FPH - Fisher Paykel Healthcare.

[kiora]

Getting very close to $9. Did I miss something?

Maybe missed buying FPH earlier ??? :)

[bohemian]

It's never too late to buy FPH in my opinion.

[IAK]

Nup, got some during 'Black Monday' lol. Wished I'd got more.

[clips]

hmm eps / 899c = 2.5% looks full up ?

[muss1]

It has always had a high PE. The revenue growth potential is huge and they do well translating this into earnings growth. Especially with the weaker NZD. It's been a great ride but the catalysts going forward make it hard to justify selling.

Speaking of "Black Monday" (and its namesake thread) it shows that earnings growth just might be more important to the long term share price than x's exposure to this that and the other thing in tandem with the end of humanity.

[Joshuatree]

The moment has passed me by ; how did i miss it.3 BAGGER :t_up:. What a wonderful chart to be hold. Anyone else? Share it;)

[percy]

The moment has passed me by ; how did i miss it.3 BAGGER :t_up:. What a wonderful chart to be hold. Anyone else? Share it;)

I am still there,and intend to stay there.!

[kiora]

I am still there,and intend to stay there.!

Me too :)
Now 25 % of my portfolio
Go TIL :)

[Joshuatree]

Me too :)
Now 25 % of my portfolio
Go TIL :)

Was that a subtle slip that you expect TIL to go the same distance kiora?;)

[JayRiggs]

Bought in the lower $2s and held till now.
Does that make it a 4 bagger for me?

Well I certainly hope TIL has the goods to go the same distance, because I just got into TIL today. GO TIL! :t_up:

[Joshuatree]

Wow 4.5 bagger JR.:t_up::scared::t_up: That tired old adage"its the sitting" that wins through still rings true for a precious few select stocks. What other stocks does this ring true for?. RYM has been dead flat for 2 years. AIR flat for at least 1 year. EBOS i guess. Others ?

[kiora]

Was that a subtle slip that you expect TIL to go the same distance kiora?;)

Likely & quicker but have liked the metrics of FPH & backed them since splitting from FPA :)

[kiora]

Wow 4.5 bagger JR.:t_up::scared::t_up: That tired old adage"its the sitting" that wins through still rings true for a precious few select stocks. What other stocks does this ring true for?. RYM has been dead flat for 2 years. AIR flat for at least 1 year. EBOS i guess. Others ?

SKL at 52 cents,AKL since listing but after reviewing portfolio and reading Craigs advice sold $1 too early ,bugger, IFT getting close after buying the Warrents and converting :)

[malus]

Wow 4.5 bagger JR.:t_up::scared::t_up: That tired old adage"its the sitting" that wins through still rings true for a precious few select stocks. What other stocks does this ring true for?. RYM has been dead flat for 2 years. AIR flat for at least 1 year. EBOS i guess. Others ?

Yes too true, "it's the sitting that wins"!

My FPH is 2.9... buy in price $3.15

My best POT - 68 bagger (held since 1994 though and has provided a 19%pa compounding return!)

RYM not so bad if you held since 2004, would be a 13 bagger (sadly didn't get on this train at the time!)

My next best GXH 5.1 bagger - bought in at 49 cents

[Jim]

It's never too late to buy FPH in my opinion.

How far do you punters think it will go ? $ 10 maybe in middle of next month ?

[kerryo]

How far do you punters think it will go ? $ 10 maybe in middle of next month ?

How about today? currently 10.00. :)

[Twinklefingers]

This was one of my first share purchases almost exactly 3 years ago for $2.60. Everyone here was talking about DIL and PEB, it made me super nervous investing against the tide. I've sold 25% of my holding today for a smidge over $10 so can't lose on this one now. I also bought PEB when everyone was talking great things about them. There are good lessons there for new investors like myself. Follow quality not hype it might take longer but it's a lot less like gambling.

[malus]

How far do you punters think it will go ? $ 10 maybe in middle of next month ?


How about today? currently 10.00. :)
Hmm…. Dropped back to $9.75 by days end… relatively minor volume for the day, around 1.2m(0.2%) of the company’s shares… but price wise admittedly this equity is stretchingis legs, and so Jim how far do you think it can go is your question to we fellow punters (I’m taking it that you are a fellow punter too?)

Craig’s have it as a buy at $9.63 and are expecting it to continue to grow earnings at around 20% with this year projected at 25 c/share and 2017 at 30c/share. At $10per share that gives us a PE of 40 and 33 respectively.

So what’s changed since BIRMANBOY’s post #32 when he bought in to this equity which he believed well priced because with imputation credits he was the getting a 6.4% dividend return on his holding. Incidentally BIRMANBOY bought at $1.95, earnings were 11.7 c/share, PE around 17. (Lizard rightly pointed out at the time that the Company was paying out slightly more in dividend than it was earning and likely adding to debt in so doing).

Well a major tail wind has been favourable currency adjustments with NZD losing the strength it had back then (also interesting to read the currency comments back when BIRMANBOY purchased). Also, back then, a majority of their earnings were $US.That has changed with sales to 120+ countries (99% of revenue earnt outside of NZ).

The Company has positioned its products well and put the continued R &D effort in to ensure market leadership to the point that they have taken over direct distribution to the their US customers.

Debt is under 10%, net margin around 17%, return on assets 18% and return on equity of 24% (from the 2015 annual accounts)… Warren Buffett likes these in a company he owns, he likes a moat too… but is there enough growth in the company for him topay $10 per share. I think if he were to already own it he would be highly unlikely to sell given the Company’s continuing prospects… but in terms of buying it, would it be on his watch list?… so that begs the question at what would Mr Market have to offer him FPH at given its current prospects?

Perhaps someone like Snoopy might like to have a go at answering that.

I trust that BIRMANBOY still holds and is enjoying the ride!! :)

[Lewylewylewy]

Are you familiar with Lewylewylewys law?

It's basically the same as Godwin's law, but substitute Hitler for Warren buffet :)

[BIRMANBOY]

That's a tad callous Malus but I bear you no malice. I wish I still held ..imagine what my dividend yield % would be now!!!! I sold out some time back since I needed the funds for something else. Mistake of course and I did learn a valuable lesson. A Tui in the garden is worth more than two Tuis down the road. However did make a very nice gain so somewhat content. Good luck to all you holders.
Hmm…. Dropped back to $9.75 by days end… relatively minor volume for the day, around 1.2m(0.2%) of the company’s shares… but price wise admittedly this equity is stretchingis legs, and so Jim how far do you think it can go is your question to we fellow punters (I’m taking it that you are a fellow punter too?)

Craig’s have it as a buy at $9.63 and are expecting it to continue to grow earnings at around 20% with this year projected at 25 c/share and 2017 at 30c/share. At $10per share that gives us a PE of 40 and 33 respectively.

So what’s changed since BIRMANBOY’s post #32 when he bought in to this equity which he believed well priced because with imputation credits he was the getting a 6.4% dividend return on his holding. Incidentally BIRMANBOY bought at $1.95, earnings were 11.7 c/share, PE around 17. (Lizard rightly pointed out at the time that the Company was paying out slightly more in dividend than it was earning and likely adding to debt in so doing).

Well a major tail wind has been favourable currency adjustments with NZD losing the strength it had back then (also interesting to read the currency comments back when BIRMANBOY purchased). Also, back then, a majority of their earnings were $US.That has changed with sales to 120+ countries (99% of revenue earnt outside of NZ).

The Company has positioned its products well and put the continued R &D effort in to ensure market leadership to the point that they have taken over direct distribution to the their US customers.

Debt is under 10%, net margin around 17%, return on assets 18% and return on equity of 24% (from the 2015 annual accounts)… Warren Buffett likes these in a company he owns, he likes a moat too… but is there enough growth in the company for him topay $10 per share. I think if he were to already own it he would be highly unlikely to sell given the Company’s continuing prospects… but in terms of buying it, would it be on his watch list?… so that begs the question at what would Mr Market have to offer him FPH at given its current prospects?

Perhaps someone like Snoopy might like to have a go at answering that.

I trust that BIRMANBOY still holds and is enjoying the ride!! :)

[malus]

Are you familiar with Lewylewylewys law?

It's basically the same as Godwin's law, but substitute Hitler for Warren buffet :)

No Lewy... I hadn't caught up with your "law", but as it's essentially the same as "Godwin's" I won't need to research it, will I?

[malus]

That's a tad callous Malus but I bear you no malice. I wish I still held ..imagine what my dividend yield % would be now!!!! I sold out some time back since I needed the funds for something else. Mistake of course and I did learn a valuable lesson. A Tui in the garden is worth more than two Tuis down the road. However did make a very nice gain so somewhat content. Good luck to all you holders.

Poet would be impressed with first line... and nice to hear FPH treated you well during its time in your portfolio... I take it you will be waiting for Mr Market to make you a much discounted offer on $10 before FPH again reappears in your portfolio? ... wondering if you are referring to a bird or a beverage in your garden! :cool:

[BIRMANBOY]

I haven't looked at this for a while and this is an interesting share. So current div yield % according to my website is 1.51% which is absolute rubbish. However appears to be one of those shares that attracts and rewards investors looking at share price growth which is admirable. Looking at my chart for what SP should be to get a desired DIV yield % ..Sp would have to be 3.67 to get a 4% yield....LOL. So it would appear that FPH is not destined for the portfolio until ..well..probably never. So I guess I probably did the right thing but entirely accidental. In a perfect BB world the div would go up hand in hand with the share price which would have seen a BB gross dividend yield PA of approx. 30%...yowzaaaaa. So much for that theory. Tuis would be definitely of the feathered variety...we have several in the neighbourhood and they are fabulous.. Tuis of the other variety are NOT. However by all means enjoy either or both in your garden.:)
Poet would be impressed with first line... and nice to hear FPH treated you well during its time in your portfolio... I take it you will be waiting for Mr Market to make you a much discounted offer on $10 before FPH again reappears in your portfolio? ... wondering if you are referring to a bird or a beverage in your garden! :cool:

[malus]

I haven't looked at this for a while and this is an interesting share. So current div yield % according to my website is 1.51% which is absolute rubbish. However appears to be one of those shares that attracts and rewards investors looking at share price growth which is admirable. Looking at my chart for what SP should be to get a desired DIV yield % ..Sp would have to be 3.67 to get a 4% yield....LOL. So it would appear that FPH is not destined for the portfolio until ..well..probably never. So I guess I probably did the right thing but entirely accidental. In a perfect BB world the div would go up hand in hand with the share price which would have seen a BB gross dividend yield PA of approx. 30%...yowzaaaaa. So much for that theory. Tuis would be definitely of the feathered variety...we have several in the neighbourhood and they are fabulous.. Tuis of the other variety are NOT. However by all means enjoy either or both in your garden.:)

Yes, as I thought not likely to interest you anytime soon... no tuis in the garden here, but do have some tasty apples though!

[Zaphod]

Despite selling a few shares along the way to fund other investments, I'm continuing to hold quite a large chunk while the SP continues to grow. Should something stifle that, she'll drop like a lead balloon.

The company has an excellent track record and (unfortunately in many respects) a growing market.

[Louloubell]

Craigs just lifted the 12 month price target to $11.90, up approx 25%. very bullish

[malus]

Craigs just lifted the 12 month price target to $11.90, up approx 25%. very bullish

Yes, very bullish... seems their target based on FPH's leadership and success with unique product in the Respiratory and Acute care sector. Will have read through the 60 odd page research report and digest!!

[limmy]

Forsyth Barr has a Neutral recommendation.

[kiora]

Forsyth Barr has a Neutral recommendation.

The lift in TO & price indicates investors with Craigs have more horse power than FB investors :)
Happy to swim with the tide.After selling AKL & SKC recently I hope I've learnt my lesson.Just enjoy it.

