Don't always believe broker websites
Belgy mon,
"DB has their yield at just 3.6% and there PE ratio at 40".
FPH disclosed back in Nov that they will likely post NPAT of around $60m for the y/e 31 March 2009 if the NZD/USD stays at 55c. If they achieve this, it will equate to a pe of about 29x ($3.50/($60m/509.5m shares)). So I'm not sure where Direct Broking get 40x from.
The 3.6% yield is a net yield not gross too, and it is based on the current f/y not the next 12 months. 3.6% = 12.4c divi likely to be paid for y/e 31/03/2009 / $3.50. Grossed up is 5.1%.
The FY10 figures obviously look a lot more attractive given they have been hedging in the low 50c range compared to a likely 70c avg for FY09.
Questions..Questions..lifes full of Questions
Is this FPH share price weakness caused by investors changing from a defensive to an offensive strategy to quickly cash in (and cash out?) on the market re-rating of other high quality stocks that have been unfairly ravaged by the bear this past year?
....or has the share price technically reached its limits for now?
....or some other fundamental cause? (currency play?)
If it is a shift in Investor behaviour, will this recent FPH share price weakness happen to other bear market defensive stocks as well? Maybe we should watch the behaviour of other defensive stocks for confirmation.
If it is confirmed, does it imply that the bear market defensive stocks (FPH) will at some stage be at risk of themselves becoming unfairly ravaged by this recent opportunistic investor behaviour.. thus raising the chance of being market re-rated at some later date? (Laggard shares)
Is this characteristic behaviour of a share market in recovery mode? If so early responsive shares are a lot more attractive to the investor than late unresponsive laggard shares.
Will FPH be classed as a laggard share?
Is this going to be the year for the quick footed investor?
A bull calf is born?...or just a technical upward blimp in another suckers rally?
Dom Post article over the weekend
A factory in Mexico is looking most likely for Fisher & Paykel Healthcare as it pushes on with plans to expand its manufacturing operations overseas.
Managing director Michael Daniell says the medical equipment maker is continuing to pull in strong revenues despite the global recession and has no plans to defer a move overseas to complement its East Tamaki headquarters in Auckland.
"We're still in the planning stages, though that's not yet complete," he said. "We've indicated we're looking at locations in both Asia and Mexico, and Mexico is very high on the list." Mexico's close proximity to the United States, which makes up over 45 per cent of the market for Healthcare's products, made sense from a transportation point of view, said Mr Daniell, as well as obvious cost savings.
Exposure to markets in the US has not hindered Healthcare's progress during the global downturn, unlike sister company Fisher & Paykel Appliances and struggling New Zealand stocks like Nuplex, Fletcher Building and Mainfreight.
Healthcare's share price has enjoyed a solid start to the year, closing the week down 14c at $3.06, with the company living up to brokers' expectations that it would perform better than most in 2009 given people's need for medical treatment even in times of hardship.
Mr Daniell said recent additions to the company's product line, such as a new auto pressure-setting flow generator, continued to do well, while cover for home diagnosis of obstructive sleep apnoea (OSA) by US medical insurance programmes was driving demand for higher spec devices.
Healthcare's last public guidance was in November when it indicated to market that it expected to pull in around $450 million of sales and strong growth earnings.
"We haven't changed our position," said Mr Daniell. "Things continue to look good."