Have a feeling it is getting to that point....
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Have a feeling it is getting to that point....
Occaisionally someone comes up with that great piece of financial wisdom "A rising tide lifts all boats". Which is true except for those boats that spring a leak.
Although I have never heard it, presumably someone somewhere (it could me me, here) has also said "A falling tide drops all boats, except for the ones where they finaly fix the holes up and pump out, and the ones that hit the bottom which obviously don't sink further though they may get stuck in the mud...."
Where was I? Stuck in the mud, right.
Anyways, as the NZX sinks so does most of the companies listed on it, despite the fact that a number of them remain very good companies. If SKC city is hitting bargain category then I am sure there are a number of better bargains.
Actually given their performance, levels of debt etc I never understand why SKC trades at such a high price, is it the cash flow?
regards
Paper Tiger
...and I did not mention Mainfreight once ;).
Very good PT
I also agree with you that SKC is pretty highly priced.
The paper said a cheeky bid at $5 might be coming soon. Cheeky because it less than the $6 everybody thought would be coming a few months ago
Put youself in the place of a private equity investor ..... even at current price he would need to fork up with $2 billion for the SKC shares and take on SKC's $1 billion of debt ...... thats $3 billion ...... all for a $250M operating cash flow (before capex)
And just imagine would levels of debt a purchaser would have if the purchase was even only moderately leveraged
SKC still think it may happen ..... you never know it just might .... funnier things have before
So redzone might be on to something .... SKC might be a good buy at the moment .... but like PT if this is the case prob better opportunities
Is SKC a bargain at present?
Answer: No.
I was looking at a price between $3.90...$4.10 to dip my toes ...might just get there this week....looking to the fed to drop rates by .5 this week also...
Aussies have written of the chance of a takeover
Casino bid looking like pie in the sky
http://business.smh.com.au/casino-bi...0114-1ly9.html
Prob means one will be announced this or next week ..... at $6 ... yeah right
the cheaper the stock price gets the stronger the case becomes....the company has been put on the block ...it is for sale...just how much is someone willing to pay is the question...I did dip my toes in yesterday and will drip feed from here on in if it continues to fall...there is one big seller...and has a few left to sell by the looks of it....cant see much further down side really...maybe 3.90 bottom....where are the charts guys???
I am keeping a close on eye on SKC. There will be a time to buy this pup. Waiting for it to form a bottom on the graph.
the eye never lies
over the last 3 years approx its formed a head and shoulders with the neckline just above 4
should it break 4 then I reckon it could easily find 3
looking at shorter time frame view it should have found support at 4.5 (and it did try ) but it failed. so not looking good imo.
This is a TA perspective but one using different method from Phaedrus.
The only reason to hold this stock is the chance of a takeover. And this is getting slimmer by the week. Recently I read they were having to cut back costs involving personnel layoffs.
That tells you it is in a cash cow mode with negative horizons. Add in todays news and who would bother.
Far better pickings on the other side of the ditch.
Test that statement by buying some Cujo..........
today is the day for me...earnings will surprise...
I've held SKC since the placement prior to the float so have had a good run over the years and have partially sold down in the last year or so.
The biggest concern has always been the heavily geared balance sheet and in these days of tighter and more expensive credit this takes on greater importance. Fortunately, the biggest chunk of debt is from US private investors and doesn't fall due until 2012 - 2020. A lot of it is subject to re-pricing long before that, of course.
Given the company's recent poor operating performance and corporate "hiatus" I don't see it making much of a SP recovery, regardless of the state of the market in general.
I might be tempted at $2
cujodog - $2 that would be shocking not suprising!!
I have a feeling someone may be sniffing around at these prices
No surprises in half year announcement as all signalled well before hand
Not selling Adelaide and all suitors seem to have gone away
Shareholders wouldn't want SKC rerated down to a PE of 10-12 would they from the lofty heights of 484
maybe, just maybe, the new boss might get this thing back on the right track
Here you go Steve -
SKC is still in a downtrend. The red arrows are Sell signals.
Buy signals would be generated by :-
(1) A break of the confirmed trendline.
(2) An uptrend (higher High after a higher Low)
(3) A break of the On Balance Volume trendline.