[Yoda]

Airvo oxygen equipment will be a big hit. Great piece of work. Google scholar it if you are interested. Positive studies and keeps patients off ventilators which is very expensive 1-1 nursing in Intensive care wards. Its been out now for 2-3 years and gaining world wide traction . Not cheap equipment but cost efective and it is one of a kind.will generate good income. We used to use basic oxygen tubing and still will, but using this more and more. Great service, nice people to work with from the hospital side of things, This can only go one way( for a while anyway...DYOR ) :t_up: Sorry i sold at $3.. Big mistake .. Back in at $8.

[babymonster]

dropping lately wondering has it peaked?

[bohemian]

Up and down like the waves on the ocean. It's the rising tide that matters.
..

[mondograss]

Quite a large chunk of the market dropped today, if anything it's an invitation to buy a little more.

[babymonster]

I did buy some fingers crossed.

[emveha]

Sold and back in. I seem to have an emotional attachment to this company. Their equipment helped save my baby's life, three years ago.

[iceman]

Sold and back in. I seem to have an emotional attachment to this company. Their equipment helped save my baby's life, three years ago.

Now that is a perfectly legitimate reason to have an emotional attachment to this company. Great news and I am very pleased for you.
This company is definitely one of the big success stories of NZ and the NZX. Difficult to lose on this one if you are in for the long term

[Grunter]

Anyone done any analysis on this?

I think FPH is now fairly valued rather than undervalued. Maybe we will see a pullback to the low $9s?

[arc]

Anyone done any analysis on this?

I think FPH is now fairly valued rather than undervalued. Maybe we will see a pullback to the low $9s?


Was wondering when this drop would happen... shakeout time.
1.7Mil crossed, is this the bottom? or the top of another cliff ?

[kiora]

Was wondering when this drop would happen... shakeout time.
1.7Mil crossed, is this the bottom? or the top of another cliff ?

Are you in a typhoon in the deep Pacific?

[Beagle]

Anyone done any analysis on this?

I think FPH is now fairly valued rather than undervalued. Maybe we will see a pullback to the low $9s?

I looked at this yesterday. PE based on last years earnings was 41 before this pullback. A great company with excellent prospects but too expensive for my liking. SP has risen at a vastly greater rate of knots than underlying earnings in the last two years. Reminds me very much of what happened to Ryman a couple of years ago. Brilliant company with excellent management, superb track record and growth outlook that simply got too far ahead of itself. Consensus average of 7 analysts 12 month price target is $9.09 http://www.4-traders.com/FISHER-PAYKEL-HEALTHCAR-6492630/consensus/ Shareholders with over $53m worth of shares today said the SP has got ahead of itself...

[percy]

I have only seen one brokers' research on FPH.
Target price $11.90.
Interestingly enough it was dated 1st April,this year.?
Bit like my RYM,when you are having a "free" ride you just sit back and enjoy the upward trejactory.!..lol.

[kizame]

I have only seen one brokers' research on FPH.
Target price $11.90.
Interestingly enough it was dated 1st April,this year.?
Bit like my RYM,when you are having a "free" ride you just sit back and enjoy the upward trejactory.!..lol.

No such thing as a free ride Percy,you risked money to get there,it is your return on investment.

[percy]

No such thing as a free ride Percy,you risked money to get there,it is your return on investment.

Offcourse they are "free".
Got more than my capital back,
so what are left cost me nothing,,,..." free."
Buy a dozen eggs for $2,sell half a dozen for $2.50,the 6 eggs left are "free" eggs.
Same with shares.

[kizame]

Offcourse they are "free".
Got more than my capital back,
so what are left cost me nothing,,,..." free."
Buy a dozen eggs for $2,sell half a dozen for $2.50,the 6 eggs left are "free" eggs.
Same with shares.

So I go to work for $14/hr,it costs me $12.00/hr to exist,leaving me with an excess at the end of the year, now my time and costs have been paid for,it doesn't matter whether I made $30/hr or $40/hr,that money is the return on investment of my time. Even if I doubled it,it doesn't make that money free. It came at a cost.

[Rawiri]

obviously content with an ROI of 25% over x amount of time if you were to drop those eggs eh!
So does this mean you might not mind if at least a few eggs dont make it home?
or do you believe the brokers target you read was not in fact an april 1st joke and fph is well on track for a price of $11.90 >52 weeks?

[kiora]

obviously content with an ROI of 25% over x amount of time if you were to drop those eggs eh!
So does this mean you might not mind if at least a few eggs dont make it home?
or do you believe the brokers target you read was not in fact an april 1st joke and fph is well on track for a price of $11.90 >52 weeks?

Yes to your last scenario,sooner or latter ;)
Pure platinum with tail winds

[percy]

The good gets better and the bad gets worse.

And FPH is certainly the good.
The very high amount spent on research means a growing number of better products have been brought to market.
The existing markets for FPH are growing rapidly,and FPH are expanding into new markets.
The move to distribute directly in the US should mean FPH stay closer to their customers,and hopefully get a higher margin.
I therefore think the broker's target of $11.90 is achievable.

[kiora]

Nice bounce on a bit of volume

[kiora]

Nice bounce on a bit of volume

Finally hit $10 from $9:12 just over 2 weeks ago.Nice entry point if you didn't have them.Setting up for good announcement?

[Joshuatree]

Full year results close (27th). S/P at a 10 year high( not factoring any dilution).
Craigs forecast $793 mill Rev $241mill EBITDA $140 mill net profit T/P $11.90 which would be a few cents shy of a 4 bagger.

[IAK]

Good article on F & P. Healthcare. http://i.stuff.co.nz:80/business/industries/80340951/analysts-toast-fp-healthcares-success-as-shares-settle-above-10
disc. Holding

[Lewylewylewy]

I think the last two paragraphs or so where the most notable

[Cricketfan]

https://nzx.com/companies/FPH/announcements/283077

Continuing to snooze its way up hopefully.

[Yoda]

Optiflow™ nasal high flow therapy is a real winner. $50 + per patient consumables, and we are using it more and more. Keeping patients off ventilators and BIPAP, and used on anyone who needs oxygen for more that 3 hrs . ... that's a lot of patients . its not been around long so its growth could be outstanding. It cost $NZ 3500 a day to keep a patient in ICU, so this device keeps patents off ventilators and adds to FPH's bottom line. win-win :-)

[IAK]

Full year results close (27th). S/P at a 10 year high( not factoring any dilution).
Craigs forecast $793 mill Rev $241mill EBITDA $140 mill net profit T/P $11.90 which would be a few cents shy of a 4 bagger.

Net Profit of $143m. Operating revenue $815m. Results pretty much in line with Craigs Investment Partners expectations.


Disc. Holding

[kiora]

Great result,great outlook :)

[Grunter]

Good result, maybe revenue missed consensus of $822 million.

Am working on a DCF model for FPH, believe this may be fundamentally overvalued at the moment. Will publish once complete (Capex modelling at the moment!)

I think the prospects of the company are good, but investors may be paying a bit of a premium for that at this stage.

[babymonster]

double digits growth next year as well

[kiora]

Good result, maybe revenue missed consensus of $822 million.

Am working on a DCF model for FPH, believe this may be fundamentally overvalued at the moment. Will publish once complete (Capex modelling at the moment!)

I think the prospects of the company are good, but investors may be paying a bit of a premium for that at this stage.

Investors have been wiling to pay a premium for last 10 years though.Lock away the key.3+ bagger but took longer than TIL

[percy]

Outstanding result.

[babymonster]

You guys take div or DRP?

[percy]

You guys take div or DRP?

I take DRP not only on FPH,but where ever it is offered.
When I stop working I will most probably take cash.
I do not miss getting the dividends,and my holdings steadily increase.
Can't remember what it was say 5 years ago,but I guess the shares I have received have more than tripled in that time.

[kiora]

You guys take div or DRP?

DRP always

[Lewylewylewy]

I take 60% DRP, I find over 30 years, 60 or greater is a magical number

[BlackPeter]

After chasing FPH for years, and always thought that they are a great company, but just too expensive, did I manage to take the plunge today. Just couldn't resist these below $10 share prices ...

Looking forward to a long and hopefully happy relationship ...

[Grunter]

Back up to $10.35. Good company that i'd like to get into, but just can't justify at these prices

[babymonster]

The nzd is not really helping here. Errrr

[percy]

Back up to $10.35. Good company that i'd like to get into, but just can't justify at these prices

Funny you should say that.I thought the same about 7 years ago,but brought some anyhow.Sold a few off to give myself a "free ride",which is still proving to be most enjoyable...lol.

[BlackPeter]

Funny you should say that.I thought the same about 7 years ago,but brought some anyhow.Sold a few off to give myself a "free ride",which is still proving to be most enjoyable...lol.

You are right ... still remember the time when I thought they are a great company but just too dear around $1.50 (must be some 10 years ago) and later $4 per share (only 2 years ago) and I paid for not buying them at this stage (with lost revenues). I guess with FPH you just pay for (so far) nearly unlimited growth potential, proven technology and an already rather de-risked business case (compared to other growth companies).

Sure - there will be a time when competitors and copy cats start cutting into their healthy margins, but at his stage I think they are still in the early growth phase.

Anyway - DYOR

Discl: holding;

[Biscuit]

.....Sold a few off to give myself a "free ride",which is still proving to be most enjoyable....

I did the same ..... and I sure wish I hadn't.... proven to be a very expensive free ride!

[Jaa]

Aussies stealing our stuff again...

FPH FILE PATENT INFRINGEMENT PROCEEDINGS AGAINST RESMED (https://www.nzx.com/companies/FPH/announcements/287296)

[malus]

I'm going to be at the ASM next Tuesday 23 Aug, anyone else planning go?

[Jim]

I'm going to be at the ASM next Tuesday 23 Aug, anyone else planning go?

Where is the venue ?

[BC_Doc]

Where is the venue ?

Ellerslie Event Centre in Auckland

[BlackPeter]

Aussies stealing our stuff again...

FPH FILE PATENT INFRINGEMENT PROCEEDINGS AGAINST RESMED (https://www.nzx.com/companies/FPH/announcements/287296)

Well, its not really Aussies - ResMed's headquarter is California based since 1990.

http://www.resmed.com/us/dam/documents/articles/Corporate-Fact-Sheet.pdf

Looks like as well that while they agree that it was the same idea, they seem to disagree about who stole the IP from whom. They just filed a counterclaim. Now the courts just need to establish who had it first:

https://www.nzx.com/companies/FPH/announcements/287408

Overall - I just hope that they find a way to sort the whole thing without a long court battle. Though its not David against Goliath, but ResMed is larger than F&P and they might have as well some benefits by sitting closer the the US justice system.

However it goes - the clear winner will be a number of lawyers ... lets hope its not the shareholders to loose.

[Biscuit]

However it goes - the clear winner will be a number of lawyers ... lets hope its not the shareholders to loose.

It's bound to be the shareholders who lose in the short term as this just increased risk and uncertainty.

discl. hold

[Jaa]

It's bound to be the shareholders who lose in the short term as this just increased risk and uncertainty.

discl. hold

Agreed, disappointing that two very successful companies couldn't have worked this out by themselves.

[Leftfield]

Agreed, disappointing that two very successful companies couldn't have worked this out by themselves.

Just like Samsung and Apple did !!??

[Grunter]

Well, its not really Aussies - ResMed's headquarter is California based since 1990.

http://www.resmed.com/us/dam/documents/articles/Corporate-Fact-Sheet.pdf

Looks like as well that while they agree that it was the same idea, they seem to disagree about who stole the IP from whom. They just filed a counterclaim. Now the courts just need to establish who had it first:

https://www.nzx.com/companies/FPH/announcements/287408

Overall - I just hope that they find a way to sort the whole thing without a long court battle. Though its not David against Goliath, but ResMed is larger than F&P and they might have as well some benefits by sitting closer the the US justice system.

