Have to assume that the 9 mill shares odd get shared around a few holders .... no SSH since
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Have to assume that the 9 mill shares odd get shared around a few holders .... no SSH since
JUST read about KFC world wide is going gang busters and back at headquarters in USA stated that in Britain they will build another 300 stores and train 9,000 chicken chef`s
[what ever that is] and happy to do it, now back home NO notice about the AMP sale
but i think they upwards of 12 months to notify so with this all going on and not that many good things to buy that is SAFE "BRICKS" may resume buying RBD..
Bricks whatever is happening in the UK market will not help RBD. If you really want to benefit from the worldwide expansion of KFC, I suggest you buy YUM Brands (NYSX listed).
We won't have to wait twelve months to find out where those AMP RBD shares went because the RBD annual report will be due around May.
Nevertheless you do have to be careful what you buy in this market. I have gone back to the old chesnut of shares with relatively inelastic revenues (like utilities and food companies) who have their debt situation well under control.
I have done a sweep of the NZX listed shares and the share that keeps coming to the top of my buy list is RBD. Perhaps we won't see much growth. But that 15% yield I think is incredible with bank deposit rates now below 5%. RBD is about the only retailer that hasn't made a major profit downgrade. Try as I might to find a better retail investment, I can't do it.
Just to prove I haven't got stars in my eyes I am aware of the ongoing negotiations with YUM regarding Pizza Hut franchise renewals. I know that YUM won't be keen to lose half the Pizza Hut chain which could happen if RBD does not renew the big tranche of franchises in 2010. I guess the big unknown is whether YUM can force RBD into a slow and painful exit from Pizza Hut N.Z. as happened in Victoria. The problem is now, what private operator in sensible mind would lay out big dollars to buy a PH Franchise off RBD? And what bank would lend to them? I believe both Chairman Van Arkel and CEO Russel Creedy are the men to talk tough on these franchise renewal deals. 'Roll over and giggle' is no longer an acceptable renegotiation stance in my view. The latest quarterly sales should be out soon, but really until we know the outcome of these Pizza Hut negotiations the medium term profitability of Pizza Hut is uncertain.
Not uncertain enough to put me off investing though. I bought a few more RBD shares last week when the buy order I handed to my broker seven weeks ago was finally acted on!
SNOOPY
discl: hold RBD, YUM
A profit upgrade! IN this kind of environment? This stock is gonna rock tomorrow?
Watch those tubs of KFC fly out of the door as the economic downturn bites deeper and harder. Best value for money.
Starting to look solid. Awww how cute, Snoopy and Phaedrus could be in the same stock soon.
Well we know one outfit that wasn't a buyer. SSH notice posted today that Tower had reduced their shareholding below 5%. I must admit I hadn't even registered the fact that Tower had a 5%+ stake. Looking back at the SSH announcements I see they only declared their position on September 18th 2008. Still Tower haven't fully sold out yet, retaining 4.2% of RBD shares. Looks like they sold out of RBD at about the price they bought in at.
The price is holding up at around 70c though. And am I right in saying that turnover has been higher than normal since AMP dumped their stake at the start of February?
SNOOPY
I have to admit I got this one wrong. I was sure the share price would stall at the 80c level. But as of this morning a bid of 83c will be needed to dislodge shares from existing shareholder's hands! A gain of 38% in a little over a month while the rest of the market goes down is not a performance any seasoned investor can ignore. It certainly shows the concept of 'investment caution zones' where all investment decisions are put on hold while the broad market slides in a new light. The fact is, there are always shares that are going to do well even in a bear market. It just takes a little more work to find them.
Of course there are other shareholders, like those who have recently added themselves to the Nuplex share register, who have done even better. But from my perspective, investing in Nuplex would have been a huge gamble, and in comparative terms an investment in RBD was near to 'downside risk free'. Why do I say that? RBD has an outlook of strongly growing underlying profits coupled with steadily reducing debt, as the debt is paid down out of those profits. The strongly growing profits would only have been obvious to those who looked behind the headlines which reflected the Pizza Hut problems (that is where doing your homework comes in). Nuplex OTOH, was looking at sharply reduced profits and was crippled with debt and at the mercy of its bankers. A more chalk and cheese situation is something that is difficult to imagine.
I dubbed 2008 'the year of retail', as that is where I saw the best investment opportunities arising. The market hammered retail shares in anticipation of sharply reduced retail profits. What surprised me was that although we have a number of smart retail operators in New Zealand, I couldn't make an investment case that would be better than buying more RBD shares. So my newly allocated 'retail investment capital' all went into buying more RBD shares. Increasing my RBD holding by 40% didn't do anything for diversifying my portfolio. But it sure impacted on my returns. And all this from a company with a culture of management mediocrity!
There will be plenty of my critics who will be wearing an omlette balaclava over RBD. I don't want to dwell on this as even at 82c I am still 20c under my all time average purchase price - even if dividends over the years put me well ahead. But perhaps now you can all see how poorly informed you all were in viewing RBD as a candidate for inevitable bankruptcy. In fact, it is the way that RBD has survived so many years of mismangement that shows how incredibly strong this underlying company is. Let's see what else new train driver Chairman Ted van Arkel can extract from his new charge. Please move right away from the platform while the new conductor, CEO Russel Creedy blows his whistle. We are on a roll. Next stop is $1 per share.
SNOOPY
discl: hold RBD
As a "Buy and Hold" candidate, RBD has performed exceptionally poorly. A quick glance at the long-term chart on page 83 shows the long downtrend in gruesome detail. Regardless of dividends, this stock has been a losing proposition for years.
Take a look at this, though. RBD's average daily volume is about 100,000 shares. Every so often, RBD volume abruptly increases - a lot. For the purposes of this exercise, a Volume spike is defined as any daily volume over about 1.8 million shares. Such spikes are marked by blue bars at the top of the chart. The idea here is to buy when a spike forms after a downtrend and Sell when a spike forms after an uptrend. Because many of you do not have access to the market during the day, the returns and entry/exit points shown here are based on buying or selling the day AFTER the signal. Following these signals would have given a compound return of almost 500% in just 4 trades over 12 years. Plus any dividends, of course! This, on a stock that is worth a mere fraction of what it was way back in 1997!
See how this absurdly simple "system" kept you out of RBD for years at a time as the downtrend ground inexorably on. (There were no volume spikes from mid 2005 right through to the end of 2008, for example). Interesting eh?
The latest huge volume spike flagged an excellent 65 cent entry point into RBD. At well over 9 million, this spike was RBD's third largest ever.
http://h1.ripway.com/78963/RBD41.gif
Phaedrus, this is quite interesting. Looks like I need to look into the volumn a lot more. Waiting to offload the small package I've got.
Well I had KFC last night for the first time in about 7 years and I was actually quite impressed. The cleanliness of the restaurant, the service and the food, were all good.
I was just in for a snack before hitting town and had a snack deal thing....One chicken drum stick and chips for the bargin price of $3.
The only thing that let it down was that the chips didn't have that chicken salt taste I remembered and is so often talked about.