(4) The Relative Strength Index moving above 50.
(5) A break of the 34 day Simple Moving Average.
(6) The 7% Trailing Short Stop being broken.
While none of these have been triggered yet and SKC made a new low just 4 days ago, the downtrend is starting to run out of steam. The most positive sign is the RSI Bullish Divergence (marked in green). You can see that the RSI has been making higher lows while the price was making lower lows. This is a Class A Bullish divergence.
http://h1.ripway.com/Phaedrus/SKC226.gif
this thing is still in undecided space....could go either way....im picking upwards...but then I also bought a couple of weeks ago thinking it was the bottom
Thanks Phaedrus! :)
P. Couldnt you say that before the confirmed trend line you can see 2 humps (call it what you like) that can confirm a different trendline. If you wack a line on those then there would have broken the trendline. Later on of course you are then using around 4.38 as your confirmed trendline.
Just my obsevation.
bottom today
very large blocks of stock married within same broking firm....doesnt normally happen without price moving up....may well be wrong....have been before and no dout will be again
Phaedrus.....is this a break out on the upside???
No buy signals yet, Redzone. The 6 indicators plotted here have worked very well in the past for this stock and while all are heading up, none have actually triggered yet.
There are signs, though, that this just might be the turnaround. See how volume on the $3.48 low of 27/3/08 was higher than any other day over the 5 months of the downtrend? This looks like a price/volume climax such as are found at significant turning points.
Look also at the green volume bar for the next day, 28/3/08. This was the highest volume "Up" day in the history of the current downtrend. (Red volume bars are down days, green are up days and blue, no change).
Now, the last volume bar shown is for today and as such only accounts for volume up to now (mid-day). Obviously this will be higher by the end of the day and a higher volume than yesterdays would be Bullish as well. (Rising price on rising volume)
http://h1.ripway.com/Phaedrus/SKC331.gif
will take some doing to beat that volume....looks a classsic turn around to me but with today being the last day of the financial year might it could also just be window dressing...
[quote=redzone;192099]will take some doing to beat that volume....quote]
I don't think so - it's not that far below it.......
Fridays volume was 3,358,398
Right now (1.30pm) it is up to 2,983,290
Last day of the financial year dont expect a normal market today. I would expect a larger volume of shares traded today across the board than normal. SKC i would think with their large debt would continue to downtrend in this economic climate for some time. Bush is about to inflict his economic revival plan any day now so expect the worst. Macdunk
ok...thats a good sign....I couldnt help myself....I averaged out a few....I do have a feeling our $ is about to take a hit....I still hold the view if SKC were to stay down here at these levels and the $ does take a hit,the market the way it is SKC could be picked up very cheap.....by that I mean at least a $ a share cheaper than what may have happened 6 months ago...all about timing I suppose
Phaedius.....looks lke SKC has broken out to me...
this has $4.30 coming
better off taking the shares instead of the divi.....the sp looks very stong ...a very nice recovery...maybe they have secured a buyer for the movie chain....
Wonder whats up with SKC? Must be positive news out soon or just window dressing?
Red arrows mark SELL signals and Green arrows mark BUY signals.
See how well these simple technical indicators are working. They got you out of SKC very close to the high when the uptrend ran out of steam and got you back in again just after the low when the subsequent downtrend weakened and ended.
A note of caution, though. See how, while the uptrend is still very much intact, volume is falling. This fact is reflected by the On Balance Volume plot. The OBV is commonly one of the very first indicators to fire, but you can see that in this case it has still not been triggered even though every other indicator featured here gave Buy signals days ago. The uptrend appears to be losing momentum and should be monitored quite closely.
MvT regards all this as akin to examining chicken entrails and about as useless. Silly man!
http://h1.ripway.com/Phaedrus/SKC48.gif
Hi Phaedrus.
