while yet.

If you go back and have a look at the long term price chart RTM kindly posted at #2418 its only got to overshoot a little bit on the downside of that long term trend line and $20 looks a very real prospect. If it overshoots by a fair bit ~ $17 is a chance.

People with fresh capital to deploy here would do well to consider sitting on their paws until there's a confirmed bottoming process and a new uptrend starts.

[couta1]

Any share has the scope to fall to zero given any number of different circumstances just like your life could end on any given day under a number of different circumstances, it is what it is.

[Beagle]

Its about prudent risk management and using TA and FA to outperform the market, that's what it's all about on here.

Some people would be better off in several managed funds and ETF's, that much has become perfectly obvious to me over the years.

2022 is going to be a very tough year for a lot of stocks in my opinion. High PE stocks are very vulnerable to rising 10 year Govt stock rates undermining their value. 2022 has been all about capital preservation so far this year and I think its likely to remain that way for much of the rest of the year.

[winner69]

Oh dear ....all those assumptions I made are out big time ...sales / margins the lot

So the $28.34 DCF is history ......checked the assumptions on theprior one that came to $24.68.

That's shot to pieces as well



Well shareprice below the $24.68 now ….knew that valuation was a bit high.

But still working on the latest revision ……starting from lower base and growth assumptions that are in line with reality.

So not really interested in buying any at the moment.

[Beagle]

Well shareprice below the $24.68 now ….knew that valuation was a bit high.

But still working on the latest revision ……starting from lower base and growth assumptions that are in line with reality.

So not really interested in buying any at the moment.

RTM's long term share price graph says $20 is fair value and in line with the long term growth performance driving the share price along but things often undershoot to the downside, sometimes by quite a lot. I'm keeping my powder dry too.

[winner69]

All reports say FPH revenues down 13% and that’s what has spooked investors

Reality is second half sales down 25% …..huge ….wouldn’t want to see another half year like this would we.

[Baa_Baa]

All reports say FPH revenues down 13% and that’s what has spooked investors

Reality is second half sales down 25% …..huge ….wouldn’t want to see another half year like this would we.

Downgrades come in __________. This has a wicked bad chart (https://invst.ly/xrs6o), 200EMA about to cross down through 400EMA (people think 50/200 is bad). Over halfway through the Covid March 2020 panic selldown now. More than 400 trading days since the lofty high and 38% down. This has been going on for a long time now, initially leakage with strong support rebounds but lower highs, but lately that's well and truely over, with the steep down days on sizeable volume. There is no obvious technical support until the Covid low around $21, assuming it holds.

[winner69]

Jeez, not often BaaBaa says ‘wicked bad’

[alokdhir]

When all say bad for fundamentally good stock then must be good time to start buying .... As long as business model good and management quality top notch ...then it will come back in a big way .

This may not be time to FEAR .

But DYOR and listen to your own Masters ...:D

[couta1]

When all say bad for fundamentally good stock then must be good time to start buying .... As long as business model good and management quality top notch ...then it will come back in a big way .

This may not be time to FEAR .

But DYOR and listen to your own Masters ...:D Macquarie say OUTPERFORM with a reduced TP of $29.87NZ, choose your poison, who do I believe more a heap of analysts with an avg TP of over $29 or the downramping non holders on here? Its a tough call but I'm running with the analysts on this one. :D

[Greekwatchdog]

And For Bars view..

F&P Healthcare's (FPH) FY22 downgrade marks the first genuine insight into what the transition to a post COVID world may look like,
and it's not a good start. We estimate that 2H22 EBIT will be down ~-50% versus 2H21 (off a high base) and below 2H20 which only
had a modest contribution from COVID-19 demand. Our proprietary revenue proxy also suggests that revenue has decelerated
meaningfully towards the end of 2H22 which adds further questions to what FY23 may look like. We think FY23 is likely to be the
'new base' but believe it could be challenging with significant negative operating leverage, as operating expenses continue to grow and
freight costs are expected to remain elevated while a rebound in revenue may take time to materialise. Looking beyond this,
we continue to see FPH as well positioned to deliver long-term revenue growth and see a return to its long-term margin targets.
Trading on ~46x 12m forward PE, which is a modest premium to peers on an absolute and relative basis, we retain NEUTRAL with a
reduced target price of NZ$25.05.
What's changed?
First time FY22 quantitative guidance provided
FPH provided FY22 revenue guidance of between NZ$1,675m and NZ$1,700m (we estimate implied hospital consumables revenue
of ~NZ$900m and hospital hardware of ~NZ$320m — both of which were below our and consensus expectations). Full year gross
margins are expected to be ~62.5%, with the deviation relative to its long term target (~65%) principally attributable to freight costs.
FPH retained full year SG&A costs guidance for ~+9% growth relative to FY21. Highlighting FPH's ongoing cost investment, we
estimate that 2H22 EBIT will be below 2H20 despite revenue being ~NZ$100m higher with 2H22 likely to be FPH's lowest second
half EBIT margin since 2014 (~25%), down from the elevated base of 38% in 2H21.
What does FY23 look like? Negative operating leverage likely a key feature
The revenue trajectory is the key unknown but we believe FY23 is likely to be the 'new base'. That said, the absolute base level and
subsequent use of its products was made no clearer. There is a wide range of outcomes but we expect it to be a multi-year period
before FPH fully utilises its materially increased base of hospital hardware. Despite this uncertainty we think the trajectory of the
cost base is relatively clear with limited variation irrespective of the revenue path. Consistent with history, we expect FPH to grow
operating expenses by ~+8–10% annually over the medium-term as it continues to invest for growth. While we consider this both a
value add and necessary strategy, it brings with it some short term risks to earnings. At this juncture, we assume downside risk to
FPH's long term EBIT margin target (~30%) and forecast a base of ~27% in FY23 with a gradual recovery over the medium-term.

