What are your favourite 3 NZX Stocks and Why?

[ENP]

Title says it all.

What are your top 3 NZX stocks. Please dicuss why you like them, if you currently hold them and a bit of info as to how you approach investing in themm.

[ENP]

I'll start...

RYM- Ryman Healthcare

I like this company because it has the shareholders interests at heart. It is growing at a steady rate around 10-15% per year. It is in an industry that is in high demand and the predictions of this growing are very promising. It also returns 14-16% on equity. The management has holdings and is increasing holdings in the company. It is expanding into Australia. I bought 6k of shares in 2010 and then sold them weeks afterwards for fear of sharemarket collapse (what was I thinking?) and now hold roughly 4k worth of shares, bought about 7 months ago.

SKT- Sky Television

I like this company and it's monopoly status. It's been a solid performer over the past decade, growing its revenues and profits. It also has a very strong foothold in NZ households and does quite well in recessionary times. It's return on equity isn't as good as I'd like, only being around 7-8% I also uneasy about the amount of money the need to upkeep and upgrade their technology. I don't hold any of the company and would only if they become very cheap.

POT- Port of Tauranga

The biggest and best port in NZ. I work in the shipping, import/export industry and Tauranga seems so more efficient and just gets on with the job compared to the other ports. The large volume going through the place is also an advantage. It's a sure and steady grower and is likely to continue. Once again return or equity isn't as high as I'd like, only being 6-7%. I don't hold any as the P/E always seems to be astronomical compared to other NZX stocks.

So there is my 3. Next please!

[troyvdh]

....I know why you ask the question....investing is a strange game.....short term....long term....if we all thought the same way ...there would not be a market....thats why we have sharetrader.....for example I hate SKY...and love Ryman....I love CEN...and PFI....I am comfortable holding same....rational/irrational....and ive been investing for 30 years plus....in a perfect world we would all pick "winners" and "performers".....either for the div,potential of div or SP gain...because "the MKT hasnt waken to this little beauty"....The market will recover....folk who got burnt in the mid 80's will forget....the bloke over the fence bought this.....a mate at work told me this.....

...thankyou for asking the question......cheers troy

[elZorro]

I like FPA, because when it collapsed a couple of years back I couldn't believe it would disappear, and bought in when it was on its knees. Made a few thou gain, which for me is highly unusual.

I also like OGC once it gets into a good run, and it might be doing that now. My timing on this one has been very poor, TA knowlege required.

I don't buy shares for dividends, I'm looking for capital gain. GEL is the share I've invested most research into, because I can see a good expected return. After being wrong for several years, I'll be only mildly surprised if it does what I expect it to, before I need to invest more carefully. :)

[garfy]

A novice of 6 months, and have enjoyed very much the various threads and opinions, all of which have helped me make decisions, for better or worse. My favourite 3 NZX stocks, chosen in ignorance, and under the influence of ShareTrader Forum...

1. FPA - chosen for sentimental nationalistic reasons, and it seemed a rather cheap entry in Feby 2012. The F&P appliances we have purchased over the years have performed with distinction. An innovative company, and to my laymans opinion a very well managed company.

2. SUM - Chosen because it seemed to me to be a growth industry, and the entry price was more affordable than RYM. A good stable field to invest in for a start.

3. HNZ - Under the influence of Sharetrader Forum, as well as being very nationalistic, the prospect of being able to become a shareholder in a NZ owned company that may become a fully fledged bank became an irresistable choice, and also a good entry price.

I have invested with Capital Gain, rather than Dividends, in mind, and these companies have (so far) exceeded my expectations. I really enjoy this Forum. Thanks oto all who contribute.