Have been trying to make head or tail of the TA and cant. Phaedrus any update on those buy signals from a month ago?
cheers
Naylz
Quite simple really the chart shows the price at approx $4-10 it is now $3-92. Go to direct broking web site and play about with super charts. The charts only show you where the price has been with an indication of where it might go next, its up to you to work out if the signal is worth following up on. You will find in falling markets quite a high percentage of false buy signals. Macdunk
Hi Naylz,
Since triggering those Buy signals, SKC has tracked sideways. This should not surprise us too much in view of the falling volume (marked by blue line) we had already noted. This is similar to the situation last October when falling volume (blue line again) showed us that the uptrend was running out of steam. The OBV simply presents this same information in a slightly different manner. The absence of OBV confirmation at the time of the other Buy signals was directly caused by this lack of attendant volume. The OBV has now broken its trendline (circled) but this was done without any real conviction by the OBV merely tracking sideways.
This is just another reminder that the end of a downtrend does not necessarily mean the beginning of an uptrend. Stocks can go into trading ranges that sometimes persist for a long time before an uptrend begins (or the downtrend resumes!)
To make those buy signals "right", price action would need to go above point (2) which would give a higher high after a higher low and thus an uptrend, so at that point can we say that the downtrend has ended.
To make those buy signals "wrong", price action would need to drop below point (1) making a new lower low and continuing the downtrend. Until either of those conditions are met, SKC should probably be presumed to be in a trading range.
http://h1.ripway.com/Phaedrus/SKC56.gif
Phaedrus, how do you deal with a chart that busts down through its up - trend line when the stock goes ex-dividend?
For example, ENV Envestra, went ex a 4% dividend today, and the price action broke a confirmed up trend line as a result. Do you adjust all the price data to take it into account, or is a broken trendline a broken trend line?
RTW,
The usual practice is to correct price data for dividends. If this was not done, there would be the likelihood of false Sell signals being triggered when stocks went ex div.
AS the stock returns to a new low could go back on the radar nothing like a low price to bring in BUYERS..
thats optimistic of you Bricks. theres always the possibility that this is a corrective triangle forming which is in fact generally a continuation pattern. 3:50 and 4:00 are critical levels now.
WELL, the $3.46 bottom has been breached and still going south its noticed in Oz the share price excluding ex/rate is 5 cents lower than NZ this is a bit of a worry, The sale of Christchurch pub is a bit of a twist of assets to what advantage is not known. the dribble about Darwin Resort is pie in the SKY but off to Hamilton SKY Casino in the next week to check it out but just at the moment NO need to rush in as the price has not stopped its SLIDE..
I did have a look at SKC awhile back, but decided to not buy it. The new CEO doesnt inspire me at all. They need to appoint a new CEO with a vision before I will look at investing SKC.
of all the casinos owned by SKY I am predicting that Hamilton will have the biggest up swing in profit.
They had the barmy army for a week ,V8s,Fieldays etc..surely must have made a difference.
WELL , not the best news as Mark Goulopoulos of Tolhurst [SYD] says SELL as the speculation
of a potential takeover of SKY CITY fades and a disappointing 12 months performance and we are noting daily drops in price and as stated the Oz Price is 5 cents down on NZ so we had better hang fire for the MOMENT..
SKC can go much lower from here. It does tell you how bad the economy is out there when a gambling company with a monopoly barks like a dog.
I am with you Dr Who.
I know that in recession casinos actually do quite well. But something about Sky City makes me twitch. Mostly because I think the suitors have gone away and the reason they went away was because Sky City are having trouble containing their overheads which of course means lower profits.
I would be careful with this one. Hope I am wrong. Cant talk my Bro into selling. Dont hold.
Bermuda.
I was very excited early this year when I saw SKC sp at its low and was on my watchlist. I was more excited to see it was going to appoint a new CEO and selling the movie theaters.
After I heard that the only strategy the CEO had was to lure high net worth big gamblers from asia, I immediately took SKC off my watchlist. A CEO with little to no strategy and a lack of vision doesnt give me any confidence. I decided this was a sell and not a buy. I was verbally abused on ST when I mention this (refer to other threat). As it shows, I am right and the sp will reflect this in the long run.
Good luck to SKC shareholders. I am sure this pup will be a buy in the future, but not until we have a CEO that has a right mix of strategy to grow SKC.
I have to say, I think this now a dog ,with very active fleas....I sold a few weeks ago but bloodied my nose
a few free shuttle buses from the suburbs should help get the punters in the door....:-)
What i found most disappointing recently was the following in relation to the sale of the cinemas.