[couta1]

And For Bars view..

F&P Healthcare's (FPH) FY22 downgrade marks the first genuine insight into what the transition to a post COVID world may look like,
and it's not a good start. We estimate that 2H22 EBIT will be down ~-50% versus 2H21 (off a high base) and below 2H20 which only
had a modest contribution from COVID-19 demand. Our proprietary revenue proxy also suggests that revenue has decelerated
meaningfully towards the end of 2H22 which adds further questions to what FY23 may look like. We think FY23 is likely to be the
'new base' but believe it could be challenging with significant negative operating leverage, as operating expenses continue to grow and
freight costs are expected to remain elevated while a rebound in revenue may take time to materialise. Looking beyond this,
we continue to see FPH as well positioned to deliver long-term revenue growth and see a return to its long-term margin targets.
Trading on ~46x 12m forward PE, which is a modest premium to peers on an absolute and relative basis, we retain NEUTRAL with a
reduced target price of NZ$25.05.
What's changed?
First time FY22 quantitative guidance provided
FPH provided FY22 revenue guidance of between NZ$1,675m and NZ$1,700m (we estimate implied hospital consumables revenue
of ~NZ$900m and hospital hardware of ~NZ$320m — both of which were below our and consensus expectations). Full year gross
margins are expected to be ~62.5%, with the deviation relative to its long term target (~65%) principally attributable to freight costs.
FPH retained full year SG&A costs guidance for ~+9% growth relative to FY21. Highlighting FPH's ongoing cost investment, we
estimate that 2H22 EBIT will be below 2H20 despite revenue being ~NZ$100m higher with 2H22 likely to be FPH's lowest second
half EBIT margin since 2014 (~25%), down from the elevated base of 38% in 2H21.
What does FY23 look like? Negative operating leverage likely a key feature
The revenue trajectory is the key unknown but we believe FY23 is likely to be the 'new base'. That said, the absolute base level and
subsequent use of its products was made no clearer. There is a wide range of outcomes but we expect it to be a multi-year period
before FPH fully utilises its materially increased base of hospital hardware. Despite this uncertainty we think the trajectory of the
cost base is relatively clear with limited variation irrespective of the revenue path. Consistent with history, we expect FPH to grow
operating expenses by ~+8–10% annually over the medium-term as it continues to invest for growth. While we consider this both a
value add and necessary strategy, it brings with it some short term risks to earnings. At this juncture, we assume downside risk to
FPH's long term EBIT margin target (~30%) and forecast a base of ~27% in FY23 with a gradual recovery over the medium-term. Two key sentences in this for longs are 1.We continue to see FPH as well positioned to deliver long term revenue growth and 2.Consistent with history we expect FPH to grow.

[Rawz]

SP capitulation?

I am going to ride this out and look to add around $20 to lower total holding cost.
Two learnings from holding this stock:

1) I desperately need to learn technical analysis skills. I previously didnt pay much attention to it being a long term investor but its clear you can save yourself lots of coin if you watch the squiggly line. Can anyone recommend any good youtube channels or books?

2) I think i am going to shy away from high P/E stocks in future. Look at HLG, recently announced a 40% drop in NPAT and the SP goes up.. FPH trading on such a high multiple it couldnt afford a drop in sales and margin. Priced for perfection. I'm going to move more weightings to the GARP stocks

Last two years investing have been easy. This year much much harder. Lots of learnings!

[Beagle]

And For Bars view..