Cheers, Garfy

[Halebop]

Long Term (10+ Years): Michael Hill; 30 year growth pedigree, simple strategy of opening new stores, high return on capital, cash-flow from new PCP business is impressive, share price is moderate, good balance of investing for growth and sharing profits via dividends

Medium Term (3-5 Years): Diligent; Operating leverage improving rapidly on the back of rapid sales growth, number 1 globally, very strong cash flow, high return on tangible assets, fraction of addressable market tapped

Short Term (1-2 Years): Abano; Not very profitable due to heavy investment in dental consolidation strategy and expansion of Bay International however showing signs of technical break out after multi year down trend. Would shift them to a longer category if all the activity more clearly translated to earnings

[CJ]

This is at the moment:

Ryman: great growth model and will keep growing year on year with steady cashflows and a great business model. Have considered buying Somerset to diversify individual stock risk while maintaining sector investment as the retirement industry is booming but that doesn't mean an individual company wont falter along the way in the short term (same reason I have hold CEN & TPW and Xero & DIL).

Resturant Brands: Great dividend stock and is showing great capital growth at the moment as the economy improves. Will keep an eye on as didn't expect this much growth in the short term (only bought a few months ago. I considered Briscoes and Hallensteins when I bought and they all seemed similar. Bought RBD as it does just as well in a recession.

Diligent/Xero: Great growth stocks but very high risk. Need to keep an eye out for a stong competitor with a strong product (Xero currenlty has lots of strong competitors with crap products).

Having said that, the base of my portfolio is steady infrastructure stocks: IFT, TPW, CEN, AIA. I consider these my anchors (hold me back but provide stability in falling markets since I am a buy and hold investor) so I can look to higher risk shares to top up the gains and have some fun. I only invest in NZX stocks as I dont have the time to research further afield.

[Jay]

MHI - As Halebop says has been growing for years - seem to know what they are doing
DIL - A growth company with plenty of potential - have a head start I think - relatively recent acquisition
RYM - growing industry - steady gains in capital growth and regular dividend

These make up the bulk of the long term portfolio

[modandm]

Great thread! Here are mine.

AIR - Poorly understood, and highly volatile. Potential for very large profit swings. My personal research leads me to above concensus earnings estimates for FY13. Meanwhile even concensus earnings estimates see 30-40% upside. Not a long term industry to invest in, but I believe one of the few value stocks on the NZX that could return 50%+ over next 12 months. More info in the AIR thread - which I seem to be the only contributor too - as I say overlooked and out of favour.

IFTHA - not a stock but a perpetual bond. Yields over 7.5% and will go up in value when interest rates rise (eventually)... Not rated but IFT is reasonably low risk (IMHO) not very liquid.

I struggle to find any other good opportunites on the NZX that offer short term high gains - so for a long term stock

SKC: Very very high quality asset in AKL, long term grower at c.5% pa trades on 14-15x so not cheap but deserves rating. A good yield. Better than AIA which trades on a higher multiple and is a similar monopoly. Also potential gain with conference centre though not central to investment case.

[CJ]

AIR - Poorly understood, and highly volatile. Potential for very large profit swings. My personal research leads me to above concensus earnings estimates for FY13. Meanwhile even concensus earnings estimates see 30-40% upside. Not a long term industry to invest in, but I believe one of the few value stocks on the NZX that could return 50%+ over next 12 months. More info in the AIR thread - which I seem to be the only contributor too - as I say overlooked and out of favour.I read your post but just dont comment. Am a long term holder and am waiting for a good exit point as have decided the industry really is a dog. However, like you, I think this share has room to grow in the short term but not a suitable entry for this list.

[Blendy]

More info in the AIR thread - which I seem to be the only contributor too - as I say overlooked and out of favour.


Just so you don't feel unloved, I look forward to reading your regular updates on AIR! I really appreciate the time and effort you put in. I also personally like this one and have held it for several years (sometimes buying in and out).

[percy]

I read your post but just dont comment. Am a long term holder and am waiting for a good exit point as have decided the industry really is a dog. However, like you, I think this share has room to grow in the short term but not a suitable entry for this list.

Very much sums up how I feel.
I do appriciate your well researched posts on AIR thread Modandm.

[CJ]

FPH have great products and great branding and if their markets crash they will be first in line to recieve goverment subsidies for being an innovative exporter (to good to lose)Agree with this - Long term should be good but our dollar is too high. If/when the dollar drops, this one will take off. Until then, I am on the sidelines.

[Toasty]

Me now, me now.