""but ultimately failed to be concluded with the party unable to achieve a
satisfactory financing arrangement""
So your telling me that after all this time and effort the board was dealing with a flea with no dough???
Do they not do a bit of diligence on the buyer or what?
Don't tell me the proposed buyer was that "holy glory investments ltd""(or whatever)...the fella operating out of his basement in blockhouse bay who tried to take over RBD a few years back....??
shaking head unknowingly
Moi.
Wow, the price is in free-fall. If the dividend stays around the 24c mark per year. Thats a pretty good return.
Dosn't need to be private equities. What about a corporate raiders of old? The GPG's of this world??. Didn't they have a stack of cash from earlier capital raisings? Admittedly they have spent some on Tower and no doubt poured some into Coates. If I remember correctly Brierleys were involved with this at the beginning before selling out. Maybe there is some value to someone with the cashflows a casino business generates. But like you I agree it is more likely a future option once the management get it heading in the right direction
if it gets to 2.75 and our dollar drops after fridays numbers...yes this and fph and fpa could all be targets.....still plenty of money around ..it comes down to "I will only buy if its a steel"....like the housing market...and every other market ..then one day someone will blow the whistle and we will all be of to the races again...its just... who will blow the whistle.
If companies were willing to do the numbers on SKC at mid $4. Even though they decided against it, they must have really found something they didn't like to not reconsider at low $3
THERE an hour clipped them for $400 then the floor walkers start following me around eyes everywhere they hate to loose if they do that for $400 what would they do for $4000 any way its about the same size of a medium Sydney Club would not attract big rollers at all so not much going for them, But they are the only game in town..
Parking they charge to get out bet the suckers that loose would love that plus it was FULL
after hassle to get in it was 10.30am morning rush probable the workers cars, well $$ stuffed it in the wallet and headed back to the ROTORUA Workers Club..
@ $3 bucks not enough DIV to make it an ATTRACTION..
Hello from Adelaide :-)
I am over here checking out Sky City's problem child. Saturday night and the gaming tables seemed largely full, with the slot machines probably around 75% ultilised. It wasn't a bad night so no excuse for the facilities not to be well used. The restaurants certainly were and doing a good trade around 9pm.
Friday the previous night was much quieter. Pokie machine utilisation only 50%. The smoking lounge was not that well used so perhaps the smoking ban is having an effect?
SNOOPY
Chief Executive Update - Confirmation of FY08 Profit Guidance - Standard and Poor's Investment Grade Rating (BBB-, Stable Outlook) - Debt Profile Update
http://www.directbroking.co.nz/direc...spx?id=1991220
THERE forecast is out but the Div is still to low for this market with all its woes this is an income market high prices are OUT.. SKC to head DOWN..
I will look at buying some SKC shares when they replace the CEO with someone who has a vision and strategy to grow existing casino, reduce debt and sell the cinemas.
Whats the divy likely to be then? 10c
To make 21c for the year? $110M * 90% / 472M shares
10c is about 6.6% pa on the current share price. Not as flash as you'd hope after quite a large drop in price already.
WELL will the $2.92 bottom price SKC be broken this week money in the market seems to be drying up for all stocks while they talk about inflation the base interest rate the Reserve Bank will not drop, until that happens the market will SLIDE..
WELL the magic number was reached $2.92 but did not go lower as UBS let it be know they
being the largest holder of the company has been selling millions and now below the 4.9% level
so they don't have to tell us now of there position and continued to sell a $8 million lot yesterday.
But as the share price did not fall again means a NEW buyer is out there who is it who cares as the ledger is wide open top 20 only have 48% control, so still say its overpriced its up to you if you chase this DIVIDEND..
Hey Bricks,
Where does your $2.92 number come from? Is this a previous low for SKC?
Massive comeback since UBS finished selling off their holding I guess.
27% in 3 weeks, only 2 down days in the last 14.
The buy side still looks alot healthier than the sell side. Question now I guess is where will the price come to rest. The price seemed pretty happy in the $3.80 - $4 range for the first half of the year, so I could be soon.