However it goes - the clear winner will be a number of lawyers ... lets hope its not the shareholders to loose.

It would be interesting to see whether FPH have included IP Insurance as part of their risk management programme. If so, then the effects of this could be negligible. Most likely there will be a settlement one way or another and both parties will move on.

[emveha]

It would be interesting to see whether FPH have included IP Insurance as part of their risk management programme. If so, then the effects of this could be negligible. Most likely there will be a settlement one way or another and both parties will move on.

A good question to ask on Tuesday (I can't be there unfortunately).

[Grunter]

A good question to ask on Tuesday (I can't be there unfortunately).

No doubt that will be "commercially sensitive"

[Biscuit]

It would be interesting to see whether FPH have included IP Insurance as part of their risk management programme. If so, then the effects of this could be negligible. Most likely there will be a settlement one way or another and both parties will move on.

This is one of my bigger holdings but I've reduced last week and this morning. I see this as extra risk on a company well priced for growth. I'll look at buying back once this is resolved, but why take the risk? Surely there is potential here for this to throw a spanner in the works? ResMed have litigated over patents previously and been successful and they have deep pockets.

[In4a$]

This is one of my bigger holdings but I've reduced last week and this morning. I see this as extra risk on a company well priced for growth. I'll look at buying back once this is resolved, but why take the risk? Surely there is potential here for this to throw a spanner in the works? ResMed have litigated over patents previously and been successful and they have deep pockets.
I have done the same just in case price takes a big dive. Buy again when all this is resolved.

[IAK]

1st half net profit guidance $76m up 23% / FY $165m up 15% - low end of earlier forecast due to high NZD. Also FPH to spend NZ$200m on building expansion in NZ and Mexico over next 4 to 5 years. Funded from existing facilities.

https://www.nzx.com/companies/FPH/announcements/287720

[malus]

Thanks for posting IAK... I was at ASM yesterday... haven't had chance to comment yet... currently on the Sky Bus heading for Auckland Airport will comment further tonight when I have key board to work with.

[Biscuit]

I have done the same just in case price takes a big dive. Buy again when all this is resolved.

Bit of a fall today! We dodged that bullet In4a$, even if it is for a different reason!

[percy]

Just received the contract note for the ones I sold, and see I received $10.1378 ps share .
There were buyers at $10.20 when I put them on the market.
Now I see the last sale was $9.90.

[Biscuit]

Now I see the last sale was $9.90.

...and falling

[babymonster]

good opportunity to buy

[RupertBear]

good opportunity to buy

My thoughts too, so did :), it will go down further now ;)

[dagoldtoof]

Bought in at $2.11...Sold two parcels for at the time thought nice profit...Watched it rise and thought will not do that again... will now just sit and hold...

[RupertBear]

Bought in at $2.11...Sold two parcels for at the time thought nice profit...Watched it rise and thought will not do that again... will now just sit and hold...

I made the same mistake a few times, so a holder now as well :D

[kiora]

1st half net profit guidance $76m up 23% / FY $165m up 15% - low end of earlier forecast due to high NZD. Also FPH to spend NZ$200m on building expansion in NZ and Mexico over next 4 to 5 years. Funded from existing facilities.

https://www.nzx.com/companies/FPH/announcements/287720

Looks reasonably well hedged

[malus]

FPH is my second largest holding (12% by value) behind my largest POT (25% by value)

Looking back I see I became a holder in 2007 and have accumulated a few since then with the odd purchase and dividend reinvestment. My average buy in price is $3.192 and my compounding annual return on the investment is a pleasing 17.45%.

The ASM yesterday was a pretty positive affair and using Percy’s words “the Company and its shareholders are well positioned”… can’t add much re the FY17 projection released to the press… it’s the same as we were told at the meeting. I would just note that the Company result is going to reflect exchange rate fluctuations, 99% of its product is sold offshore after all. Talking with Mike Daniell he said that manufacturing in Tijuana (assuming the Mexican Peso tracks the US$) and taking direct control of their sales in the US helps with costs being in the same currency as sales. Setting up a distribution centre in California will help too. (Manufactured product from NZ and Tijuana will be sent to California for distribution).

73% of the product is still manufactured in NZ and working with currency will continue to be a key risk for the Company to manage.

They believe it is a key strength of the company to have the R & D closely associated with manufacturing… hence the additional investment at the Tamaki site rather than offshore.

The Company is marching toward sales of $1b and the take away for me was they believe the market for the Company’s products is strong and they expect growth experienced recently to continue. This being driven by demographics (aging population), an increased spend on healthcare in all countries they market to and that the Company’s products suit hospital systems that are increasingly looking at how they can treat patients at home rather than admit to hospital or discharge sooner into home care with supporting treatment in the home .

Also interestingly for me, even allowing for the capital spend on capacity here and in North America, directors still expect to move to distribution of 70% of profits to shareholders, and continue to reduce their already low (7.7%) gearing. No financial help needed from shareholders at all, unless you would like to pop some or all of your dividends back in!

Of course there was discussion at question time about the action on patents against Resmed and their counter claim. We were told that no detailed discussion could be had beyond what had been announced, due to court confidentially. The Chair made it clear that protecting product research and development by way of patent right was viewed as essential investment in the Company’s success and that they are confident that sufficient resourcing is factored in to managing this key area of risk.

Asked when the court date was set to hear the claim and counter claim, the meeting was advised that US judicial system is not known for speed… could be 2-3 year wait for a hearing!

While on the patent subject, I asked at question time about the reference I had come across that the “average remaining life of FPH patent portfolio is 15.8 years”. This seems to be a weighted average figure of the patent life of products in the FPH range, most patents it seems have around a 20 year life.

So then my question was how is this risk managed, what happens when the competition gets to make the product? Talking to one of the FPH product marketers, he explained that their aim is to constantly evolve/improve/tweak their products so they can seek a new patents and continually reset the 20 year marketing window. Seems over the years they have developed this skill into a core competency if I am to believe what I was hearing, and I had no reason doubt that. (starting to see the moat here folks?)

That’s enough for tonight… will wrap up tomorrow night if you’d like some more?:)

[RupertBear]

FPH is my second largest holding (12% by value) behind my largest POT (25% by value)

Looking back I see I became a holder in 2007 and have accumulated a few since then with the odd purchase and dividend reinvestment. My average buy in price is $3.192 and my compounding annual return on the investment is a pleasing 17.45%.

The ASM yesterday was a pretty positive affair and using Percy’s words “the Company and its shareholders are well positioned”… can’t add much re the FY17 projection released to the press… it’s the same as we were told at the meeting. I would just note that the Company result is going to reflect exchange rate fluctuations, 99% of its product is sold offshore after all. Talking with Mike Daniell he said that manufacturing in Tijuana (assuming the Mexican Peso tracks the US$) and taking direct control of their sales in the US helps with costs being in the same currency as sales. Setting up a distribution centre in California will help too. (Manufactured product from NZ and Tijuana will be sent to California for distribution).

73% of the product is still manufactured in NZ and working with currency will continue to be a key risk for the Company to manage.

They believe it is a key strength of the company to have the R & D closely associated with manufacturing… hence the additional investment at the Tamaki site rather than offshore.

The Company is marching toward sales of $1b and the take away for me was they believe the market for the Company’s products is strong and they expect growth experienced recently to continue. This being driven by demographics (aging population), an increased spend on healthcare in all countries they market to and that the Company’s products suit hospital systems that are increasingly looking at how they can treat patients at home rather than admit to hospital or discharge sooner into home care with supporting treatment in the home .

Also interestingly for me, even allowing for the capital spend on capacity here and in North America, directors still expect to move to distribution of 70% of profits to shareholders, and continue to reduce their already low (7.7%) gearing. No financial help needed from shareholders at all, unless you would like to pop some or all of your dividends back in!

Of course there was discussion at question time about the action on patents against Resmed and their counter claim. We were told that no detailed discussion could be had beyond what had been announced, due to court confidentially. The Chair made it clear that protecting product research and development by way of patent right was viewed as essential investment in the Company’s success and that they are confident that sufficient resourcing is factored in to managing this key area of risk.

Asked when the court date was set to hear the claim and counter claim, the meeting was advised that US judicial system is not known for speed… could be 2-3 year wait for a hearing!

While on the patent subject, I asked at question time about the reference I had come across that the “average remaining life of FPH patent portfolio is 15.8 years”. This seems to be a weighted average figure of the patent life of products in the FPH range, most patents it seems have around a 20 year life.

So then my question was how is this risk managed, what happens when the competition gets to make the product? Talking to one of the FPH product marketers, he explained that their aim is to constantly evolve/improve/tweak their products so they can seek a new patents and continually reset the 20 year marketing window. Seems over the years they have developed this skill into a core competency if I am to believe what I was hearing, and I had no reason doubt that. (starting to see the moat here folks?)

That’s enough for tonight… will wrap up tomorrow night if you’d like some more?:)


Thanks heaps for all that. Very helpful info :)

[percy]

Thanks heaps for all that. Very helpful info :)

A great write up.
thank you.

[IAK]

Thanks Malus very insightful.

[limmy]

Is the 4th site in NZ intended for research or manufacturing? I couldn't get this answer from reading the reports. Thanks.

[Lewylewylewy]

Does anyone know what percentage of the profit the product they stand to lose rights over is worth?

[malus]

Good question limmy... my impression is that the manufacturing and R & D are very much integrated and are not separate 'silos' if you like hence their desire to develop capacity on the same site.

[malus]

Does anyone know what percentage of the profit the product they stand to lose rights over is worth?

I assume you are referring to the Resmed action referred to below in the Company's first press release, unfortunately you aren't going to get such a definitive answer to your question at this very early stage, clearly this decision has not been taken lightly by the management and directors... they have evaluated the absolute need to protect the Companies patent rights against the cost of investing in legal action.


FISHER & PAYKEL HEALTHCARE FILE PATENT INFRINGEMENT PROCEEDINGS AGAINST RESMED
Auckland, New Zealand, 16 August 2016 - Fisher & Paykel Healthcare Corporation Limited announced today that it has filed patent infringement proceedings in the US District Court for the Central District of California seeking judgment that ResMed Inc’s AirSense 10 and AirCurve 10 range of flow generator products, ClimateLineAir heated air tubing for use with such flow generator products and Swift LT and Swift FX masks infringe patents held by Fisher & Paykel Healthcare.
The company alleges that certain of ResMed’s continuous positive airway pressure (CPAP) devices and accessories used in the treatment of patients with obstructive sleep apnea (OSA), and certain of ResMed’s masks infringe on Fisher & Paykel Healthcare patents. Fisher & Paykel Healthcare is seeking all available remedies, including damages and injunctive relief.
Lewis Gradon, Managing Director and Chief Executive Officer, said “Fisher & Paykel Healthcare has invested substantial resources in the research and development of its technologies over the past 45 years. The company has protected that investment through the development of a significant portfolio of more than 1,400 issued and pending patents, and takes infringement of its intellectual property rights very seriously.”

[Zaphod]

The ASM yesterday was a pretty positive affair and using Percy’s words “the Company and its shareholders are well positioned”…



Thanks for the very useful feedback. Most appreciated.



They believe it is a key strength of the company to have the R & D closely associated with manufacturing… hence the additional investment at the Tamaki site rather than offshore.


