Very tempting to buy at these prices.
ASX as a whole is falling so might wait over the weekend and look to purchase next week.
I uncovered SNL about 4-5 months ago and really like the company and it's management.
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Good luck ENP....market is closed Monday, lol.
Watched it all day, but didn't really want to make a move ahead of tonight's jobs report. My current holding is worth almost double anything else I've got, so also mindful not to push it too far.
Really didn't think we'd see it back at these levels.
Well I am relieved I sold a few up at $1.85 when I thought it was fully valued... I think they need to get the full year result out of the way and then maybe time to add again if outlook sounds positive enough. It is possible they will report a result lower than last year - although, if so, probably only slightly. Whether or not current price of $1.26 is good buying will depend a lot on how they report the outlook. Although, in the short term, the price is probably sustained by the dividend at these levels.
Wouldn't be surprised if conditions have softened a bit, but the nature of their business is such that sales should be fairly resilient.
Even though SNL is now trading on undemanding multiples, it could get even cheaper, given how thinly traded it is.
I'm in this one for the long haul, so I'll cop the lumps when they're dished out.
With the mining and overall Aussie economy slowing down, so will the amount of goods being transported.
This is good and bad for SNL. Firstly, trucks won't be transporting as much around the country. However, it is also good because more people will catch the bus instead of driving to work, putting more wear and tear on buses. More companies will also prefer to repair their current trucks instead of buy new ones.
It will be interesting to see where it goes from here, but I'm happy with the management, their personal shareholding in the company and the investing into new distribution centres, etc. A 5.5% or so dividend yield isn't bad either. If the company grows revenues 10% p/a like they plan, perhaps increase profits around 11-12% per year and say if the P/E ratio increases to 14 or 15 then we are looking at returns of 15-20% per year for the next 3 years and beyond.
Huang Chung and Lizard...
What do you think are the major risks for SNL going forward and what should we be tracking with this company going forward?
It's really hard to see too many risks with this business, other than more competition from others seeing it's a good space to operate in.
Read Maxitrans recent reports and you'll see how they are keen to be expanding more into the less cyclical and higher margin parts business, with their Colrain business and recently acquired Queensland Diesel Spares. Metcash have also recently bought an existing truck parts business, so obviously feel this is an attractive space.
The mining downturn might have some impacts, but I wouldn't overplay it's significance. Probably just as significant to SNL's fortunes are agriculture, construction and general transport (including refrigerated transport). A lower $A could help with exports.
Every business has risks. Don't get too complacent.
It imports pretty much all the parts so a lower $AUD would be a dis-advantage to SNL.
Did you find any information about when the new distribution centres and hubs they are building will become profitable and what return on capital they hope to make from the investments?
I wasn't being flippant ENP, but that's where I see the risk to SNL going forward.
A lower $A certainly doesn't help your customers, but, other than at the margins, it's hard to cut back on maintenance of trucks and buses if you want to keep the wheels moving and pass your roadworthy checks.