AJ
next time you find out that a big player has finished moving in/out of a stock
can you please post
I missed this SKC move......but gosh for those who got in its beck a heck of ride up.
Well done
personally if i'd got in at 3.00 id be taking profit here
Just to add a bit more to my on the spot impressions of 'Sky City Adelaide' six weeks ago.
The casino is sited in the old railway station building. However, that possibly gives a wrong impression. Railways management may long have moved out. But the commuter trains still go to the 'old station'. The situation is analagous to Wellington Railway station. Except there is also a new railway station in Adelaide on the outskirts of town. But that new station is principally there to service the interstate trains: "The Ghan" that runs from Adelaide to Darwin and the "Indian Pacific" that passes through Adelaide on route from Sydney to Perth.
It is true that the old station is not really in what I call the commercial centre of the city for residents. It is however in the tourist district (right over the road from my hotel which was convenient) and adjacent to the river and town hall complex, with the museums, state art gallery and state library within easy walking distance. Furthermore, there is a free tram (actually it's more like a light train) that runs from the 'old railway station' to the main Adelaide business district and vica versa. Before visiting Adelaide I had the impression that the location of the casino was far from ideal. But really, I don't think location is a problem. The casino is easy to get to. I certainly didn't see any "car park full' signs. That made me think that the new car park project (since cancelled) might be of dubious merit. I was surprised how well city founder Captain Willam Light's layout of Adelaide city worked. Adelaide is a city the size of Auckland, but it was seemingly immune from traffic jams, even of the kind I see daily in Christchurch - a considerably smaller place.
The other factor I hadn't fully appreciated was that Adelaide is the slowest growing of the state capital cities (behind Darwin, Perth, Sydney and Melbourne in that order). So there isn't the population push to keep Adelaide moving forward at the same pace as those other capital cities. Interesting as Adelaide was, I think it is fair to say that it is part of the 'secondary tourist circuit' in Australia. You can partly tell that by the restaurants. Dine out anywhere in Sydney and Melbourne and you can more or less guarantee that you will be served by an an ethnic European who has made Australia home or a tourist on an OE working holiday from the Continent. And some of those 'working holidays' can last for several years! In Adelaide, most of the hospitality industry workers are born and bred Australian and, if not, likely to be educated in Adelaide which houses a well respected university (one of three) majority dedicated to the tourist trade.
The Adelaide casino does have a high roller high value tourist element. But in order to prosper my feeling is that it will have to look to the local community. That isn't necessarily a bad thing. But it does mean growth prospects will always be limited, in particular in comparison with Darwin and Auckland. One tip to keep fellow shareholders amused should you ever dine in the 'Norths' ground floor a la carte restaurant. If you are ordering wine for dinner, make it the most expensive bottle you can afford. The more expensive the bottle is, the futher up it is on the 'wine wall' . And it is quite an amusment watching the staff scaling the equivalent of a two story building by ladder to retrieve your wine request!
SNOOPY
discl: hold SKC
Well Bricks, almost a year has gone by since you made that comment. Since that time I have been steadily increasing my investment in SKC to the extent that I have nearly doubled the number of shares that I own. You picked a bottom of $2.90ish. Well, if managment had not gone ahead with that capital raising earlier in the year you might have been right.
I can't say that my investments in SKC over the last year, or the last three years for that matter, are looking good. The shares I have been issued in lieu of dividends may have been 'tax effective'. But I am well underwater on those dividend entry prices overall (I have 'bought' shares at $5.36, $4.78, $4.53, $4.36, $3.85 and $3.60 since April 2006). My only saving grace are the shares that I bought under the dividend plan at $2.52 earlier this year.
Likewise my 'on market' purchases over the last twelve months at $3.06, $3.23 and $2.90 are all under water too. I managed to snaffle up some more shares under the shareholder top up offer in May at the institutional capital raising price of $2.61. But like everyone else I had my application to buy scaled back. I rectified that late last week by picking up some shares at $2.59 as the market dipped below the top up offer price. Today the share has been trading around $2.62. That is a long way from the $5.50 plus when former CEO Evan Davies responded to any drop in share price with a public news release saying that Sky City was ripe for takeover. I don't think anyone would believe that takeover hype today. But the hot air that has come out of the share price since, has made SKC -I think- an outstanding investment prospect today.