XRO As mentioned before very high risk. I bought these on the reputation of the founder and I bought quite a few. According to the documentation I am in the top 25%. Probably not the smartest way to invest but I have become a lot more familiar with the product and the strategy. I do have great hopes but I am not totally blinded to the risks. Pretty happy so far though. 500% return has skewed my portfolio. I have a $10 price in mind for these but thats not really based on anything tangible. I am sure the power of my wishful thinking will carry it upwards.

VHP Bought a small holding over 5 years ago at 89 cents. I am a property person at heart so I like the idea of exposure to a niche market away from standard residential or commercial. Apart from the recent management rights debacle I have been very pleased with the consistent dividend and the fact that I am sitting on a reasonable gain over the timeframe I have owned them. I always look forward to the annual report so I can browse through the nice hospitals that I own.

IBM Hold quite a large block of these acquired at about $80US and they are sitting just below $200US currently. Most of the research I have read indicates that this should double over a ten year timeframe. Just impressed with the ability of the company to continually reinvent itself. I sold quite a few as the GFC hit thinking that it would be good to hold a bit more cash than usual but the share price seemed unfazed and continued merrily upwards much to my horror. Lesson here is to trust in the fundamental strength of a company rather than panic at unforseen events.

(oops sorry. Obviously not an NZX stock. I read like I invest...quickly and without thought for the consequences...)

In addition I would like to have grabbed some TUA at $1.45 after reading the thread on here but missed the boat.

[RRR]

My 3 long term buy and hold stocks would be

AIA - infrastructure/monopoly, a very boring stock to own
Ryman - growth stock, still not very expensive
VHP or ARG - property exposure and decent yield

[ratkin]

Long term

Ebos
Ryman/sum
Auckland airport

Demographics are the key. More elderly , more healthcare , more population , more pets. and eventually the airport will gain a rail link

[craic]

1 TEL - because it keeps me in the style to which
i am accustomed
2 TEL - Because it is a well run business.
3 TEL because it brings out the Reds fromunder The Beds and irritates the hell out of those who live by the Vodaphone.

[janner]

You bog Irish prick.. Hahaha..

Agree with all your sentiments..

[iceman]

Great idea ENP and very interesting responses. Mine are:
1) RBD, great reliable dividends and stock almost immune from economic cycles

2) RYM, as already explained by other posters, a well managed growing company with exposure to healtcare/retirement and property. 2 industries I like exposure to.

3) DIL, a great NZ tech company with huge growth potential

As an aside, would like to second CJ's, Blendy's and percy's comments to modandm. Keep it up please

[ENP]

A lot of peoples responses are:

Reliable, consistent, dividend paying, etc.

Is that all we can expect from the NZX?

[PlatnuM195]

RYM - Great stable growth over the past year and the consistent dividend.

DIL - Massive growth potential and leader in its field. This could be one to keep an eye on if you aren't already. I'd say it's one of the more interesting stocks on the NZX.

[BIRMANBOY]

Looking for excitement? You could try the Belarus stock exchange. They have a growth stock there which is proving a big hit. The runner at the moment is Ostapukchucks-em-far.co.be. (WHPS) Into advanced (and retro) steroid manufacturing. Had a very big surge recently and just experienced a big drop so would be great time to buy in. Failing that the ASX has hundreds of mining stocks which will keep you up at night buzzing with adrenalin surges. If you want to try staying with the NZX I'm sure there will be dozens of edgy non performers that others can reccommend for your entertainment.
A lot of peoples responses are:

Reliable, consistent, dividend paying, etc.

Is that all we can expect from the NZX?

[Sauce]

Lol birmanboy
Funny post, and even better point
sauce

[Snoopy]

A lot of peoples responses are:

Reliable, consistent, dividend paying, etc.

Is that all we can expect from the NZX?


Ok here is something a little more exciting. NZ Farming Systems Uruguay. The grand plan to build NZ style dairy farms in Uruguay. Currently trades at around a 20% discount to asset backing. Operationally the results are very encouraging. The problem is the company has high debt levels (equity ratio 50%) so almost all profits are going to the interest bearing bondholders. It is currently cashflow negative although will turn a profit this year due to land and cow revaluations.