I had wondered about the logic behind this arrangement. My position has always been that if the Tijuana manufacturing site is meeting or exceeding their required metrics in terms of volumes and quality, then perhaps manufacturing should occur offshore closer to major markets and at a lower price point, with R&D remaining in NZ. It does make sense to have manufacturing coupled with R&D, however 73% in NZ seems awfully high and hence carries significant risks along with the currency related issues mentioned.



Also interestingly for me, even allowing for the capital spend on capacity here and in North America, directors still expect to move to distribution of 70% of profits to shareholders, and continue to reduce their already low (7.7%) gearing. No financial help needed from shareholders at all, unless you would like to pop some or all of your dividends back in!


Given the above, it would be useful to know whether FPH intend to retain the DRP scheme. I'll see what answer I can get out of them via email.

[Biscuit]

Bought in at $2.11...Sold two parcels for at the time thought nice profit...Watched it rise and thought will not do that again... will now just sit and hold...

Learning is a great thing. Hopefully you are not about to get another lesson though.

[limmy]

Good question limmy... my impression is that the manufacturing and R & D are very much integrated and are not separate 'silos' if you like hence their desire to develop capacity on the same site.
Thanks malus. If it's a design centre, we're potentially looking at long(er) term increases in revenue. However if it's a manufacturing facility, it'll be a much shorter term.

[Ghost Monkey]

I don't think we'll be too happy if what Winner is saying over on the Hallenstein's thread is correct. NZD/USD exchange rate heading to 75c and then possibly pushing up to 80c again, and beyond!!! Yikes!

I too believe that the new building is a mixture of both r&d and manufacturing. Interestingly, I've heard this time they are building the car parks underneath the building, presumably to save space and perhaps an extra building in the future. Originally I think they saw 5 facilities at the Auckland site, but seems they are giving themselves extra room, just in case.

[malus]

Attending the ASM gave me the opportunity to view and take in the Company’s products and explore their features and application with engineers and technicians… again a very positive experience. They showed me various aspects of their patented designs and the competitive advantages these provide in the market.

For instance in the neonatal (new born) field where a baby is born not breathing or requires supplementary air, commonly a process of intubation (tube inserted into the lungs) is administered with potential damage to throat and lung tissue, or a mask is placed over the baby’s face, being clumsy and baby naturally resists. A Cannula (instrument that delivers humidified high flow air at body temperature up the nostrils) is another method used.
FPH have developed a very soft cannula with a patented system that sticks to the baby’s face (a bit like a post it note to paper) without the need for taping in place which often damages sensitive baby skin when removed. A mini Velcro system then holds the cannula to the sticky pad. It’s gentle for the baby to wear, but quite robust so that parents can pick baby up and cuddle without fear of interrupting the forced humidified air flow being delivered to the baby’s lungs at a constant temperature of 36C (body temperature).

The staff member I talked to said this was a very successful and popular Company product sold into 120 counties around the world.


In simple terms FPH is a specialist in delivering consistent high flow humidified air at body temperature with minimal condensation. FPH is integrated, designing, manufacturing and delivering either directly to customers or to distributors, humidifying units and the equipment (referred to as the consumables – due to the need to change between patients) to deliver the oxygen rich humid air to the patient at a constant 36C.

The consumables are a major sales item for the company.

Figures I picked up are that FPH is reaching 10 million people annually with its products out of a conservative estimated pool of 100 million that is rapidly growing with aging population.

Has a presence in 36 countries and selling into 120.

Also putting wind in FPH sail is the increasingly positive research evidence confirming that delivering consistent high flow humidified air at body temperature either speeds recovery or significantly aids in relieving symptoms of respiratory illness. As was said to me after the meeting a heath equipment supplier lives or dies on the outcomes of collaborated independent clinical studies. Another area of core competency to co-ordinate, direct and link with R & D.

Another field for the Company is delivering humid CO² for laparoscopic surgery at body temperature. For example, the abdomen is usually insufflated with carbon dioxide gas. This elevates the abdominal wall above the internal organs to create a working and viewing space. CO2 is used because it is common to the human body and can be absorbed by tissue and removed by the respiratory system. It is also non-flammable, which is important because electrosurgical devices are commonly used in laparoscopic procedures.

However, a major issue for surgeons is the loss of body core temperature during surgery. If CO² is humidified and delivered at constant body temperature of 36C research evidence is suggesting there is major gains to be had in patient recovery. A field FPH is supplying and aims to research and develop.

FPH measuring their performance against competitors - again this was a question at the meeting and one the Company executives assured shareholders that they monitored keenly.

Interestingly, Mike Daniells said to me Resmed are not a competitor in FPH core products, but they are competing suppliers of face masks. They watch Respironics (Division of Philips), however, the financial performance of this competitor is less obvious.

Other companies are Boston based Vapotherm which is privately owned, Teleflex listed on NYSE (TFX) and CareFusion, previously F & P distributor in the US.

OK so to the issue of a moat!

The company has proven unique intellectual property and having the best technology is the greatest barrier to competition.

I was talking to Lewis Gradon after the meeting and he said FPH has the market leading humidifier, their newly released F & P 950… this from the 17 Aug press release:

F&P 950 System:

The F&P 950 will provide respiratory support across the care continuum of invasive, non-invasive and Optiflow™ nasal high flow therapies. It is a high performance system that is designed to be easy to set up and use, minimise condensate and provide optimal humidification for patients. The system consists of a heater base with new sensing technologies and consumable sets.

The F&P 950 is the next generation of Fisher & Paykel Healthcare’s heated humidification systems, building on the success of the market-leading F&P 850™ system.

“The F&P 950 system is the result of many years’ development work and we are pleased to be introducing this revolutionary new product to the market,” said Managing Director and CEO, Lewis Gradon. “The F&P 950 incorporates new design improvements, such as integrated probes, a touch screen, intuitive user support, and incorporates our patented Evaqua technology, which minimises condensation. It is an outstanding addition to our range of products and we expect to see positive uptake in hospitals around the world.”

The F&P 950 system has recently completed 50,000 hours of clinical trials, and usability data has shown meaningful results, particularly in the ease of set up for clinicians. Customer feedback has been very positive with 81% rating it as better than, and 99% rating it the same as or better than, the world-leading F&P 850 system.

The F&P 950 system will initially be available in New Zealand and Australia from August, followed by Canada and Europe. It will be available in the United States on receipt of US FDA clearance.


Lewis also said to me after the meeting this unit is market leading, next best unit on the market is the unit it supersedes, the F & P 850.

FPH has reached size in the US where it is able to negotiate with Federal Health Group Purchasing Organisations (GPO’s) to directly supply a US hospitals, a further core competency.

FPH is profitable and can comfortably self-fund growth and it’s market leading, like all companies it must have strategies in place to ensure the owners moat remains in place.

I asked at the meeting for comment on the company’s key areas of risk.

Product failure and recall – an acute awareness of the need to supply rigorously tested proven equipment to the medical industry. Integrated control of R & D, manufacture and supply all help in mitigating this risk. Resmed have experienced product recall.

Protection of Intellectual Property – see the need to manage risk as a core competency.

Regulation – again needs to be a core competency and managed, particularly into the US

Currency – A major item to manage given 99% of the product is sold off shore. Earnings, 47% US$, 21% €.

SAP – Enterprise-wide Resource Planning System (ERP) – a large and complex systems update implemented over manufacturing this year. Global sales offices will transition over the next 2 years.

Looking at the diversity of skills the directors bring to the board table, I believe management will be well supported in planning for and managing these areas of risk.

As to performance, I like:
· the operating margin of 22%
· return on assets at 20%
· return on equity at 26%
· 7.7% gearing
(gearing very conservative, one could almost argue that in the current low interest rate environment the Company could take on some debit and pay special dividend, however, given the business they are in, and capacity expansion planned I’m happy with status quo for now).

I observe, based on revised FY17 guidance as announced, current shares issued and todays share price my calculation of Company PE at FY17 would be around 33 if you were to buy today.

I’m a happy long term holder and pleased I was able to attend the ASM.

Final note in reading this post and my earlier post I remind you to keep an open mind and ensure you do your own research.:)

[babymonster]

Did buy today... :). I will make an exception for buying at that PE

[Out to lunch]

Also went to ASM. So they have to payout 70% divis, spend $200m capex to increase capacity in the next two years, and they're committed to not borrowing by targetting 5 to -5% gearing. Also unfavourable NZD/USD and costly legal case which has penalties and rewards that are hard to quantify. Oh and still planning on doing R+D on 8-9% of revenue.
I can see why price has recently dropped but my gut says the patent case's uncertainty has been overstated in the price.

[malus]

Did buy today... :). I will make an exception for buying at that PE

Good on you... at yesterdays price and FY17 projected earnings by my calculation gives you a 3% annual return with the promise of Company earnings growth to come... whatever that might be, let say 20% year on year, by FY19 your annual return would be around 4.4% based on yesterdays price.

As to capital value of your investment... that will depend on how Mr Market feels about the Company prospects as it reveals its activities leading onto FY19. Mr Market has been pretty bullish with recent PE based on current earnings touching 40.

It's not yet a buy for me, but if Mr Market wants to temp me with price under $9.00 I'd look at it for sure!

[BlackPeter]

Attending the ASM gave me the opportunity to view and take in the Company’s products and explore their features and application with engineers and technicians… again a very positive experience. They showed me various aspects of their patented designs and the competitive advantages these provide in the market.

...



Thank you for a great report - appreciated. You certainly make a good case for FPH having great products, a significant moat ... and being a well managed company.

I suppose you don't work for their marketing team? Maybe you should apply ... ;)

Obviously - as you say yourself in some other post, even great products, good management and a moat does not mean the shares are cheap ... unfortunately the market picked already up on these desirable attributes.

Still - I missed out for a long term in FPH gains, simply because I always thought it is too dear ... and than it went further up. I bought in during the BREXIT dip and believe that while FPH is probably not the best short term deal, it will be a good long term investment.

DYOR;

[malus]

I suppose you don't work for their marketing team? Maybe you should apply ... ;)

LOL I suspect the Company would want full commitment from it's employees with skills far sharper than I have to offer! Besides I wouldn't have time to manage and enjoy my passive income and go tramping when the whim takes me !!


Still - I missed out for a long term in FPH gains, simply because I always thought it is too dear ... and than it went further up. I bought in during the BREXIT dip and believe that while FPH is probably not the best short term deal, it will be a good long term investment.

I've enjoyed the ride over the last 7 odd years particularly recently and agree with you re long term... still will be watching management and product performance as we go along.


DYOR;[/QUOTE]:)

[malus]

I can see why price has recently dropped but my gut says the patent case's uncertainty has been overstated in the price.

I agree OTL, cost likely be be spread over time, possible out court settlement?? FPH initiated the action... being an owner of the Company (albeit minor) I see this as likely part of normal future business given they have 1400 various patents registered in a competitive international market.

[jim9358]

Good on you... at yesterdays price and FY17 projected earnings by my calculation gives you a 3% annual return with the promise of Company earnings growth to come... whatever that might be, let say 20% year on year, by FY19 your annual return would be around 4.4% based on yesterdays price.

As to capital value of your investment... that will depend on how Mr Market feels about the Company prospects as it reveals its activities leading onto FY19. Mr Market has been pretty bullish with recent PE based on current earnings touching 40.

It's not yet a buy for me, but if Mr Market wants to temp me with price under $9.00 I'd look at it for sure!

Under 9 !!! makes my 9.5 offer feel bad!

[malus]

Under 9 !!! makes my 9.5 offer feel bad!

Sorry... that's just me... if it makes you feel better I did reinvest my recent dividend.

[Nasi Goreng]

Maybe FPH has had a good run and is due for a good pull back. If the share price goes below $9, it would technically look pretty bad breaking 200 day average which hasn't been broken in ages. It would signify a downtrend is in place which could bring in to play lower prices but not necessarily a good buying opportunity.