The queues outside of the Lotto shops when 'Big Wednesday' jackpotted a couple of weeks ago brought home to me that the kiwi gamblers instinct is still alive and well, even in these times of recession. I don't see a 'crow about' result coming from SKC this year, despite the encouraging signs from both the Adelaide and Darwin investments. Even next year (FY2010) I would be surprised if the result is any better than 'steady as she goes'. Looking further out than that though I think many investors will be cursing themselves that they didn't stock up on SKC shares at around $2.60 in the middle of 2009 when they had the chance. Even at a reduced annual dividend rate of 18cps that still gives a gross dividend yield of 10% with the promise of better to come. It is investments like SKC that prove that for the long term investor, you don't have to buy and sell to do well.
SNOOPY
discl: hold SKC, average entry price $2.60
SKC is currently in a steep downtrend with OBV also declining steeply.
Good that you are long term,but there are actually stocks trending upwards at the moment,not many,but they are there.
Nice post Snoop
I’ve been fascinated over the fall of SKC, and so close to getting in so many times thinking “surely this is the bottom” – I took the plunge the other day at 2.57 to a) To free up my time/stop me watching this dam stock so close b) I’m a long term investor and see no reason why this stock can’t get back to its high post recession/consumer fear.
If the swine flu scare is to hang around this could have adverse impact on people staying away from packed areas. I can’t see this panning out.
I’m looking forward to Auckland’s rugby world cup proposal – all towns involved need to send these in to advertise there offers to tourists, they are based on the WC but essentially future looking at what they are going to do to attract tourists to their town post WC.
Either way the WC is expected to bring $500m + to NZ, and with the majority of it being in Auckland – Sky City should eat a nice chunk of this.
Rumour has it, cinemas are recession proof. I’ve read it from a few sources now - http://www.winnipegfreepress.com/ent...-49169937.html
Looking forward to the cinema results.
Could the OBV be declining steeply because those 'weak holders' who got their shares cheaply in the recent share issue:
1/ have now 'sold out'? -OR-
2/ are no longer able to sell out at a profit?
Just because a share price is trending down kizame, that does not mean it will continue to go down (if that company is making a profit). At some point the downtrend will end. If the share is cheap enough I often buy at or near historic 'support' points. Particularly if that support point co-incides with a significant dividend yield figure, like a gross yield of 10% (based on an estimated annual dividend of 18cps and a share price of $2.60). That kind of SKC return is double what you will get from a bank term deposit these days.
SNOOPY
Nice timing Buns. With the SKC share up again today, you may have actually picked the bottom! Helped of course by all those TA investors desperately selling out because the share apparently breached the $2.60 support level.
As for the share getting back to the high $5 trading range, I just can't see that happening.
Even if profits return to record levels people are not going to pump up the PE they will pay and consequently share price level up to where it was before. No-one could fund a takeover at those high prices today.
Swine flu this year is IMO already priced into the share, Buns. And by the time a more virilent Swine Flu 2 is circulating, we will have a vaccine circulating to combat it.Quote:
If the swine flu scare is to hang around this could have adverse impact on people staying away from packed areas. I can’t see this panning out.
Yes this is what I am positioning myself for, by buying into SKC now. Everything that happens between now and then will be just noise before the end of the wash IMO.Quote:
Either way the WC is expected to bring $500m + to NZ, and with the majority of it being in Auckland – Sky City should eat a nice chunk of this.
It would be nice if the cinemas turned around. But if you look at the size of those businesses relative to the casinos SKC operates, cinemas are not material to the overall scheme of things - whatever happens. So it is just as well casinos are relatively recession proof too.Quote:
Rumour has it, cinemas are recession proof. I’ve read it from a few sources now -
Looking forward to the cinema results.
SNOOPY
Hi Snoopy, as regard to OBV trending down,I would say it would be a combination of both 1 and 2,and maybe 3, that the market is giving this stock a higher risk rating due to the downturn; but regardless of why it is happening,it still is,and in my experience,even though you are with a so called blue chip stock,you just don't know what could happen in this current very uncertain market. I have been caught out in the past,not by averaging down but by holding a downtrending so-called quality stock only to be left with an aweful lot less that I started with.