F&P Healthcare's (FPH) FY22 downgrade marks the first genuine insight into what the transition to a post COVID world may look like,
and it's not a good start. We estimate that 2H22 EBIT will be down ~-50% versus 2H21 (off a high base) and below 2H20 which only
had a modest contribution from COVID-19 demand. Our proprietary revenue proxy also suggests that revenue has decelerated
meaningfully towards the end of 2H22 which adds further questions to what FY23 may look like. We think FY23 is likely to be the
'new base' but believe it could be challenging with significant negative operating leverage, as operating expenses continue to grow and
freight costs are expected to remain elevated while a rebound in revenue may take time to materialise. Looking beyond this,
we continue to see FPH as well positioned to deliver long-term revenue growth and see a return to its long-term margin targets.
Trading on ~46x 12m forward PE, which is a modest premium to peers on an absolute and relative basis, we retain NEUTRAL with a
reduced target price of NZ$25.05.
What's changed?
First time FY22 quantitative guidance provided
FPH provided FY22 revenue guidance of between NZ$1,675m and NZ$1,700m (we estimate implied hospital consumables revenue
of ~NZ$900m and hospital hardware of ~NZ$320m — both of which were below our and consensus expectations). Full year gross
margins are expected to be ~62.5%, with the deviation relative to its long term target (~65%) principally attributable to freight costs.
FPH retained full year SG&A costs guidance for ~+9% growth relative to FY21. Highlighting FPH's ongoing cost investment, we
estimate that 2H22 EBIT will be below 2H20 despite revenue being ~NZ$100m higher with 2H22 likely to be FPH's lowest second
half EBIT margin since 2014 (~25%), down from the elevated base of 38% in 2H21.
What does FY23 look like? Negative operating leverage likely a key feature
The revenue trajectory is the key unknown but we believe FY23 is likely to be the 'new base'. That said, the absolute base level and
subsequent use of its products was made no clearer. There is a wide range of outcomes but we expect it to be a multi-year period
before FPH fully utilises its materially increased base of hospital hardware. Despite this uncertainty we think the trajectory of the
cost base is relatively clear with limited variation irrespective of the revenue path. Consistent with history, we expect FPH to grow
operating expenses by ~+8–10% annually over the medium-term as it continues to invest for growth. While we consider this both a
value add and necessary strategy, it brings with it some short term risks to earnings. At this juncture, we assume downside risk to
FPH's long term EBIT margin target (~30%) and forecast a base of ~27% in FY23 with a gradual recovery over the medium-term.

Thanks for sharing. Most experienced investors know downgrades normally come in 3's. 46 times FY23 earnings looks FAR too expensive in the circumstances and the drop off in demand late in the half suggests its even potentially worse than a 25% fall looking forward into the next period of trading...not to forget that FPH is still enjoying huge tailwinds from Covid, for now but for how much longer ?. Hmmm

Start by reading this thread Rawz. https://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits
TA is your best tool in times of great uncertainty like this. Anyone with excess hubris about their FA skills who ignores TA completely in these uncertain times is leaving themselves wide open to getting a brutal haircut. Good that you are looking to learn new skills.
Trust me on this mate. The most money is made when both FA and TA say a stock is a buy. When both suggest its a SELL, run for the hills !!

[JohnnyTheHorse]

Bigger volume today and big red candle... looks like funds may have made decisions to trim positions after fully analysing things. Great volatility for us traders, even if things didn't go as expected!

[alokdhir]

Bigger volume today and big red candle... looks like funds may have made decisions to trim positions after fully analysing things. Great volatility for us traders, even if things didn't go as expected!

Why more bearish at NZX vs ASX ...ASX is always closing much better then NZX though volumes are good at ASX too ...Does it tell anything specific ?

[percy]

Why more bearish at NZX vs ASX ...ASX is always closing much better then NZX though volumes are good at ASX too ...Does it tell anything specific ?

Perhaps Australian investors do not rea Sharetrader.?

[winner69]

OMG - Forbars say a forward PE of 42

If they wrote that last April was about $35 and their guru analysts calculated FY22 EPS was only going to be about 59 cents they would have said 'forward PE of 60' and still said NEUTRAL

share price being down more 30% since then

The much revered Benjamin Graham described “investment” as buying a security at a valuation that is associated with a reasonable expectation of acceptable long-term returns, based on a careful analysis of the relationship between the current price and the assets and cash flows of the business. He also observed, “The habit of relating what is paid to what is being offered is an invaluable trait in investment.” In contrast, “speculation” involves buying a security simply on the expectation that its price will advance. If you are not using well-defined and historically reliable valuation measures as a basis for investment, and you don’t have a well-defined and historically validated basis on which to expect speculative behavior from other investors, you’re probably gambling.

[winner69]

Downgrades come in __________. This has a wicked bad chart (https://invst.ly/xrs6o), 200EMA about to cross down through 400EMA (people think 50/200 is bad). Over halfway through the Covid March 2020 panic selldown now. More than 400 trading days since the lofty high and 38% down. This has been going on for a long time now, initially leakage with strong support rebounds but lower highs, but lately that's well and truely over, with the steep down days on sizeable volume. There is no obvious technical support until the Covid low around $21, assuming it holds.