For a company that could do no wrong for such a long time, maybe a bit of doubt is beginning to set in. Can they continue to grow above 15-20% each year? When PE is 37, it demands there is going to continued growth and if at any stage FPH stalls or stutters, share price would drop suddenly. We are not there but perhaps FPH has peaked for the time being... we will see.

[jim9358]

Sorry... that's just me... if it makes you feel better I did reinvest my recent dividend.

LOL changed to 9 ! ....but keeping close watch as now 10th-day downward steps ! :cool:

[BlackPeter]

Nice volume and nice upwards trend this morning. Already up to 975 (and flirting with 979) ... and more than 240k (shares - i.e. well above $2m dollars) through in the first 10 minutes of trading. I guess this was again one of these "buy the dips;)"

Discl: I did ... accumulated yesterday some more :t_up:

[malus]

Nice volume and nice upwards trend this morning. Already up to 975 (and flirting with 979) ... and more than 240k (shares - i.e. well above $2m dollars) through in the first 10 minutes of trading. I guess this was again one of these "buy the dips;)"

Discl: I did ... accumulated yesterday some more :t_up:

Yes BP looks like I'll be waiting a while for $9... patience is virtue!:mellow:

[Joshuatree]

Came very close to breaching 180DMA. Doesn't look good to my basic T/A eye.Watching closely.
Craigs say"don't lose sleep over guidance downgrade" "adverse currency movements"..."new products a platform for of growth".....FY18 may be impacted by lawsuits....T/P unchanged @$11.20 mmmmh.

[BlackPeter]

If you happen to be that day in Christchurch and want to hear more from Tony Carter (FPH - board chair, next to many other roles) - here is your opportunity:

http://www.sharetrader.co.nz/showthread.php?10332-NZSA-Canterbury-meetings-amp-seminars&p=639524&viewfull=1#post639524

[babymonster]

Gees...... my order is about to get filled...

[BlackPeter]

Gees...... my order is about to get filled...

Hmm ... good company but now well below MA200. Might be just a blib, but might be as well something more sinister (like the markets realising that the share it too dear). Too early to say, whether this develops into a falling knife, but below the MA200 is this always a risk worthwhile considering ...

Sold mine out and waiting for stabilisation ...

[BlackPeter]

eek - dropped through the resistance level at 910. Minor play now with the 900 and next major stop between 830 and 840?

[RupertBear]

eek - dropped through the resistance level at 910. Minor play now with the 900 and next major stop between 830 and 840?
Caught a few at $8.92 but may have lost a few fingers catching the falling knife...time will tell...lucky I have a few more ;)

[iluab]

eek - dropped through the resistance level at 910. Minor play now with the 900 and next major stop between 830 and 840?

8406

Just like a number of NZ50 stocks, broken now, it's the largest NZ50 correction since 2010, so far.

[RupertBear]

8406

Just like a number of NZ50 stocks, broken now, it's the largest NZ50 correction since 2010, so far.

Ooops should have learned from loosing both my hands and feet buying Wynyard :(

[malus]

8406

Just like a number of NZ50 stocks, broken now, it's the largest NZ50 correction since 2010, so far.

Hmm... Mr Market having a hissy fit and the stock is looking more attractive as buy, like BlackPeter says good time to wait for stabilisation... this price brings PE down to a more reasonable level.

[Nasi Goreng]

I wouldn't call the PE a more reasonable level. I would just say it's lower... it's still 35 and there are a smorgasboard of good growth companies out there globally with a PE lower than 35.

Just because the market was prepared to pay high multiples for FPH in recent history does not mean it will continue to do so. This could drop a whole lot more and still look expensive.

[percy]

I played around with some figures a few weeks ago.Expenditure in NZ and Mexico,increasing NZ $,very low dividend yield, and came up with a growth rate of under half the PE,so sold.Been a very long term holder.

[Biscuit]

I played around with some figures a few weeks ago.Expenditure in NZ and Mexico,increasing NZ $,very low dividend yield, and came up with a growth rate of under half the PE,so sold.Been a very long term holder.

I've been selling for a while: sold some at 340, some at 410, some at 665 and finally got it right by selling some at 1020

[mondograss]

I played around with some figures a few weeks ago.Expenditure in NZ and Mexico,increasing NZ $,very low dividend yield, and came up with a growth rate of under half the PE,so sold.Been a very long term holder.

Except that the NZ $ is unlikely to keep increasing, much of the selling that's going on is due to both the NZX and NZD being overvalued.

[Lewylewylewy]

The only thing I'm worried about is the legal costs in the ledger at the end of the year, and maybe the legal risks a bit too.

[malus]

I wouldn't call the PE a more reasonable level. I would just say it's lower... it's still 35 and there are a smorgasboard of good growth companies out there globally with a PE lower than 35.

Just because the market was prepared to pay high multiples for FPH in recent history does not mean it will continue to do so. This could drop a whole lot more and still look expensive.

Yes you have a point... and Percy has highlighted some of the potential down side that lead to him to selling at recent perceived past high share price... there is confidence within the Company that they can continue grow 25% year on year, so a PE of 25 may be a fair price?... but nothing is a given and NZX index has come off all time highs... FPH was one of a number that helped the overall index run up.

[iluab]

Add to the chart Friday's death cross, technically it just looks precipitous, and with a forward PE still at 34, I could see this easily pulling back to the $6 to $7 range over time. 8415

[Lewylewylewy]

Add to the chart Friday's death cross, technically it just looks precipitous, and with a forward PE still at 34, I could see this easily pulling back to the $6 to $7 range over time. 8415

Agree, unless they announce progress with the legal issues, which will send it soaring in the other direction.

[Baa_Baa]

Add to the chart Friday's death cross, technically it just looks precipitous, and with a forward PE still at 34, I could see this easily pulling back to the $6 to $7 range over time. 8415

Agree, the breakdown through the 200MA 17 Oct was profound and then again another breakdown Oct 26 through the two-year rising trend line (now resistance) signalling the end of the Apr'14 to-date uptrend. Unless it recovers, the range $7 - $7.75 support is in play (with some lesser supports in the 8 - 8.25 range).

[BlackPeter]

I see FPH seems to recover together with the other down beaten stocks. However - just wondering ... how much is a company with a big factory in Mexico (and exporting basically all production into the US) worth these days?

Trump promised to break ("re-negotiate") trade agreements and increase tariffs. On the other hand - a tanking Peso obviously makes production for FPH still cheaper.

How much damage will this do to FPH?

Not sure I would be tempted to buy back in quite yet ...

[babymonster]

still to early to say but seems the healthcare stocks in the us are rising...
overall high usd is good for FPH.

[Biscuit]

I see FPH seems to recover together with the other down beaten stocks. However - just wondering ... how much is a company with a big factory in Mexico (and exporting basically all production into the US) worth these days?

Trump promised to break ("re-negotiate") trade agreements and increase tariffs. On the other hand - a tanking Peso obviously makes production for FPH still cheaper.

How much damage will this do to FPH?

Not sure I would be tempted to buy back in quite yet ...

Personally, for the reasons you state, I'd be selling today if I still had any. Highly priced, trending down, uncertainty over patents, uncertainty over mexico/USA. Too much uncertainty for me although it may benefit from exchange rate changes between USA/NZ and USA/Mexico. Who knows.

[Zaphod]

IMO the FPH SP will be very sensitive to any proclamations that Trump makes regarding tariffs and the trade relationship with Mexico in general.

We are still many months away from any actual changes being made and even then, the senate and congress will most likely force a moderation of Trump's policies.

Despite FPH being one of my longest held stocks, I'm selling down.

[kiora]

IMO the FPH SP will be very sensitive to any proclamations that Trump makes regarding tariffs and the trade relationship with Mexico in general.

We are still many months away from any actual changes being made and even then, the senate and congress will most likely force a moderation of Trump's policies.

Despite FPH being one of my longest held stocks, I'm selling down.

Yes BUT FPH labor costs just got a whole lot cheaper with Peso devaluation

[Zaphod]

Yes BUT FPH labor costs just got a whole lot cheaper with Peso devaluation

My concern is that the advantages derived from devaluation of the peso could be quickly negated through the imposition of tariffs. Trump needs manufacturing to be a success in the US in order to compensate for the proposed massive reduction in the corporate tax rate (35% to 15%), and increased infrastructure and military investment. Large tariffs will be an easy sell to the electorate, given the current divisive political environment, and the potentially negative changes to NAFTA.

We won't know the details of this until after his inauguration, however I remain concerned given how strategic the North American market is for FPH.

[Lewylewylewy]

Positive result, shares go up. Trump knocks TPP, shares go down.

Bad time to be building a $15m building in Mexico.

Still, there's enough cushion in the profit margins for a disaster, provided that FPH respond correctly.

Scott for SP to drop really low here, which could be a good buy if there's recovery ability ahead.

Like the low gearing, at least. Didn't like the lack of information around court costs. Cba to compare this year's cost increase relative to profit increase, with previous years to see if there are big abnormalities. Think I'll just made the bad call and ride it all out until it comes back up in 2-5 years time.

[babymonster]

Good result but still a bit uncertain how trump is going to deal with Mexico and what that could affect its operation in Mexico. Good buying opportunities imo. Personally i think it will be just like brexit and trump victory, shares bounced back once they are out of the way

[trader_jackson]

Possible Mexico tariffs a concern for F&P Healthcare Paywall NBR article... what I've said on another thread a few weeks back... May not be so cheap with tariffs and any other anti-competitive things Trump wants to do regarding Mexican made goods

[babymonster]

the MD of FPH comment on the mexico traffis issue and don't really think it will impact that much atm, and they just might have to ship from NZ to USA and ship from Mexico to other places

[Beagle]

Nice lady analyst at Forbar reckoned the other day the recent SP correction was unwarranted, (SP was $9 at the time). The Stock is getting absolutely drilled and from a technical perspective the chart looks terrible.
She obviously isn't one to believe in technical analysis. Trump a loose cannon, who's to say anything manufactured in Mexico isn't slapped with a large tariff no matter what its subsequent freight routing including interposing another country like N.Z. in the freight route ? Classic case of shoot first with the sell button and ask questions later and why not !

[Joshuatree]

Downgrade to hold from Craigs.Strong result but litigation and injunction risks with RMD should FPH lose.

[Biscuit]

Downgrade to hold from Craigs.

Downgrade to hold! So they have been recommending it as a buy the last couple of months? Is probably getting into territory where its worth watching again IMHO.

[iluab]

Downgrade to hold! So they have been recommending it as a buy the last couple of months? Is probably getting into territory where its worth watching again IMHO.

Morningstar, for what its worth, upgraded today to accumulate with a price target of $10.

I reckon it could go to easily go into the $6 to $7 range first though, investors are still abandoning and dumping high div yield stocks, technical's just look terrible at the mo, and there seems to be a Trump sentiment overhang for FPH for now, short lived though that one in my view.

[longy]

I think Intelligent Investor upgrade from Sell to Hold two days ago.

[Harley]

To impose a blanket "Large tariff" on goods from Mexico entering the USA would seriously hurt American manufacturing plants that rely on cheaply made components from Mexico. So no, that ain't going to happen. FPH, Patent protected gold standard medical gear that improve the lives of millions of Americans, bit different to the standard Mexican Potato.

[BlackPeter]

To impose a blanket "Large tariff" on goods from Mexico entering the USA would seriously hurt American manufacturing plants that rely on cheaply made components from Mexico. So no, that ain't going to happen. FPH, Patent protected gold standard medical gear that improve the lives of millions of Americans, bit different to the standard Mexican Potato.