However main shareholder Olam has agreed to put up more capital so the future of the future of the business is assured. Olam have also said they expect to fully own NZS within five years. I.E. a takeover offer is virtually certain. So this is a medium term bridge the value gap opportunity.

There is an opportunity to get in at half brokerage. Olam has signalled a 1:1 cash issue so buy half the shares you want and wait for the cash issue offer to pick up the rest brokerage free. The ultimate sale should be brokerage free too. Not the best NZX company but this is the best investment I can see on the NZX at the moment from a value perspective. Downside from here I estimate as minimal.

SNOOPY

[Stranger_Danger]

It saddens me to say it, but I struggle to compile a list of my three favourite NZX stocks! How tragic is that?

I currently have too many ASX holdings (and an even bigger watchlist) and I see good opportunities elsewhere. But man, our stock exchange paints a sorry picture.

The closest I can come is, and yes I hold all three

(a) I agree with a previous poster than IFTHA is an interesting opportunity. Many people have risks they may not even be aware of when interest rates start rising (I know a 20 year old girl who works at Macca's but plans to now get knocked up who was given a deposit by her beneficary mother who just got a mortgage which only makes sense if rates stay low, if it makes sense at all) and IFTHA is an interesting way to play the other side of this risk.

(b) Briscoes - BGR. Exceptionally well run retailer and one of our few shining lights. Was a steal during the GFC, would not commit new money at todays price.

(c) Allied Workforce - AWF. Another steal from a few years ago, but only in hindsight - they've done better than many (including me) would have expected. Wouldn't commit new funds at todays price.

So yeah, I find very little to actually buy today on the NZX.

[ENP]

I currently have too many ASX holdings (and an even bigger watchlist) and I see good opportunities elsewhere. But man, our stock exchange paints a sorry picture.


I'm in the same boat, my watch list on the NZX has one stock, where as my watch list on the ASX has 6 stocks.

[percy]

I'm in the same boat, my watch list on the NZX has one stock, where as my watch list on the ASX has 6 stocks.

Yet there have been some great performers in NZ this year;
ZIN, 200.05%
DIL 92.31%
ATM 87.50%
FPA 85.33%
PHB 66.41%
TUA 38.15%
HBY 35.67%
AWF 29.54%
And looking at heavy weights;
TEL 30.70%
RYM 30.12%
EBO 22.17 %

[Balance]

I'm in the same boat, my watch list on the NZX has one stock, where as my watch list on the ASX has 6 stocks.

And you have missed some spectacular gains in the NZ market.

Warren Buffett " Be afraid when others are brave and be brave when others are fearful."

[BIRMANBOY]

Thats probably because your attention span seems to be in the 2-4 millisecond range.
I'm in the same boat, my watch list on the NZX has one stock, where as my watch list on the ASX has 6 stocks.

[Aaron]

Ok here is something a little more exciting. NZ Farming Systems Uruguay. The grand plan to build NZ style dairy farms in Uruguay. Currently trades at around a 20% discount to asset backing. Operationally the results are very encouraging. The problem is the company has high debt levels (equity ratio 50%) so almost all profits are going to the interest bearing bondholders. It is currently cashflow negative although will turn a profit this year due to land and cow revaluations.

However main shareholder Olam has agreed to put up more capital so the future of the future of the business is assured. Olam have also said they expect to fully own NZS within five years. I.E. a takeover offer is virtually certain. So this is a medium term bridge the value gap opportunity.

There is an opportunity to get in at half brokerage. Olam has signalled a 1:1 cash issue so buy half the shares you want and wait for the cash issue offer to pick up the rest brokerage free. The ultimate sale should be brokerage free too. Not the best NZX company but this is the best investment I can see on the NZX at the moment from a value perspective. Downside from here I estimate as minimal.

SNOOPY

If Olam has a loan it is not claiming all its interest on couldn't they just keep upping the interest claimed on the loan to ensure other shareholders get nothing. No rush to take over the remaining shares if this is the case?
Appreciate the suggestion though thanks.