Some see crossing the 200EMA as a BUY signal .... buy more / top up while cheap

As such I see today as an UP day for FPH share price

[winner69]

Perhaps Australian investors do not rea Sharetrader.?

They read hotcopper ..... some clever people on that hotcopper

[alokdhir]

Perhaps Australian investors do not rea Sharetrader.?

:t_up: Perfect ...some like Forbars FPH report but not on other stocks !!!

[alokdhir]

Some see crossing the 200EMA as a BUY signal .... buy more / top up while cheap

As such I see today as an UP day for FPH share price

Four ie 4 days in a row down ...from 27.93 to 23.48 ...need some bounce ...fifth is turnaround day ? Very possible ...But its a good entry place for future big gains ....IMHO ...but people want security of only up after buy then need wait till it crosses $ 36 ...:cool:

[couta1]

Four ie 4 days in a row down ...from 27.93 to 23.48 ...need some bounce ...fifth is turnaround day ? Very possible ...But its a good entry place for future big gains ....IMHO ...but people want security of only up after buy then need wait till it crosses $ 36 ...:cool: Yep true investors don't rant on about using TA all the time and following squiggly lines, they buy great companies and hold through the good and bad times and only change their position if the long term story changes, has the long term story changed for FPH? that would be a big fat NO. I'm trying to be one of these investors with my 3 main holdings and thanks Percy and a few others for your constant example regarding this.

[JohnnyTheHorse]

OMG - Forbars say a forward PE of 42

If they wrote that last April was about $35 and their guru analysts calculated FY22 EPS was only going to be about 59 cents they would have said 'forward PE of 60' and still said NEUTRAL

share price being down more 30% since then

The much revered Benjamin Graham described “investment” as buying a security at a valuation that is associated with a reasonable expectation of acceptable long-term returns, based on a careful analysis of the relationship between the current price and the assets and cash flows of the business. He also observed, “The habit of relating what is paid to what is being offered is an invaluable trait in investment.” In contrast, “speculation” involves buying a security simply on the expectation that its price will advance. If you are not using well-defined and historically reliable valuation measures as a basis for investment, and you don’t have a well-defined and historically validated basis on which to expect speculative behavior from other investors, you’re probably gambling.

Do you think Ben would consider it acceptable long term returns at a PE of 42? Asking for a friend.

[SPC]

The decision analysis used by Traders and Investors is entirely different and the two shouldn't be confused in the same discussion. (Admittedly this is 'Share Trader').
Maybe we need an Investor's thread and a Traders thread.. Long term (or potential) long term holders on one side and day-trader chart line followers on the other.

[alokdhir]

Yep true investors don't rant on about using TA all the time and following squiggly lines, they buy great companies and hold through the good and bad times and only change their position if the long term story changes, has the long term story changed for FPH? that would be a big fat NO. I'm trying to be one of these investors with my 3 main holdings and thanks Percy and a few others for your constant example regarding this.

Genuine investors need pay more attention to management plans of investing $ 700 million in infrastructure to almost double manufacturing capacity over next 5 years ...ie they are looking to have around $ 4 Billion revenues in 5-7 years ...as they are a manufacturing company so they need to plan ahead ...but that shows how much faith they have in their ability to grow . Here its note worthy that FPH management always over delivers ...that is their past golden track record ...that gives their future plans more credibility .

This is the time SP is most depressed for they doing too much in one year ...some will take this opportunity and some will fear this time . Result will be equivalent in future .

Also for many finding investing in Growth stocks painful compared to smaller stocks like HGH / WHS / OCA etc ...high pains = high gains too . So depending on your time horizon 40-60% in growth stocks is not a bad strategy . But all can tailor their own needs .

I prefer long term investing rather then day to day switching in or out ...so for me many current GARP stocks will not be so in near future then need switch out to find new avenues . High yield stocks have their own place especially for going to or already retired people looking for reliable dividend streams but then they dont provide big capital gains .

No one can get best of both worlds ...yield and gains

[alokdhir]

Do you think Ben would consider it acceptable long term returns at a PE of 42? Asking for a friend.

Quoting a single year PE for investment decisions is like .....

TESLA quoted at PE of 300 too ....

Medical device industries forward PE is currently 47 ....so its not too far away from its industry peers

[RTM]

Maybe we need an Investor's thread and a Traders thread.. Long term (or potential) .

It’s amazing how quickly a Trader can become an Investor when the market drops a bit.

[winner69]

Coming soon - time to buy to get decent long term returns ..... but why wait ......buy every week until you've got your fill

Chart is annual rate of share price appreciation over 2, 5 and 10 year periods

Past says made decent gains from FPH except buying when price has been ridiculously high (four times if you count 2020) when you've incurred losses

Reckon 18 bucks in May would be cool start point ...... but better buy now in case it doesn't go down that far

[Ricky-bobby]

Long term there is going to be demand for their products. The global population is getting older and more dependent on tech keeping them alive. This is the lull after all the covid hype and beagle is right, there will prob be a couple more downgrades to come. FPH is a great kiwi success story and they will get it sorted. I’m not holding, but would look if drops to mid-teens.