Sure - any tariffs will hurt Americans, that's what trade restrictions always do to the country initiating them ... but I don't think that the current chorus of haters and nationalists over there will be easily convinced by rational arguments. As well - FPH is not the only manufacturer of this equipment, and some competitors (e.g. their preferred sparring partner in court) do manufacture in the US.

[Harley]

Sure - any tariffs will hurt Americans, that's what trade restrictions always do to the country initiating them ... but I don't think that the current chorus of haters and nationalists over there will be easily convinced by rational arguments. As well - FPH is not the only manufacturer of this equipment, and some competitors (e.g. their preferred sparring partner in court) do manufacture in the US.
Trump’s recently released plans for the first 100 days in office – His proposed action on Trade – withdraw from the TPP. That’s it.
No mention of NAFTA, which he described when campaigning as the worst trade deal ever. Surely that would make it his number one priority?
You know that Donald will say whatever is needed to get himself elected what happens after that is dependant on the resulting growth of his personal wealth.

[Zaphod]

Trump’s recently released plans for the first 100 days in office – His proposed action on Trade – withdraw from the TPP. That’s it.
No mention of NAFTA, which he described when campaigning as the worst trade deal ever. Surely that would make it his number one priority?
You know that Donald will say whatever is needed to get himself elected what happens after that is dependant on the resulting growth of his personal wealth.

The other policies such as those involving renegotiation of NAFTA will require congressional approval, which will take much longer to implement but are still very much on the cards. This point was reiterated by Trump during a recent interview.

[Joshuatree]

Downgrade to hold from Craigs.Strong result but litigation and injunction risks with RMD should FPH lose.

And now they have an "overweight" rating with suggestions for large holders to reduce; for the same reasons saying a negative outcome with Resmed is more likely.

[Lewylewylewy]

And now they have an "overweight" rating with suggestions for large holders to reduce; for the same reasons saying a negative outcome with Resmed is more likely.

I wonder what the state of the legals are. The company wouldn't tell me because it's an ongoing legal case.

My knowledge about the American legal system is that whoever has the most money and power wins, so FPH should lose. Obviously FPH is fighting hard, they've even brought someone with legal experience onto the board... Will that be enough?

[Harley]

Is the SP being driven down today by the apparently impossible to win legal action OR the Trump imposed astronomic Mexico border tariffs? or is this just an undefendable two pronged attack?, no wonder the SP is heading South.

[mondograss]

Neither, the market is just generally down.

[Harley]

There's more gainers today than decliners.

[mondograss]

Not on the tech side

[babymonster]

finally some good news.. hopefully RMD can stop hassling us

[JayRiggs]

Great to see directors increasing their holdings and Northcape Capital becoming a substantial holder too.

[BlackPeter]

finally some good news.. hopefully RMD can stop hassling us

Yes, great they won the first battle in a German court.

However - I'd assume the US market is more important for them than the European one, and the US has different patent laws, its own patents and a totally different judicial system. As well - their adversary is sitting in the US and will have more resources to put into the legal battle.

So - while it is great to hear that they are now allowed to sell their products in Germany again, it does not mean the whole thing is over. A good first step, but I think the markets overreacted to this message (as they do).

[babymonster]

market usually overacts to either good or bad news.. but same here, i was surprised it is up that much... still needs to wait for the aussie market open tho

[Joshuatree]

FPH Successful in German Court Proceedings (https://www.nzx.com/companies/FPH/announcements/293697) A tonic for the troops for sure.Heres hoping more success ahead.

[kiora]

Out with the old,in with new

[macduffy]

Out with the old,in with new

That's working for me -so far! Sold TWR last month and bought FPH.

:)

[ohpark0119]

What happened today

[BlackPeter]

What happened today

Good question.

Quite significant volume (considering its in the middle of the holidays). As well funds would be more interested in window dressing on the last trading day of the year than in pushing share prices down.

Maybe somebody noticed it is just 3 weeks until Trump corrupt takes over the US of A. His threat of breaking trade deals and imposing high import tariffs on everything from outside (supposedly unless the buying company is owned by his children) will hurt alien companies like FPH ...

Discl: very happy to wait with this stock on the sidelines ...

[Beagle]

Good question.

Quite significant volume (considering its in the middle of the holidays). As well funds would be more interested in window dressing on the last trading day of the year than in pushing share prices down.

Maybe somebody noticed it is just 3 weeks until Trump corrupt takes over the US of A. His threat of breaking trade deals and imposing high import tariffs on everything from outside (supposedly unless the buying company is owned by his children) will hurt alien companies like FPH ...

Discl: very happy to wait with this stock on the sidelines ...

Agree 100% with you on this one BP. I noted with quite some interest that this was the most favored stock with the brokers picks for 2017, (4 brokers) but to buy now you have to be so brave as to ignore strong technical analysis suggesting you wait and take a wild punt on Donald Trump playing fair.

[Nasi Goreng]

Even with a 6 handle this stock is expensive. The winds have changed.

[BlackPeter]

Just looking at the trend - SP went through MA30, MA50 and is now touching MA100. Investors with a high risk tolerance might consider at this stage to get back in.

On the other hand - I am wondering whether the current uptrend is potentially just a blip due to the recent brokers recommendations for 2017 (FPH is in the top five of several brokers, which may or may not mean anything) ... and might run out of steam after people sorted their 2017 portfolios. I still see a significant risk of FPH being trumped ... but then - who knows?

[Biscuit]

Just looking at the trend - SP went through MA30, MA50 and is now touching MA100. Investors with a high risk tolerance might consider at this stage to get back in.

On the other hand - I am wondering whether the current uptrend is potentially just a blip due to the recent brokers recommendations for 2017 (FPH is in the top five of several brokers, which may or may not mean anything) ... and might run out of steam after people sorted their 2017 portfolios. I still see a significant risk of FPH being trumped ... but then - who knows?

Still seems too much risk to me to buy now at this price (US protectionism, patent, currency...), great growth company though.

Discl: hold

[RupertBear]

Still seems too much risk to me to buy now at this price (US protectionism, patent, currency...), great growth company though.

Discl: hold

Great company but Trump fear overtook me today and I sold out. Hope to buy back in if/when the price goes down but in the meantime happy to watch from the sides even though it will probably rocket up now that I have sold ;)

[freebee]

Looking like a good call for today RB. It's rocketing, but not upwards. Looking like FPH might have to help finance Donalds wall.

i'm still holding and hoping normal transmission will be resumed with this good company.

[Zaphod]

Great company but Trump fear overtook me today and I sold out. Hope to buy back in if/when the price goes down but in the meantime happy to watch from the sides even though it will probably rocket up now that I have sold ;)

I've sold 75% of my holding. Today, Trump has announced that he will seek a "20% tax on all Mexican imports".

[Cricketfan]

Response from FPH about the Mexican tax: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11789947

[babymonster]

i do want to buy a bit more... though i have no fund and don't really want to sell my pot holding... Errr...

[Yoda]

Add to that, "Only buy American made"... Not a good combo

[Joshuatree]

Hope it falls off a cliff then i can top up a true blue stock like i did with RMD some time ago; good result out btw for RMD.holding both

[trader_jackson]

Possible Mexico tariffs a concern for F&P Healthcare

Paywall NBR article... what I've said on another thread a few weeks back... May not be so cheap with tariffs and any other anti-competitive things Trump wants to do regarding Mexican made goods

Share price is up 5.7% since I mentioned this on the 22nd of November so I believe F&P is still 'not cheap' mainly due to, in my view, there being alot of uncertainty around that the market is currently still mostly ignoring.

With up to 3 months warning, this shouldn't be a surprise to the market, yet the share price reaction today (although still modest) would say otherwise.

[Joshuatree]

About 40 of the company's competitors - including its US competitors - also have operations in Mexico.
"Most of our competitors in most of our products - including our US competitors - would be in exactly the same boat," Gradon s nz herald

[Lewylewylewy]

I had a chat to the GM the other day. Marcus. A good guy, seems intelligent and knows the business very well (at least that's the impression I got).

He said that he thinks the market has over reacted to all the goings on. He addressed the legal issues, saying that it hasn't financially hurt the businesses costs that much and said that profit guidance was still on target (which is important because it means that the competition aren't buying "justice" through the US legal system - which IMO increases the chances of positive outcomes). He also said that people were getting their info from the media who weren't always getting it right / or stirring up a storm (can't remember his words on this, but the theme was generally media = BS).

He also addressed the Trump concerns saying that if there's a nasty tax targeting Mexico specifically, they can produce out of NZ factories. If there's a blanket tax across all exporting countries, then this would effect the competition equally and we'd be no worse off (from a cost point of view).

The fact is that risks are already in a position where they can be mitigated, partially or completely.

I think FPH is currently the best buy on the market at the moment. I was going to buy more after chatting with him yesterday, but decided to wait until the next panic attack when trump actually implements a tax (currently, I suspect that the market has only priced in the risk of a tax). Also, I figured I'd enjoy the gains on a few other short hold shares I have (RBD and some others) before committing to a longer term hold share like FPH.

My view: FPH will likely go up a bit for a while, then drop a bit more in the future on news of tax, then go up loads once it blows over and reports come out.

[Lewylewylewy]

PS: FPH is never cheap, because it's such a high growth stock. Depending on how you slice it, it could be a good or bad buy, depending what you're after. However, no matter which way you slice it, it's always a good buy if you plan to hold for 18 years or more (by my shaky maths) :)

[Beagle]

PS: FPH is never cheap, because it's such a high growth stock. Depending on how you slice it, it could be a good or bad buy, depending what you're after. However, no matter which way you slice it, it's always a good buy if you plan to hold for 18 years or more (by my shaky maths) :)

Even with the recent correction its on a PE of 31.

[Joshuatree]

Same in 2014


I have halved my holding, while some analysts have now forecast a high target price (nearly $5), this stock has had a very good run, and reflects no downside risk for the currency. Was great buying @ $2.50, now its looking pretty expensive above $4. Trading on almost a 30 P/E.

[babymonster]

good stocks won't be cheap.

[Zaphod]

He also addressed the Trump concerns saying that if there's a nasty tax targeting Mexico specifically, they can produce out of NZ factories. If there's a blanket tax across all exporting countries, then this would effect the competition equally and we'd be no worse off (from a cost point of view).

The problem is, he is not in a position to reassure anyone on the impact of Trump's policy on tariffs as no-one, including Trump, knows what Trump will decide to impose. Trump is a loose cannon. That is the issue, and while FPH is a good company with excellent products & management, it is a risk that I have mitigated by selling down my very long term holding while the SP was much higher.

[RupertBear]

Kiwi firm builds bigger factory in Mexico as Trump talks tariffs

http://www.stuff.co.nz/business/industries/88868478/kiwi-firm-builds-bigger-factory-in-mexico-as-trump-talks-tariffs (http://www.stuff.co.nz/business/industries/88868478/kiwi-firm-builds-bigger-factory-in-mexico-as-trump-talks-tariffs)

[macduffy]

So what's the good news that's propelled FPH back up over $9? Talk of a free trade deal with Mexico? You-know-who going soft on trade?

Disc: Bought a few more at $8.87 recently and was starting to regret it!

[hogiela]

So what's the good news that's propelled FPH back up over $9? Talk of a free trade deal with Mexico? You-know-who going soft on trade?

Disc: Bought a few more at $8.87 recently and was starting to regret it!


FPH is never a bad investment ... in fact it's been my best investment overall in the past 3 years since I've worked at the company ;)

[kiora]

FPH is never a bad investment ... in fact it's been my best investment overall in the past 3 years since I've worked at the company ;)

Keep on hogging it ela

[winner69]

The Value Creators Report from Boston Consulting Group always a good read. Starts by looking at 44,000 companies to come up with the real value creators in the world.