I currently hold Nuplex which i will dump as soon as it hits my stop loss,I don't care what dividend they pay,but am determined to preserve and grow capital.
The fact you mention support points,lends me to thinking that you do follow some TA,so if that's the case(and I am presuming here)why not wait till you see the stock start a new confirmed uptrend,the best of both worlds,and your divi yield overall will be greater,having purchased all the shares at the cheaper price.Sorry but school of hard knocks has taught me well.
Regards.
Well if that is the case, I am willing to bet against the market. During a downturn it is the gold level treats that get hit the worst. The bronze level bonuses, the chocolate bar and the odd flutter, are not so easily given up and often used as palliatives for not being able to afford that big cash splash.
Oh I don't *know* what is going to happen in this uncertain market, that is something I fully acknowledge Kizame. But long term SKC are the succesful bidders for the only casino licence in Auckland, and hold the only casino licence in South Australia and in the Northern Territory. So long term, in 8-10 years I am absolutely as certain as I can be that Sky City will still be a leading casino operator. The long term future is IMO nowhere near as uncertain as you think it might be Kizame. And as for the short term future, well if you can afford to hold through the short term uncertainty, enjoying those fat dividend cheques along the way of course, then who cares?Quote:
but regardless of why it is happening,it still is,and in my experience,even though you are with a so called blue chip stock,you just don't know what could happen in this current very uncertain market.
TA practitioners don't tend to worry about the 'whys' of support points. But these high dividend paying shares do compete with term deposits as a source of income. So IMO the gross dividend yield *is* a highly important figure. Generally I would expect a high quality income earning share like SKC to trade at a couple of yield points above the six month and twelve month bank term deposits. SKC is trading at more than *four* yield points higher than the bank deposit rates. That means there is a pretty big margin of safety in the SKC share price verses term deposits. And that logic applies whether the SKC share price is trending either upwards or downwards.Quote:
The fact you mention support points, lends me to thinking that you do follow some TA, so if that's the case (and I am presuming here) why not wait till you see the stock start a new confirmed uptrend,the best of both worlds,and your divi yield overall will be greater,having purchased all the shares at the cheaper price. Sorry but school of hard knocks has taught me well.
However, I do agree that as the SKC is liquidity is good, perhaps I could enhance my returns on SKC by using TA. And maybe I yet will! I am thinking of my purchases of SKC over the last year as more of an 'insurance policy', than trying to time my buying point to precision.
SNOOPY
Online gambling competitive risk is increasing.
How short some memories are. Since those who have forgotten the history are often doomed to repeat it, here is a history lesson for you Beacon.
Sky City has been along the electronic gaming road before. This rather upbeat comment is from the FY2000 annual report p9.
"We are very interested in pursuing gaming and entertainment strategies in the electronic sector. To this end in July we announced that we would take a 6.8% stake in Canbet limited , a licensed sports wagering operation based in Canberra. The agreement we have negotiated will allow us, subject to due diligence, to move to a 33% holding in Canbet within the next 15 months."
By the time of the 2004 annual report, Sky City were sounding less enthusiastic. From p9
"Sky City originally invested in ASX listed Canbet in 2000 to secure a strategic investment position within the rapidly developing internet gaming and wagering sector. Whilst internet casino sites have proliferated around the world, it has become clear during the years since 2000 that internet gaming is not a competitive threat to land based casions and the strategic rationale for for SKYCITY's investment in the on-line sector has diminished. Canbet, like many other internet sports wagering operations is experiencing a range of business challenges. The company's financial performance during the 2003/2004 year proved extremely disappointing for all shareholders, including Sky City."
"As a consequence of Canbet's trading difficulties and in anticipation of the proposed merger of Canbet with International All Sports (IAS) of Australia, SKYCITY resolved to write off its investment (a 33% shareholding, on the books at $20.9m) in this company as at 30 June 2004."