[percy]

It’s amazing how quickly a Trader can become an Investor when the market drops a bit.

Quote.
"A long term hold is a short term trade that did not work out."

I do note latest profits are being wisely recycled into future production expansion.

[alokdhir]

Quote.
"A long term hold is a short term trade that did not work out."

Not all short term trades are initiated in long term holdable stocks ....those need stopped out ....only blue chip ones can be converted to long term hold eg ATM trade needed to be stopped out ....FPH maybe go in hold basket ...just a thought

[percy]

Not all short term trades are initiated in long term holdable stocks ....those need stopped out ....only blue chip ones can be converted to long term hold eg ATM trade needed to be stopped out ....FPH maybe go in hold basket ...just a thought

Agreed....................
Quality is always worth buying/holding ,whether it be shares,houses,art,or whatever.
I admit when I have done really well out of a spec, I recycle the profits into a quality company,and think to myself, it has been great buying it at half price.Fun and very profitable too....lol

[couta1]

Not all short term trades are initiated in long term holdable stocks ....those need stopped out ....only blue chip ones can be converted to long term hold eg ATM trade needed to be stopped out ....FPH maybe go in hold basket ...just a thought Unfortunately with A2 there was more going on under the water than above it but it was very much a blue chip in its time.

[JohnnyTheHorse]

It’s amazing how quickly an unskilled Trader can become an Investor when the market drops a bit.

Fixed that for you.

Cracks me up the constant battle I see on here between "traders" and "investors". Both styles are extremely profitable and neither is the right or wrong way, but both could learn from each other to become more profitable. The markets are about constant learning. The reality though is that I reckon 80%+ of people, whether investor or trader, are pretty bad at what they do. You aren't insecure about your investment style when you're very good at it.

[alokdhir]

Unfortunately with A2 there was more going on under the water than above it but it was very much a blue chip in its time.

Why I put ATM in different category then FPH as in my opinion it always had too many eggs in just one basket and that basket too was not very reliable market which could turn at a drop of a pen stroke or some whim etc ...see what happened to Alibaba and Tencent ...51 out of 56 analysts tracking them had buys on them as business was too good to put sell on them ...but they dropped 60% or more due to politics of that only market in which ATM gets all its money ...having over dependence made ATM PE speculative type

[percy]

Fixed that for you.

Cracks me up the constant battle I see on here between "traders" and "investors". Both styles are extremely profitable and neither is the right or wrong way, but both could learn from each other to become more profitable. The markets are about constant learning. The reality though is that I reckon 80%+ of people, whether investor or trader, are pretty bad at what they do. You aren't insecure about your investment style when you're very good at it.

Agreed.....................
I have also seen people being very successful just buying booze shares,property shares,tech shares,etc.
Whatever works for you.
I myself find the more research I do the better the results I achieve.Quess that is the same whatever asset you invest in.

[couta1]

Fixed that for you.

Cracks me up the constant battle I see on here between "traders" and "investors". Both styles are extremely profitable and neither is the right or wrong way, but both could learn from each other to become more profitable. The markets are about constant learning. The reality though is that I reckon 80%+ of people, whether investor or trader, are pretty bad at what they do. You aren't insecure about your investment style when you're very good at it. People like yourself and bull are honest about what you do so all power to you, its just masked traders pretending to be investors ramping stocks up and down and changing with the wind that annoys me.

[Balance]

High PE stock - cannot disappoint as EPS shrinkage also results in PE contraction.

Hardly surprising that FPH sp is falling, is it?

[Beagle]

Hardly surprising that FPH sp is falling, is it?

You've always said downgrades come in 3's and to the best of my knowledge you've been right almost every time.

[Balance]

You've always said downgrades come in 3's and to the best of my knowledge you've been right almost every time.

Be surprising indeed, Beagle, if FPH is an exception to that observation.

Companies, especially those who have been darlings of the market, do not generally handle earning downgrades well - it is inherent in their DNA that they believe they can easily overcome ‘short’ term’ business & economic aberrations and downgrades are but temporary inconveniences.

[alokdhir]

You've always said downgrades come in 3's and to the best of my knowledge you've been right almost every time.

Will u consider last result announcement of HGH as downgrade ? As it came below market expectations same as revenue guidance of FPH came below market expectations but not below FPH guidance as they never gave any ...so I will not consider FPH revenue guidance as out of blue " Downgrade " ...it was very much expected after 80+ % overshoot of previous year .

Will I be expecting more bad news in the short term ...very possible till they get that bearing or new base year ...which as already predicted is 2023 ...