[ENP]

Yet there have been some great performers in NZ this year;
ZIN, 200.05%
DIL 92.31%
ATM 87.50%
FPA 85.33%
PHB 66.41%
TUA 38.15%
HBY 35.67%
AWF 29.54%
And looking at heavy weights;
TEL 30.70%
RYM 30.12%
EBO 22.17 %

Bar one, perhaps two of these aren't the type of business I'd like to own. I invest in companies, not ticker symbols bouncing around on a screen.

Out of the above, hardly any of them are consistently growing revenue, earnings, profits and dividends in a manner that I can predictably pick where they will be in 5-10 years time. Most of their revenues are up one year, down the next, big profits one year then a sudden loss the next. I'd rather buy something and hold it for a long time and sit on my hands knowing I've made one good decision than buying into sub par "undervalued" stocks, then once they reach a higher value, sell them.

Take Fisher & Paykel as you said above. It's making only 1/3 of the profit it was making 8-9 years ago. That's not an improving business for the long term! It's going backwards. So has it's share price, it was about $3 now it's under $1. Who cares if it has gone up 85% this year? You have already lost 2/3 of your capital.

I fail to understand your logic sorry.

[Stranger_Danger]

I'm in the same boat, my watch list on the NZX has one stock, where as my watch list on the ASX has 6 stocks.

I disagree with the person who infers from this that you have a short attention span.

You are actually following a higher percentage of NZX stocks than you are ASX stocks.

That would be the problem, right there.

[Balance]

Bar one, perhaps two of these aren't the type of business I'd like to own. I invest in companies, not ticker symbols bouncing around on a screen.

Out of the above, hardly any of them are consistently growing revenue, earnings, profits and dividends in a manner that I can predictably pick where they will be in 5-10 years time. Most of their revenues are up one year, down the next, big profits one year then a sudden loss the next. I'd rather buy something and hold it for a long time and sit on my hands knowing I've made one good decision than buying into sub par "undervalued" stocks, then once they reach a higher value, sell them.

Take Fisher & Paykel as you said above. It's making only 1/3 of the profit it was making 8-9 years ago. That's not an improving business for the long term! It's going backwards. So has it's share price, it was about $3 now it's under $1. Who cares if it has gone up 85% this year? You have already lost 2/3 of your capital.

I fail to understand your logic sorry.

The biggest gains are made from :

1. Playing the cycle,
2. Great companies,
3. Turnaround stories.

Australia is excellent for 1 and the US excellent for 2. NZ has always been excellent for 3.

[macduffy]

I take your point, ENP, but It seems to be getting harder and harder to "predictably pick" where companies will be in 5-10 years time. Events move too quickly for that, these days.

I think the logic behind investing in FPA, as your example, lies in being prepared to buy them in the depths of despair and then have the foresight/skill/luck to get the 85% appreciation. Like you, I don't particularly rate them as an investment these days. The salad days of good products meeting an expanding market with little competition are long over and it will be a hard slog to make reasonable profits in future, IMO.

For what it's worth, my three picks are EBO, RYM and ANZ, the first two for the reasons already given - good management, expanding markets, solid financials. ANZ - really an Australian company but listed and operating in NZ - for consistent profitability and its regional growth strategy. But I don't regard any of them as suitable for the bottom drawer for 5-10 years without regular review.

[RRR]

ENP could start a new thread about 5 long term bets in ASX or global companies.

[BIRMANBOY]

Dont encourage him..please.
ENP could start a new thread about 5 long term bets in ASX or global companies.

[ENP]

Dont encourage him..please.

Why not?

We are all here to learn.

5 stocks I'd choose to hold for the next 10 years if I had to buy and could not make any decisions to change until 2022 would be:

RYM- Ryman Healthcare on the NZX

RHC- Ramsay Healthcare on the ASX

CL- Colgate Palmolive on the NYSE
NKE- Nike on the NYSE
KO- Coca Cola on the NYSE

My theory is I'd rather buy into a good business and hold it and not worry too much about it, I make one decision and is a one thought process. However, you all above invest in companies with a two thought process. By this I mean, you buy in and you immediately think of a price, time or future event where you are looking to sell, hoping the price of the stock goes up so you can make a profit. This is incredibly hard to do!

Why over complicate things?