I have wondered since what became of Canbet. But it was your comment Beacon that spurred me on to do some internet searching. Canbet has just been sold -again- to a couple of Singaporean investors. This info from a blog at the
http://www.sportismadeforbetting.com/
website.
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IAS sells off Canbet
Canbet sold to Yin Khing Investments for $1million
by Scott Ferguson
Hardly a surprise, Canbet has been a lemon for sometime. Back around 2000, Canbet was flying. Licensed and run from Canberra (hence the name), it was a leading brand for betting on US sports, betting tight margins and trading the American way - copy the Vegas line and move it when everyone else does. Move the price a few cents and the scalpers come in to balance up the books. But then they got too ambitious and tried the same formula on European and Australian sports. They failed dismally. They moved the operation to the UK to gain more European clients and make better use of the timezone, but all the while, employing little resource at risk management and trading. A sportsbook valued at over US$20m was going downhill fast.
Then along came tighter regulations in the US, forcing Canbet to cut all their ties with American customers, who had been the entire reason the business was profitable. IASBet came along soon after and bought Canbet for $1m, a huge drop in price compared to their high-flying days. The value for IAS was in the UK licence, which they had been seeking for some time. IAS tried to extend their Australian operations into Canbet but like much of their trading, couldn't get it to work. IAS make virtually all their money from racing and proprietary trading off their brilliant databases and trading models. Their profits from custmers are negligible.
The Canbet operation continued to flounder, losing AU$8.6m in the 2007/08 financial year and another $3.7m in the latter half of 2008. The time had come for IAS to cut their losses and get rid of the lemon that was hurting the value of their share price.
The new owner, Yin Khing Investments, is registered in the British Virgin Islands, with links to Singapore.
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A sorry story all round it seems. Still if internet gambling does rise pheonix like again to become a threat, Sky City with their industry experience, are certainly in a position to participate. Purchasing a near bankrupt outfit for $1m would be well within their capital capabilities.
SNOOPY
That is direct competition in gaming you talk about snoopy. The internet gaming world has moved on. Further, you have indirect competition to traditional gaming from the likes of CMC, IGG, Forex betting - and the industry is still naescent.
How recession proof SKC is, we shall know in time. However, let me not be a spoil sport. I have no economic interest in SKC anymore. Just the observations of a tyre kicker.
Internet betting is my area of expertise and is the field i make my money in.
The bottom fell out of the internet poker market a year or so ago , although consolidation has been good for one or two companies such as poker stars .
Players flock to where the other players are , as they find full tables , its very difficult for new entrants.
As for horse racing and traditional online sports betting companies i would be wary of them all. This is because there is a wagering revolution sweeping the world , its real impact is yet to be felt in australia but it will be.
The revolution is the betting exchange betfair.
Crown hold 50% of betfair australia , and it is their hidden jewel. The other aussie wagering companies are desperate to have betfair banned as they know the product is far superior to anything a traditional bookmaker can offer.
In five years time the betting industry in australia will be a very different beast than it is today.
As for sky they need to concentrate on turning their casino into a must go nightspot which is entertaining for more than pokie machines. They should forget about an online presence , the market is already saturated
I completely agree.
I did touch on this same strategy a number of posts back. The current CEO has the strategy all wrong. SKC needs to be a one stop entertainment center to attract people who will eventually be a punter in the casino. This is a proven strategy overseas and with SKC having a monopoly it can be a winning strategy here.
I still think the CEO is not the right person for SKC. As soon as he steeps down, I will buy SKC shares.
Christchurch casino does it better , they might not have much in the way of entertainment , however many people go primarily to use the restaurants .
With auckland casinos bigger size and larger surrounding population ,, there is no excuse not to have topline acts regularly appearing . After all its not like there is much entertainment competition anywhere in the cultureless hell hole
And even less competition now that Sky City has pulled $500,000 worth of sponsorship from Auckland's Starlight Symphony Concert, threatening the future of the event. That was quite a lot of money to satisfy the Aucks. And with sales down at the Auckland casino, the citizen Aucks have now got their comeuppance. Still no doubt the boy racers can put on a show at one tree hill to keep the populace entertained at an appropriate cultural level.
SKC's overdue actions have certainly improved the share price with the share up again today.
SNOOPY