In the 2016 report FPH are the 9th ranked company in the Medical Technology sector with a 5 year TSR of 29% pa. Profit growth has driven 15% of this, dividends 6% and higher valuation multiple 8%.

One of worlds great companies

Well done Fisher & Paykel Healthcare

(Resmed didn't make the list this time around)

[Joshuatree]

Very pertinent info thanks w69. This shows why investment grade stocks(and there are not many) maintain the high PE's they do and that when a rare opp to top up comes; investors in these investment grade stocks ;with long track records, eagerly welcome the chance to add.
Holding FPH and RMD.

[Lewylewylewy]

Does anyone know why SP growth was largely flat prior to 2010 for FPH?

[winner69]

Does anyone know why SP growth was largely flat prior to 2010 for FPH?

earnings were pretty flat 2009/2013 and the market was relativitly flat as well

So essentially not much to get excited about

Have a lot at chart of FPH compared t0 NZ50 over that period and see if that helps explain things .......and since a pretty good PE expansion has boosted FPH share price.

[winner69]

Does anyone know why SP growth was largely flat prior to 2010 for FPH?

Another go at answering after updating my files

The chart below is FPH share price over the years (monthly) and what the share price would have been if FPH traded at a PE of 30


FPH has never always been a 'growth' company. EPS in 2012 at 12.2 cents was about the same as in 2005 of 12.1 cents. Had down years in 2008 and 2009 and 2011 (memory says NZD to blame) but over the period 2005/2012 earnings didn't really grow. Follow the black line on the chart (which is share price would have been if FPH traded at 30 times earnings)
To answer your question you can see the share price sort of followed earnings - sort of flat. Interesting FPH's PE ranged between 19 in 2012 and over 40 in 2008 when earnings crashed.
It has only been since 2012/2013 that FPH has seen real earnings growth - from an eps 12.2 cents in 2012 25.6 cents in 2016 and forecast to be 29 cents in F17. So last few years earnings have grown at 20% pa. Question- how long can this continue.
Between 2005 / 2016 the average PE has been just under 30
If one assumes a PE is about right for FPH the current share price is about 'right'
The dotted line on the chart is actuals and analyst forecasts thru to 2019 and what the share price would be at a PE of 30
Remember PEs are a measure of sentiment and punters sentiment can quickly change



Always an interesting way to look a stocks share price over time - you can see when FPH has been under valued and over valued (based on this PE assumption of 30). One of those investment guru's (Graham or somebody likes using such charts)

lewy - you into FPH in a big way?

There endth today's lesson - jeez the cricket is boring

[winner69]

It was Peter Lynch of Beating the Street fame that liked doing those charts i showed above.

[Lewylewylewy]

Thanks W69.

Not in a big way, I have a small holding. I have them categorised as a "long term growth" share, which for me means that they are one of the shares that I allow myself to gamble on, because if I lose out, I'm happy to hold until they eventually come around. What's happening with them right now and in the near future interests me. I'm hoping for trump to announce a tax to cause fear so I can get in big, but I'm trying to assess the true impact of what such a tax might do. FPH mentioned that if it goes to poo, they can produce out of NZ and still compete against competition manufacturing from Asia as they did in 2010 and prior. What intrigues me at the moment is that the 2010 and prior SP wasn't as exciting as it is now.

So what's currently on my mind is:

- Do they actually have proven history of competing in such an environment? (will the SP be rerated to a lower PE due to a lesser performance?)
- What sort of tax will occur in terms of which countries are targetted? Trump mentioned Ghina and Mexico. Obviously Mexico would hit FPH hardest, but how would a tax on Ghina effect the currency value in other parts of Asia where the competition manufactures, and how will this effect the ability to compete from NZ?

Essentially, how whomped could FPH get in various scenarios and what's the most likely scenario (time will tell)?

I don't think a good whomping would take FPH out of my long term growth category, because I think they could recover in 2 years by changing the manufacturing location... But it all depends.

[Snow Leopard]

It was Peter Lynch of The Intelligent Investor fame that liked doing those charts i showed above.

The Intelligent Investor was Benjie Graham.

Peter Lynch is the Mad Butcher of Wall Street.

Best Wishes
Paper Tiger

[winner69]

FPH down 2% today on ASX today

Hmmm

[Beagle]

Another go at answering after updating my files

The chart below is FPH share price over the years (monthly) and what the share price would have been if FPH traded at a PE of 30


FPH has never always been a 'growth' company. EPS in 2012 at 12.2 cents was about the same as in 2005 of 12.1 cents. Had down years in 2008 and 2009 and 2011 (memory says NZD to blame) but over the period 2005/2012 earnings didn't really grow. Follow the black line on the chart (which is share price would have been if FPH traded at 30 times earnings)
To answer your question you can see the share price sort of followed earnings - sort of flat. Interesting FPH's PE ranged between 19 in 2012 and over 40 in 2008 when earnings crashed.
It has only been since 2012/2013 that FPH has seen real earnings growth - from an eps 12.2 cents in 2012 25.6 cents in 2016 and forecast to be 29 cents in F17. So last few years earnings have grown at 20% pa. Question- how long can this continue.
Between 2005 / 2016 the average PE has been just under 30
If one assumes a PE is about right for FPH the current share price is about 'right'
The dotted line on the chart is actuals and analyst forecasts thru to 2019 and what the share price would be at a PE of 30
Remember PEs are a measure of sentiment and punters sentiment can quickly change



Always an interesting way to look a stocks share price over time - you can see when FPH has been under valued and over valued (based on this PE assumption of 30). One of those investment guru's (Graham or somebody likes using such charts)

lewy - you into FPH in a big way?

There endth today's lesson - jeez the cricket is boring

Good post mate. I struggle to see value even after the recent correction. PE of 30 given their long term track record of growth which is hardly stellar and foreseeable challenges ahead good value ?

Interesting that RYM arguably the preeminent blue chip growth story of the entire market trades at about a 5 PE discount (around 25 times underlying FY17 projected earnings).

[BlackPeter]

Interesting oscillation between MA100 (upper boundary) and MA30 (lower boundary). Wondering how this is going to end - break out upwards or the gap between the MA's opening again??

[percy]

Using the 100 day EMA and the 200 day EMA,I would say the chart does not look good,with the sp below both.!.
Share price $8.92
100 day EMA $8.96
200 day EMA $9.10.

[BlackPeter]

Using the 100 day EMA and the 200 day EMA,I would say the chart does not look good,with the sp below both.!.
Share price $8.92
100 day EMA $8.96
200 day EMA $9.10.

You are probably right. Would be good anyway, like to buy in cheaper than that;).

[Joshuatree]

courtesy of 4traders

Estimates in M NZD


Fiscal Period March
2014
2015
2016
2017
2018
2019


Sales
623
672
815
902
1 022
1 148


Operating income(EBITDA)
173
202
246
277
325
377


Operating profit (EBIT)
143
170
211
239
282
328


Pre-Tax Profit (EBT)
137
159
201
236
278
319


Net income
97,1
113
143
168
198
230


P/E ratio
-
-
-
30,6
25,9
22,3


EPS (cts NZD )
17,4
19,9
25,0
29,5
34,7
40,4


Dividend per Share(cts NZD )
12,4
13,8
16,7
19,8
24,2
29,2


Yield
-
-
-
2,20%
2,69%
3,24%


Reference price (cts NZD )



900
900
900


Announcement Date
05/23/2014
10:49am
05/29/2015
12:30am
05/27/2016
12:10pm
-
-
-

[percy]

Thanks JT.
We can see the market is prepared to pay a PE of 30.6 for eps growth of 18%, ie eps rising from 25cents ps to 29.5cents ps.
We can then see the then projected eps growth is between 16% pa and 17.6% pa.
The market is more generous than me.
I also note the market is prepared to pay a forward PE of over 40 for POT.Interesting?
I remain content buying shares where the PE is lower than the growth rate.It really works.!!

[44wishlists]

Hello share traders! New to the forum, and a modest holder of FPH. Not a particular good day for FPH dropping from day high of 920, and closed at 897.

[BlackPeter]

Hello share traders! New to the forum, and a modest holder of FPH. Not a particular good day for FPH dropping from day high of 920, and closed at 897.

Hi 44wishlists ... welcome to the forum. How would you like us to abbreviate your name - 44?

You are right re FPH SP drop today, though - it is since October 2016 below the MA200 - i.e. it is technically in an unbroken downtrend and behaves accordingly.

Personally I think the SP will continue to be volatile as long as the big disruptor (Trump - controlling FPH's largest target market) hangs around. As well - while it is a good company, it still does not look cheap (using the Grahams formula to assess) ... and the market might use the current uncertainty to move overpriced stock prices towards some more sensible pricing.

DYOR and - no, not holding myself. Might move in if & when it looks cheap.

[44wishlists]

Thanks for the warm welcome BP! 44 sounds like a good title!

Absolutely, with its current SP, it maybe more appealing for investors who can tolerance higher risk.

[Lewylewylewy]

$8.97 is a good long term investment, but it's too high to be trading super short term with, with a Trump tax potentially around the corner. A good bet if you have spare cash and are happy to put it in the bottom drawer if it goes south.

If Trump (AKA Quick Draw McGraw the shoot-from-the-hip make policies now, ask questions later cowboy president of the USA) opens his face hole and noise about import tax starts coming out before the results are published from FPH, then it'd have been a bad investment. However, I think the price could go up after the next FPH announcement, especially if some time passes after that and still no tax talk from Quick Draw.

Personally, I haven't concreted my plans on my personal house situation, so I don't have cash to gamble on this stuff. If I did, I'd take a parcel at that price.

[Lewylewylewy]

I figure these are tracking upwards a bit as it seems people feel like Trump's ability to action tax change could be just hot AIR.

[44wishlists]

I listened to Mr Trump's first speech to Congress today. Although it was a claim speech, I decided to walked away with some profits from my current FPH holding, and stand on the sideline to monitor its movement.

[Joshuatree]

Pretty strong breakout on big vol.Am liking the look of this.

[kiora]

Pretty strong breakout on big vol.Am liking the look of this.

Yes.Been happening for a while now. Suggesting patent litigation is going to be favorable???

[hogiela]

Yes.Been happening for a while now. Suggesting patent litigation is going to be favorable???

The mood at FPH is still good in regards to the litigation, however it's likely to be a long drawn-out process ... both Resmed and FPH speak favourably of their chances to win the proceedings :)

[Jaa]

Milford's portfolio manager, Mark Warminger has been convicted of violating securities law for trades in FPH on 27 May 2014.

As an investor in both FPH and a Milford KiwiSaver fund at the time I am horrified at the facts of the case.


Having told a broker on the day in question he was a seller at $4.35 a share, he then entered the market to buy small volumes at prices from $4.32 to $4.34.
“His subsequent DMA purchases resulted in an average profit per share of a modest fraction of one cent on the volume purchased for a total profit of $656. He would have lost money on the last purchase of 5,000 shares at $4.34 after brokerage was taken into account. By contrast, if his DMA activity led to the increased sale price of $4.35 it improved his crossing price by 3c resulting in a benefit of around $16,350.”

Read more: https://www.nbr.co.nz/article/warminger-manipulated-market-court-finds-th-198012

Well done to the FMA and shame on Milford who I trusted to upheld higher ethics than this. Instead they have continually downplayed this issue and refused to state that this behavior is unacceptable or even fire the guy (he was placed on leave) despite paying a large settlement to the FMA.

I expect the fund managers of my super fund to spend their time researching shares and industries not monkeying about with share prices to artificially inflate a fund's price for a very short period of time for their own selfish gain. This has real costs for the fund's long term investors in trading fees and potentially increased performance fees. It also damages individual investors trust in the NZ markets which hurts everyone.