All analysts had these numbers forecasted long ago ...path to normalisation after big overshoot was spread over 2-3 years .All already on the horizon .

Yes SP reaction got exaggerated by current market situation of rates / inflation and war etc ...so it went 10-15% below expected lines ...otherwise 50 million less on 1750 consensus is hardly downgrade ...next year 1650 can surely become 1550 ...but 2022 eps consensus of 66 cents and of 2023 of 59 cents will hold or be exceeded most likely ....I will wait for results to see that ...missing earnings by 3-5 % is not that important for FPH in the longer term picture . Also they never guided anything so they are not downgrading anything ...just gave revenue guidance after knowing 11 months figures ...which due to Omicron's mildness resulted in less severe hospitalisations needing respiratory support ...which can change either way ahead but most likely it will keep resolving to become better so dependence on covid hospitalisations ahead will keep becoming less and less .

Original business which had revenues of 1.2 Billion in 2020 will take main stream as normalisation of revenues and earnings will happen . Forecasts and over deliverance will start ...hopefully from 2024 . I can wait till that ...will market keep SP depressed till that is a big question to which all know answer .

[Rawz]

Coming soon - time to buy to get decent long term returns ..... but why wait ......buy every week until you've got your fill

Chart is annual rate of share price appreciation over 2, 5 and 10 year periods

Past says made decent gains from FPH except buying when price has been ridiculously high (four times if you count 2020) when you've incurred losses

Reckon 18 bucks in May would be cool start point ...... but better buy now in case it doesn't go down that far

Winner69 and his graphs... amazing!! $18 wow. That would be too good to be true

[couta1]

Broken clocks are right twice a day or 730 times a year and broken clocks sound so much better than broken records. Lol

[Beagle]

Will u consider last result announcement of HGH as downgrade ? As it came below market expectations same as revenue guidance of FPH came below market expectations but not below FPH guidance as they never gave any .. .
HGH is on track to meet the profit guidance for FY22 it gave at the time of the FY21 result in August 2021. There was one erroneous media report that you are regurgitating. The fact is that HGH are also on track to meet analysts and their own forecast for FY22. $93-$96m, about 16 cps and that solid company which grows steadily every year is on a current year PE of less than 14 which marks it out as a classic GARP stock, (Growth at a reasonable price) and that's a very different kettle of fish to this priced by some broker analysis at 46 times next year's earnings.

[JohnnyTheHorse]

ASX gap down open onto yesterdays support and descending support line has me in for my next crack at an entry. Already risk free on it. Let's see if this daily bounce can get going today, or whether I get stopped out breakeven again.

We know a bounce is coming to set a daily lower high at some point, which could be 8% from the the lows and still be a bearish continuation pattern (bear flag). The magnitude of that bounce is why I'm very interested.

[alokdhir]

HGH is on track to meet the profit guidance for FY22 it gave at the time of the FY21 result in August 2021. There was one erroneous media report that you are regurgitating. The fact is that HGH are also on track to meet analysts and their own forecast for FY22. $93-$96m, about 16 cps and that solid company which grows steadily every year is on a current year PE of less than 14 which marks it out as a classic GARP stock, (Growth at a reasonable price) and that's a very different kettle of fish to this priced by some broker analysis at 46 times next year's earnings.

I know u are a very seasoned Sharetrader ...so u must be knowing to compare apples with apples ...FPH is in medical devices business and that industry has market given forward PE of about 45 ...why that industry has such high PE is another discussion ...so we need to compare FPH PE with its peers not any financial or banking sector peers mate .

HGH PE should be compared by ANZ etc where it belongs ...IMO

Not just one media report mate ....FORBAR latest update after results had its ie HGH target price as $ 1.84 ...

" Beagle won't agree with this but from Forbar ..... but then again it's Forbar after all

HGH has historically traded at an average -12% forward PE discount to its Australian banking peers, which we feel is appropriate given the considerable differences in scale, position in the market, competitive advantage and quality of assets. With HGH now trading at a material premium of +19% to these Australian banking peers, we reiterate our UNDERPERFORM rating. ​​​​​"

Also dont get me wrong ....I hold both though in different portfolios

[couta1]

I know u are a very seasoned Sharetrader ...so u must be knowing to compare apples with apples ...FPH is in medical devices business and that industry has market given forward PE of about 45 ...why that industry has such high PE is another discussion ...so we need to compare FPH PE with its peers not any financial or banking sector peers mate .

HGH PE should be compared by ANZ etc where it belongs ...IMO

Not just one media report mate ....FORBAR latest update after results had its ie HGH target price as $ 1.84 ... Haha yeah they use whatever numbers suits their agendas which if your a non holder and heavily posting can only be boredom/downramping or mischief making, I cant be bothered commenting on stocks I don't hold excepting one like A2 which was such a big part of my life for many years. Focusing heavily on PE ratios alone is like watching your speedo as you drive down the road.