"Thats probably because your attention span seems to be in the 2-4 millisecond range." - yet I'm talking long term investments are you are talking about rebounding cyclic stocks trying to make a quick buck? Please elaborte?

[Sauce]

Nice selection ENP
Id be highly suprised if you didn't beat the market holding those for the long term.
Regards,
Sauce

[Sauce]

If you really wanted to sit on your ass but still beat the market you could just buy BRK-B in the US and arguably get less exciting but very safe long term gains rather than owning the three consumer products stocks in the US.

Better than any index fund but a lot less work and hassle than following the prospects of three global consumer businesses - plus you get exposure to the US recovery and emerging markets through Berkshires own KO and other global consumer plays.

Regards,

Sauce

[percy]

[QUOTE=Stranger_Danger;379867]

(c) Allied Workforce - AWF. Another steal from a few years ago, but only in hindsight - they've done better than many (including me) would have expected. Wouldn't commit new funds at todays price.

The buying opportunity to buy into AWF was the announcement of Mike Huddleston as CEO.I read his CV,and thought this will be fun.And it has been fun.With him still there,compamy carrying little/or no debt the future looks exciting.

[percy]

Bar one, perhaps two of these aren't the type of business I'd like to own. I invest in companies, not ticker symbols bouncing around on a screen.

Out of the above, hardly any of them are consistently growing revenue, earnings, profits and dividends in a manner that I can predictably pick where they will be in 5-10 years time. Most of their revenues are up one year, down the next, big profits one year then a sudden loss the next. I'd rather buy something and hold it for a long time and sit on my hands knowing I've made one good decision than buying into sub par "undervalued" stocks, then once they reach a higher value, sell them.

Take Fisher & Paykel as you said above. It's making only 1/3 of the profit it was making 8-9 years ago. That's not an improving business for the long term! It's going backwards. So has it's share price, it was about $3 now it's under $1. Who cares if it has gone up 85% this year? You have already lost 2/3 of your capital.

I fail to understand your logic sorry.

I said nothing about F&P.
Logic. ZIN,PHB,TUA,and AWF are very well run businesses.All had/have very strong balance sheets,good management.,and have out performed the market,as small companies often do.

[macduffy]

My theory is I'd rather buy into a good business and hold it and not worry too much about it, I make one decision and is a one thought process. However, you all above invest in companies with a two thought process. By this I mean, you buy in and you immediately think of a price, time or future event where you are looking to sell, hoping the price of the stock goes up so you can make a profit. This is incredibly hard to do!


Probably getting off track a bit here but ENP's assumption above isn't correct, at least as far as I'm concerned. Rather than immediately looking to sell, the review process is rather to determine whether or not the original Buy decision remains valid. A big difference!

[Silverlight]

I am impressed anyone can pick just 3.

From my holdings the 3 I am most comfortable with:

TeamTalk, well managed and a good dividend.
Pumpkin Patch, a turnaround story that I understand, recent prospects with a massive increase in wholesale and online make for positive medium term.
Methven, well managed, slightly effected by construction downturn, but great innovative product set and a healthy dividend.

3 additional higher risk stocks, fletchers, once the rebuild is in full swing, the stock will be rerated higher, Cavalier, higher risk, but still the leading brand in carpets, and Rakon, very high risk, however if there fortunes change, they will easily double from here, and they are so hated at the moment.

[CJ]

I'll start...

RYM- Ryman Healthcare
SKT- Sky Television
POT- Port of Tauranga


A lot of peoples responses are:

Reliable, consistent, dividend paying, etc. Isn't that what you asked for. Good quality shares for the base of a long term portfolio.

Sure I would have loved to had 100% in DIL over the past couple of years but that isnt how you build a long term portfolio - maybe ok if you are trading (??).

Maybe what you are asking for is what shares do you expect to double year on year and what is the risk of that not happening. If that is the case, you dont have a 5-10y time frame - you have a 1y+ timeframe where you have to constantly look for the right exit point. In which case, FPA might have been the right decision a year or so ago but not now. FPH might be a go-er if the exchange rate starts to drop, DIL/XRO if they keep hitting growth targets but what for big drop if they dont, TEL if it gets good UFB customers or its mobile customer numbers turn around, even NZ farming for the reasons noted but watch out for Olam trying to take over at the bottom, not the top.