NBR and an older Stuff article, report on his motivation, Milford's profit target and Warminger's own bonus were at risk:


It was clear from Milford’s employment records that Mr Warminger’s funds were underperforming their benchmark, said the judge.
“He undoubtedly would have felt pressure as a consequence.”

Read more: https://www.nbr.co.nz/article/warminger-manipulated-market-court-finds-th-198012


Furthermore, performance measures at the company were reviewed every six months, and Warminger's remuneration included a share of the company's total profit for the year.

"There will be evidence the bonus for Mr Warminger was very, very substantial indeed, by comparison to his base salary," Smith said.

http://www.stuff.co.nz/business/84645891/milford-asset-management-manager-was-under-pressure--fma

[Baa_Baa]

JAA's post should be cross-posted to ATM as well. Surely will be some very upset shareholders who were caught up in Mr Manipulations shenanigans!

[Lewylewylewy]

Could be more buy opportunities ahead as Trump focuses back on the tax again. Interesting his approach has changed. He's now ordering an investigation instead of making policy first.

[Joshuatree]

A buy from The Bull.
"Reporting in May, Fisher & Paykel’s competitive advantage lies in the respiratory and acute care market where it enjoys a dominant market share. Its obstructive sleep apnoea device business has strong growth prospects, but FPH is a smaller player in this highly competitive market dominated by the likes of ResMed. Recurring revenue from high margin (http://www.thebull.com.au/investment/a/176-margin.html) consumables accounts for 84 per cent of group revenue, which is a highly attractive aspect of this business."

[BlackPeter]

... and here we go: Golden Cross time! Given that markets see Trump more and more as a dog who barks a lot but has no teeth to bite (obviously - I am talking here about his ability to get anything trade or tax related through the house, not about his nuclear stick - but this is another thread) ... might it be a good time to reinvest.

I bought some parcel when FPH came back across the MA100 - and so far it looks like the indicators stay friendly ;)

[Zaphod]

Trump has now slapped a 20% tariff on Canadian lumber, accusing the Canadian government of providing tax-payer subsidies to lumber producers, which make the prices it sells for "unfair to the USA."

Dairy appears to be next on the hit list.

I wonder how long it will be until he decides upon tariffs on Mexican produced goods. This issue could be exacerbated by the $163M WTO ruling in favour of Mexico on their dispute with exports of Tuna into the USA.

[babymonster]

back to 10, yeah... is it something to do with Resmed's result? hope it can stay...

[Joshuatree]

... and here we go: Golden Cross time! Given that markets see Trump more and more as a dog who barks a lot but has no teeth to bite (obviously - I am talking here about his ability to get anything trade or tax related through the house, not about his nuclear stick - but this is another thread) ... might it be a good time to reinvest.

I bought some parcel when FPH came back across the MA100 - and so far it looks like the indicators stay friendly ;)

Canny indeed. S/P now $10.51 on increasing vol (getting toppy?), not far from an all time high($10.79) Why?
Not sure
Fall in $NZ ,Average of 1% higher than F&P assumed
Larger Flu season in USA
Improving political funding environs in USA (but still risks)
Rolling out new masks and flow generators etc
USA final litigation determination in USA jan 2018
Worst case scenario a ban on 2 masks which make up 10-15% rev in USA

4Traders av t/p $10.31
A broker where i got some of this info T/P $10.18 with meaningful tail risks remain

[hardt]

Canny indeed. S/P now $10.51 on increasing vol (getting toppy?), not far from an all time high($10.79) Why?
Not sure
Fall in $NZ ,Average of 1% higher than F&P assumed
Larger Flu season in USA
Improving political funding environs in USA (but still risks)
Rolling out new masks and flow generators etc
USA final litigation determination in USA jan 2018
Worst case scenario a ban on 2 masks which make up 10-15% rev in USA

4Traders av t/p $10.31
A broker where i got some of this info T/P $10.18 with meaningful tail risks remain

Resmed saw great amounts of growth in the market they share with FPH - many are expecting organic growth to bolster some good results for FPH as it did for RMD [ Resmed market share remained the same ]

With the FY results in sight, I would say there are some mighty high expectations.

[Joshuatree]

Yes RMD PE 29( i hold too) very similar chart and near a high. Prob tracking the S&P Healthcare 500 index like FPH PE 37 (ASB site) (PE 34 brokers est ).

[Joshuatree]

Was that you BP selling out today?. :scared:

[BlackPeter]

What do you mean - hardly any depth so far?

But no, don't see any reason to sell FPH at the moment. Do you?

[Joshuatree]

Well its getting fairly pricey don't you think?Im mean more than norm.
Meanwhile a new mask released for babies down to 500 gm in weight!
FPH Releases New Infant Cannula (https://nzx.com/companies/FPH/announcements/301075)

[BlackPeter]

Well its getting fairly pricey don't you think?Im mean more than norm.

Pricey? Yes. More than norm? Not so sure. If you compare them with the likes of SUM and MET, than yes, they look fundamentally quite pricey. On the other hand ... SUM and MET are cyclical, FPH is not. If you compare them with quasi-bonds like AIA, than they look given their growth still quite reasonable priced.

I guess FPH is one of these companies which always looked dear ... and I am still annoyed that I didn't buy them at $4 (not that long ago), because i felt they are a great company, but just a bit too dear.

I think they have the potential to just keep growing for many years to come (just look for how long they are already above the MA 100) - and might sell in another 3 years for $20. Who knows? Don't think that normal market cycles are likely to effect them too much, the recent dip is in my view just a combination of the IP litigation (and their still might be some residual risk) and the Trump factor.

Obviously - nobody knows whats around the next corner, but at this stage I see them as long term holding in my portfolio. Great company worth its premium.

[hogiela]

Pricey? Yes. More than norm? Not so sure. If you compare them with the likes of SUM and MET, than yes, they look fundamentally quite pricey. On the other hand ... SUM and MET are cyclical, FPH is not. If you compare them with quasi-bonds like AIA, than they look given their growth still quite reasonable priced.

I guess FPH is one of these companies which always looked dear ... and I am still annoyed that I didn't buy them at $4 (not that long ago), because i felt they are a great company, but just a bit too dear.

I think they have the potential to just keep growing for many years to come (just look for how long they are already above the MA 100) - and might sell in another 3 years for $20. Who knows? Don't think that normal market cycles are likely to effect them too much, the recent dip is in my view just a combination of the IP litigation (and their still might be some residual risk) and the Trump factor.

Obviously - nobody knows whats around the next corner, but at this stage I see them as long term holding in my portfolio. Great company worth its premium.


I almost typed up a very similar reply earlier ... but I actually managed to get the bulk of my FPH at around the $4 mark :) I too will be holding and won't consider selling until $15-$20 ...
The growth: A new manufacturing facility in Mexico, earthworks started on a new building in Auckland, a huge untapped market ... I think the future is definitely bright despite some on-going "headwinds" ...

[Joshuatree]

Cheers guys. Ive been holding since $3.02 and sold a few too. RMD bought @ $6.65 average. Always priced for perfection and as long as they continue with the growth expected of them both will do well , There are a few opportunities to trade them too.The brokers consensus pricing below current s/p is int. Watching more these days rather than taking them for granted.And simply and sadly as the % of overweight people increase the more masks ,flow generators , consumables etc are sold.

[hardt]

Cheers guys. Ive been holding since $3.02 and sold a few too. RMD bought @ $6.65 average. Always priced for perfection and as long as they continue with the growth expected of them both will do well , There are a few opportunities to trade them too.The brokers consensus pricing below current s/p is int. Watching more these days rather than taking them for granted.And simply and sadly as the % of overweight people increase the more masks ,flow generators , consumables etc are sold.

Good point about the obesity epidemic...

RBD to keep them fat
FPH to keep them breathing
RBD to keep them fat
FPH to keep them breathing
RBD to keep them fat
FPH to keep them breathing
RBD to keep them fat
FPH to keep them breathing

[Joshuatree]

Hahaa a vicious /virtuous circle, Monopoly Consumption Game . Add MEB to assess any depression, AIR to fly them there,OCA to look after them SEQ to manage their wealth,HBL to bank it, TNR to buy them a car, and ZEL to fuel it and AWF to find that job.

BP are you topping up or is this your first entry or are you just in for a trade based on the charting?

[Lewylewylewy]

....Boom....

[mondograss]

....Boom....

Word y'all

[Joshuatree]

Withdrawal of US ITC Complaint Against FPH (https://nzx.com/companies/FPH/announcements/301280) Great; was watching the chart as FPH was going steadily down as RMD was going up. Reversal today welcome.

[babymonster]

asx open should fuel the sp raising further...

[hardt]

One big take away from the announcement today... ResMed are *STILL* w4nkers

ResMed also indicated in today’s filing that it intends to file an additional ITC complaint.

The withdrawal of the complaint with the US ITC does not impact the patent litigation proceedings involving Fisher & Paykel Healthcare and ResMed in the US District Court, Germany, the UK and New Zealand.

[Zaphod]

ResMed obviously believe they still have legitimate grounds to challenge FPH, given the patent litigation is still proceeding. That's still a valid concern for shareholders.

[Lewylewylewy]

ResMed obviously believe they still have legitimate grounds to challenge FPH, given the patent litigation is still proceeding. That's still a valid concern for shareholders.

It's a concern, but also worth remembering that this is the culture / style. "What? you're suing ME? I'm suing YOU?!" It's just how they do.

[percy]

It's a concern, but also worth remembering that this is the culture / style. "What? you're suing ME? I'm suing YOU?!" It's just how they do.

Expensive sport.

[RupertBear]

Withdrawal of US ITC Complaint Against FPH (https://nzx.com/companies/FPH/announcements/301280) Great; was watching the chart as FPH was going steadily down as RMD was going up. Reversal today welcome.

Been a bit of a roller coaster ride today! Up then down then up again....;)

[Blackrose]

Anyone on here good at understanding Patent law? Would Res Med's withdrawal of this suit mean that they could not refile using the same evidence or brief? Is FPH out of the woods yet?

[Joshuatree]

[QUOTE=RupertBear;666458]Been a bit of a roller coaster ride today! Up then down then up again....;)

Sure was ,bounced as high as $10.49 finished @ $10.18. I didn't have enough conviction (or nimbleness) but was thinking it may have been good to sell into this as i have a sneaky feeling that the downwards direction may resume, i don't know why and hope I'm wrong.

[hardt]

Anyone on here good at understanding Patent law? Would Res Med's withdrawal of this suit mean that they could not refile using the same evidence or brief? Is FPH out of the woods yet?

FPH is not out of the woods, the litigation could be endless...

FPH never should have swung at the big boys, RMD could play this game for years to come... I am far from an expert on patent law, however patent trolling is as easy as A.B.C in the U.S.A

FPH is a solid business with a bright future ahead... use the short term uncertainty to your advantage.

[Joshuatree]

Is that what you are doing hardt; topping up.

[hardt]

Is that what you are doing hardt; topping up.

Not just yet, think it may be heading down below 10... hoping to pick up a few more before the FY results.

Not one to sell shares in a good company whichever way it goes.

[BlackPeter]

...
BP are you topping up or is this your first entry or are you just in for a trade based on the charting?

Sorry, missed that (happens when you are holidaying on a tropical island ... just too many distractions through heat, beer, swimming pool and good food;);

FPH was for ages on my watchlist. Always looked like a good company but always too dear. I first bought in when the SP flirted with the MA200 - but set a stop which got me out again with a minor loss. Bought back when the uptrend started again (passing the MA100). I do see them as long term hold (well, this is the intention), but this does not mean that I will ignore the SP movements and the economic and political environment.

Might buy some more if it moves below $10 (but stays above or around MA100).