[Arbroath]

Will u consider last result announcement of HGH as downgrade ? As it came below market expectations same as revenue guidance of FPH came below market expectations but not below FPH guidance as they never gave any ...so I will not consider FPH revenue guidance as out of blue " Downgrade " ...it was very much expected after 80+ % overshoot of previous year .

Will I be expecting more bad news in the short term ...very possible till they get that bearing or new base year ...which as already predicted is 2023 ...

All analysts had these numbers forecasted long ago ...path to normalisation after big overshoot was spread over 2-3 years .All already on the horizon .

Yes SP reaction got exaggerated by current market situation of rates / inflation and war etc ...so it went 10-15% below expected lines ...otherwise 50 million less on 1750 consensus is hardly downgrade ...next year 1650 can surely become 1550 ...but 2022 eps consensus of 66 cents and of 2023 of 59 cents will hold or be exceeded most likely ....I will wait for results to see that ...missing earnings by 3-5 % is not that important for FPH in the longer term picture . Also they never guided anything so they are not downgrading anything ...just gave revenue guidance after knowing 11 months figures ...which due to Omicron's mildness resulted in less severe hospitalisations needing respiratory support ...which can change either way ahead but most likely it will keep resolving to become better so dependence on covid hospitalisations ahead will keep becoming less and less .

Original business which had revenues of 1.2 Billion in 2020 will take main stream as normalisation of revenues and earnings will happen . Forecasts and over deliverance will start ...hopefully from 2024 . I can wait till that ...will market keep SP depressed till that is a big question to which all know answer .

I think FPH is an excellent company but short-term the headwinds could be significant. Falling revenue for maybe 18 months as Covid fades should see more than one market disappointment and my guess (that is all it is) is that the share price gets under $20 at some point this year. That, for an investor, would be a good opportunity to own a great business on a 5-10 year time horizon. On my watchlist...

[Beagle]

I think FPH is an excellent company but short-term the headwinds could be significant. Falling revenue for maybe 18 months as Covid fades should see more than one market disappointment and my guess (that is all it is) is that the share price gets under $20 at some point this year. That, for an investor, would be a good opportunity to own a great business on a 5-10 year time horizon. On my watchlist...

Well said.

Alokdhir - You're the one that brought HGH up in this thread. I'm the one that said based on average broker forecasts FPH is trading on 41 times FY23 earnings.
Yes RESMED for example is even more expensive and yes its also in a confirmed downtrend.
My opinion of Forbar's analyst that covers HGH is on the record. According to their website they have 450 staff. You think they might have a different analyst that covers healthcare than financials' :rolleyes:

With so many insto's holding these there could be a bit of end of quarter / year window dressing in the closing 15 minute price match period of trading on Thursday. That might be an opportunity for someone considering altering their portfolio weightings for the following quarter / financial year.

[alokdhir]

Well said.

Alokdhir - You're the one that brought HGH up in this thread. I'm the one that said based on average broker forecasts FPH is trading on 41 times FY23 earnings.
Yes RESMED for example is even more expensive and yes its also in a confirmed downtrend.
My opinion of Forbar's analyst that covers HGH is on the record. According to their website they have 450 staff. You think they might have a different analyst that covers healthcare than financials' :rolleyes:

With so many insto's holding these there could be a bit of end of quarter / year window dressing in the closing 15 minute price match period of trading on Thursday. That might be an opportunity for someone considering altering their portfolio weightings for the following quarter / financial year.

I brought HGH to compare Forbar's disappointment with HGH results vs FPH revenue missing analyst's consensus as so called " Downgrade " by you ...I never compared PE of HGH with FPH ...that you stated in your post while referring to it as Growth at reasonable price and not pricey as 46 times forward FPH ....this is to just put the record straight ....nothing more ...:cool:

[Rawz]

Your last paragraph is a good point, Beagle..

[alokdhir]

I think FPH is an excellent company but short-term the headwinds could be significant. Falling revenue for maybe 18 months as Covid fades should see more than one market disappointment and my guess (that is all it is) is that the share price gets under $20 at some point this year. That, for an investor, would be a good opportunity to own a great business on a 5-10 year time horizon. On my watchlist...

I agree with you ...under $ 20 for FPH will be golden opportunity IMO ...will it happen or not depends on many other factors too ...so like W69 said ...ideal entry is $ 18 ...but can start buying weekly or monthly etc from now onwards as never easy to perfectly time the market .

Main point being that FPH now more close to buy then a Sell ...

[couta1]

Your last paragraph is a good point, Beagle.. Excepting you don't know if the price is going to go up or down from its current price, plenty of volume for anyone but an extremely large holder to dispatch their holding at any time should they so wish.

[winner69]

With so many insto's holding these there could be a bit of end of quarter / year window dressing in the closing 15 minute price match period of trading on Thursday. That might be an opportunity for someone considering altering their portfolio weightings for the following quarter / financial year.