But I wouldn't put 100% into one of these, maybe put 10-20% into these type of stocks to supplement the other constant ones.

[Silverlight]

Not at all keen on your three higher risk stocks. I personally doubt FBU will bounce back to lofty levels for at least a year or two. The rebuild is going to be much slower than expected for the type of construction FBU can do best (big buildings, convention centres etc). They might start in the next year or so, but earnings won't be evident for another year after that. It is the medium sized building firm that appears to be doing the most business in Chch, from what I see of my last trip to Chch three months back. On top of that, they are not really doing well enough in other parts of their business for me to be excited.

Hi Sparky, I think builders is slightly higher risk, but the upside is quantifiable, at the moment there is no earnings visibility on Christchurch, the Australian market is slowing, and the NZ market is at cyclical lows, these are the headline facts. If we fast forward two years, and say the NZ market has moved off its lows, not bull times, just improved from today, the rebuild is gathering momentum and we have an earnings result with this included, visibility improves, and the price is already back at $8. These are medium term tail winds, which are known, there maybe other upside surprises, like a stronger rebound in the US with formica, but these would be nice to haves and not essential.


I don't know enough about Cavalier to comment, but Rakon is something I believe is going to struggle for some time. There are a number of reasons why I am pleased to not own that stock, including the need for a board overhaul, that RAK are price takers not price makers, they've been very unreliable on currency management, and that they have a history of disappointing on earnings, and relying on superfluous issues to demonstrate company success rather than metrics like revenue and profit. In my opinion, they are cheap, but for a reason.

Cavalier are in a similar boat to Fletcher, except they are reliant on favourable wool prices, I don't hold them, but I like the story of a potential turnaround. Rakon I don't hold either, but while they have been poorly managed, they have specialist expertise in crystals, which seems to have being recognised through a tremendous amount of awards. I like them because they are so out of favour and all views on them are so bearish. Poor management is one reason why I have not taken a position yet, and that is the same reason I never bought into Appliances, but as you well know that did not stop the price almost doubling.

FPA almost when bankrupt as they did not manage their risk however the same directors who presided over their risk management committee then, and managed it so poorly, still remain on the board today. So while the current management at Rakon have not been ideal, and the company might not go back to being the darling is was in 2007, it could easily move back over a $1 a share, for the higher risk investor, for a pretty nice return.

As an aside it is quite interesting reading Rakon thread's 2007-2008 posts, very similar parallels to the Xero thread today.

[ENP]

For reasons already well canvassed, my favourites are:-

RYM
SUM
MHI

For me, due to the shifting demographic in NZ, retirement villages during the establishment and building phase of the business is a great space to invest in. And furthermore it's not either/or when it comes to investing in Ryman and Summerset for me, it's both. I like to invest in a great space first, and then I search for the best businesses that operate in that space to invest in.
MHI is a great business run by a guy with a proven and consistent track record of success over many years in that industry. What's not to like?

Do you have any holdings on the ASX David B ?

[ENP]

A few but not very many. I've owned ANZ shares for many years, having first brought some in the early 80s. I don't follow OZ very closely. I've only ever been there once, and that was in 1976. I prefer stocks in the US and Europe.

What US and EU shares are they?

Sorry to be nosy.

[Joshuatree]

2012

If you really wanted to sit on your ass but still beat the market you could just buy BRK-B in the US and arguably get less exciting but very safe long term gains rather than owning the three consumer products stocks in the US.

Better than any index fund but a lot less work and hassle than following the prospects of three global consumer businesses - plus you get exposure to the US recovery and emerging markets through Berkshires own KO and other global consumer plays.



Regards,

Sauce

Must see if BRK-B is still on the boards. RYM looks to be the most popular stock on this forgotten thread. Shall we update our 3 best ideas folks?:) ps hope you're still around and reading these threads sauce.

[Investor]

I invest in companies, not ticker symbols bouncing around on a screen.

A refreshing approach on this forum.

