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
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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
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.
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
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.
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) :)
good stocks won't be cheap.
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.
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