Kingfish won't be selling ..... probably buying heaps more at this price

[Beagle]

Kingfish won't be selling ..... probably buying heaps more at this price

Late afternoon Thursday would be my guess.

[winner69]

Could say it was a +5% day for FPH share price today

Instead of going down 3.6% it went up 1.4%

That’s the way to go fph

[couta1]

Bouncy Bouncy.:cool:

[newbieinvestor]

Bouncy Bouncy.:cool:

Indeed ..bouncy ..bouncy :cool:.. today ..

Wonder if they will do a 'pump and dump' ? or is this a genuine rally...

[couta1]

Indeed ..bouncy ..bouncy :cool:.. today ..

Wonder if they will do a 'pump and dump' ? or is this a genuine rally... Probably just oversold bounce but I'm fine if it is as ive shorted a lot of mine today to buy back cheaper, doesn't look like high conviction bounce looking at the volume currently.

[alokdhir]

Probably just oversold bounce but I'm fine if it is as ive shorted a lot of mine today to buy back cheaper, doesn't look like high conviction bounce looking at the volume currently.

Like JTH said a bigger bounce possible ...tomorrow closing will be best time ...if lucky may get $ 26 too

[couta1]

Like JTH said a bigger bounce possible ...tomorrow closing will be best time ...if lucky may get $ 26 too Or it could get pulled down with end of year tax selling although i suspect that happened the other day,flip a coin.

[alokdhir]

https://www.youtube.com/watch?v=NT2fvwZ4QgQ

Good analysis but his basis of valuation is totally dependent on analysts consensus which as we know change very easily . Recently they all got downgraded pretty heavily ...can happen other way also . But he wants to value FPH 37 times future earnings for safety ...as thats mean PE historically ...though it rises on better future prospects if on horizon ...eg Delta or similar variants coming back . He pays attention to future expansion of infrastructure plans of $ 700 mil but not includes this in future growth prospects after 2024 ...its after 2024 when FPH will come to limelight ...market will start getting warmed up by mid 2023 or even earlier

[Beagle]

PE's got stretched right out in 2019 off the back on 10 year Govt stock at under 1% and will come under further pressure as this normalizes to about 4%.
Good analysis from a bright young man but his value needs to reflect the effects on multiples we are starting to see from much higher risk free rates.
Fair PE is low 30's in my opinion, 32 x 70 cents gives about $22.40 two years from now and discount that back at 10% per annum suggests fair value today of about $18.50 but as noted before these things often overcorrect to the downside so ~ $15 is not completely out of the question.

[alokdhir]

As Mr B seeks value and he is a good spotter of value ...as per him value in FPH will come below $ 20 ...

Keeping in view other factors which make FPH blue chip ...I will think its a reasonable buy around $ 22 . Also in my humble opinion its a golden opportunity these days to get FPH at such prices which are so close to value propositions ...normally its way over valued most of the time ...almost out of reach of retail investors

And considering the status of FPH on NZX and on index ...its not likely it will overcorrect too much ...after all all kiwisaver funds in ETF will go 14% in FPH by default irrespective its expensive or cheap

[couta1]

As Mr B seeks value and he is a good spotter of value ...as per him value in FPH will come below $ 20 ...

Keeping in view other factors which make FPH blue chip ...I will think its a reasonable buy around $ 22 . Also in my humble opinion its a golden opportunity these days to get FPH at such prices which are so close to value propositions ...normally its way over valued most of the time ...almost out of reach of retail investors

And considering the status of FPH on NZX and on index ...its not likely it will overcorrect too much ...after all all kiwisaver funds in ETF will go 14% in FPH by default irrespective its expensive or cheap Best not to take the bait from bored non holding downrampers.

[alokdhir]

Best not to take the bait from bored non holding downrampers.

As per some fair value of ATM was below $ 3 but it never goes below $ 5.50 ...so on that basis ...$ 22 should hold ..:D

[Beagle]

Best not to take the bait from bored non holding downrampers.

I keep a watching brief on many stocks. I stick to my prudent approach to risk management and methods of assessing fair value for stocks because it has worked extremely well for me over many years.

[kiora]

Value is in the eye of the beholder.
Some investors will never own shares in this company regardless how good the financial metrics look over the long term.
Why some feel compelled to comment on SP fluctuations is beyond me.
PS In hind sight it was a smart decision to sell WHS at $7.50 after owning it from the float

[BlackPeter]

Or it could get pulled down with end of year tax selling although i suspect that happened the other day,flip a coin.

Would be a bit late for end of year tax selling ... with T+2 any share you sell today changes registration only in the coming tax year.

[couta1]

Would be a bit late for end of year tax selling ... with T+2 any share you sell today changes registration only in the coming tax year. Yes good point.