[LAC]

SUM
RYM
EBO

Has been slow and steady with these ones. Happy holder for the past few years. I would say this year I am liking TRA, THL and HLG so far but will eventually add the the old three mentioned above.

[Lawstudent05]

OCA - Held since IPO listing.

MFT - Held for around 2 years, great company. I work in the Supply Chain industry and have worked with them in the past. Great company, great results. Check out the price today, an all-time high today after recent announcements.

POT - Steady growth, good board. 2 years holding.

As someone earlier said, invest in companies, not ticker symbols. These companies are all ones I wish to hold up to I retire as I believe they will be around in another 40 or so years.

[Jonboyz]

I am impressed anyone can pick just 3.

From my holdings the 3 I am most comfortable with:

TeamTalk, well managed and a good dividend.
Pumpkin Patch, a turnaround story that I understand, recent prospects with a massive increase in wholesale and online make for positive medium term.
Methven, well managed, slightly effected by construction downturn, but great innovative product set and a healthy dividend.

3 additional higher risk stocks, fletchers, once the rebuild is in full swing, the stock will be rerated higher, Cavalier, higher risk, but still the leading brand in carpets, and Rakon, very high risk, however if there fortunes change, they will easily double from here, and they are so hated at the moment.


Wow, just wow... from 2012

[BeeBop]

Wow, just wow... from 2012

Interesting take on Pumpkin Patch because at that time I was deciding between FPA and Pumpkin. The numbers showed a similar story BUT I had seen the Pumpkin store expansion overseas at it appeared dreadful, poorly set up, poor sales assistants, just expanded in the cheap way using not engaged cheap labour to sell the goods. Needless to say, I chose FPA for 37 cps and I think they were bought out for something over 125 cps a year later?

Hmmm, an index fund tracking the NZX is probably the easiest for NZ unless you always get it right.

[macduffy]

Don't need to always get it right if one holds multi-baggers like EBO, SUM and RYM, eh, David B?

They're my favourites, too.

[Sgt Pepper]

Don't need to always get it right if one holds multi-baggers like EBO, SUM and RYM, eh, David B?

They're my favourites, too.

One area of concern with Ryman, which may equally apply to all care of elderly providers. There seems to be a an excessive reliance in their facilities on Nursing and HCA staff who are in NZ on 2 year work visas. Any industry which engages in this runs the risk of
1. Changes in government policy concerning non resident workers
2 Labour competition from other countries which are in a similar position.

The era of a plentiful supply of an inexpensive labour is coming rapidly to an end. Labour intensive industries, especially healthcare will be exposed to the full impact of this.

Make the the most of the good dividends, I am not sure how sustainable they are.

[Ggcc]

One area of concern with Ryman, which may equally apply to all care of elderly providers. There seems to be a an excessive reliance in their facilities on Nursing and HCA staff who are in NZ on 2 year work visas. Any industry which engages in this runs the risk of
1. Changes in government policy concerning non resident workers
2 Labour competition from other countries which are in a similar position.

The era of a plentiful supply of an inexpensive labour is coming rapidly to an end. Labour intensive industries, especially healthcare will be exposed to the full impact of this.

Make the the most of the good dividends, I am not sure how sustainable they are.
The government also understand we rely on overseas people to fill the gaps the locals can’t or won’t do. All of the local caregivers within Ryman I have spoken to confirm that if they had to rely on locals, the quality of caregivers would be less. They hire overseas people because of their culture to nurture and care. A Hawkes bay kiwi caregiver told me, “most of the New Zealand caregivers only seem to complain about the money and forget why they became caregivers”.

Anyway the three long term companies for me would have to be SUM, ATM and lastly OCA which is in its early days, so maybe too early to see for that one. Oh and maybe Synlait needs to be noted in this one as well.

[couta1]

My favourite 3 NZX stocks are whatever 3 happen to be in my portfolio at any given time, trouble is I have 4 in my portfolio currently.

[Biscuit]

DGL (well executed, long-term growth strategy); MFT (focussed on improvement and growth); FPH (they have made me so much money, and they are an ongoing NZ tech success story)

[Brain]

Favourite stocks from the point of view of being the most interesting and having the possibility of flying high or crashing and burning NTL. QEX. PLX.