Could someone display a TA chart for Ebos for me thanks?
bigcharts.com doesnt give me new zealand company charts.
Phaedrus a favour thanks?
Love your charts with the buy and sell signals eh
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Could someone display a TA chart for Ebos for me thanks?
bigcharts.com doesnt give me new zealand company charts.
Phaedrus a favour thanks?
Love your charts with the buy and sell signals eh
Cheers
anyone hold EBOS?
Dazza
Try putting NZ:EBO instead of an AU stock code that displays what you want, then hit Draw chart logo next to it. Up comes a symbol lookup with NZ:EBO, then choose the go to Advanced chart button on the right and hopefully everything works with the existing setup you had for the AU chart. Good luck. It is one day behind as well. Worth persevering with but has driven me crazy at times. It may be that this doesn't work for you but I can get most of the common NZ companies. Good luck. :)
Here you go Dazza. Charts really don't come any simpler than this. We have a nice clear uptrend, with a confirmed trendline and trendline-break "Sell" signal. Then we have a nice clear downtrend with a confirmed trendline and trendline-break "Buy" signal. Now we have a new trendline in place, based on the lows of the current uptrend.
The OBV is interesting. Note how it continued to climb while EBO was in a downtrend for most of this year. EBO was being accumulated over this period. Note the activity of the "smart money" (green circles). Big players (who presumably know more than you and I) were buying-up large as the price fell. I don't think much of their timing, but their intent is of interest.
Some people will have ridden out this correction. No-one knew how far the downtrend would run, so to me it seems foolish to "tough it out". Why run the risk of it continuing on? In any case, there was money to be made by selling then buying back in again after the correction.
Note that EBO was one of the 16 stocks identified in the "Market Perspective" thread as a potential buying opportunity. This was based on the idea that you want a fundamentally sound stock that is in a "long-term" uptrend. You want it to have been in a "medium-term" downtrend of reasonable magnitude and you want that downtrend to have clearly ended. EBO meets all these conditions quite nicely, in my opinion.
http://h1.ripway.com/Phaedrus/EBO105.gif
The chart includes today's latest price of $5.05. The Close may be different.
After two years of absence from the NZX, i have purchased my first shares since the NOG days of 2005.
Ebos - is the company that i have purchased today. I have been reading over their aquasition of PRNZ , i think this is a superb move by EBOS. The duolopy that pretty much existed has turned into a monolopy pharmacy wholesaler.
This is a LT share for me, in which i will happily buy on the dips when i start working in November.
Going to Dazzas retirement coffers this one it shall.
Dazza
A good choice, but than I have to say that as a LT holder.
You being in/close to the industry will probably have a better insight
than the general investor.
Of course coporate play is always on the cards with the Stewart family's presence - not necessary good.
cheers
who are the stewarts family?
PRNZ has had about 3 different owners in the past 5 years or so. I am not surprised that the pharmacy brands division was not included into the sale, as PRNZ had outbid Life pharmacy a few months ago for that.
So glad Life pharmacy didnt buy the pharmacy brands though.
Pharmacy brands is the banner group to all the unichem/dispensary first/amcal pharmacies in new zealand.
I can see the business operations of PRNZ is good.
My only question mark is Ebos's management, however in saying that i do notice that Peter from PRNZ is now a director in Ebos which shores things up.
foodee, my questions i guess to you are: who are the stewart family? and whats your opinion of Ebos's management?
Dazza
The Stewart family through Python Portfolio Ltd is shown as the largest holder at just under 10%. They are going to be prominent players in the health sector - at present playing for ABA.
Management, I guess is doing the job without any 'major'. There is always room for improvement.
cheers
if take over etc
i would think one of the big 3 wholesalres in aus
but stewart family interesting, will google them
The Stewarts are the family of the late Sir Robertson Stewart who founded the Christchurch electrical components manufacturer PDL Industries. Sold to the French a few years ago. Their company Masthead is currently attempting to take over Abano .
Disc. Hold EBO.
Bgt today ... 10% discount to recent prices, 5%+ dividend yield and great growth prospects. Healthcare is a great long term place to put yr money!
Phaedrus – could you please post a TA chart for Ebos. Of interest would be the buy / sell signals. I see they that the SP is quoted today up at 480 – 485cps..
Would this be the recently posted div pulling it up or just a supply demand thing?
Your comments would be appreciated..
Cheers M
Melchet, EBO is in a long-term (18 year!) uptrend. It is in a "medium-term" (2 year) downtrend and it is in a "short-term" (4 month) uptrend.
The chart shows that the confirmed trendline monitoring the medium-term downtrend was broken about 3 weeks ago, giving a Buy signal. Note that technically, the medium-term downtrend has not ended yet. It would take a Close above the resistance at $5.00 to accomplish that. Resistance/support is often found at round figures.
The "short-term" uptrend has a confirmed trendline in place. A break below this would signal an exit from the trade entered at the green arrow.
The OBV plot is interesting. See how the OBV continued to rise while prices fell over the first half of this chart. EBO was being accumulated in spite of the downtrend. Note that the OBV has been flat/falling for the duration of the short-term uptrend. In spite of the steepness of this uptrend, unless it gets some volume support it is likely to run out of steam.
http://h1.ripway.com/78963/EBO47.gif
Phaedrus
Thanks for your time collating the chart and your opinion.
Looking at what has happened over the last week, there has been another peak in the last few days at $4.80. It has dropped back to $4.65.
In reading what you have said, could we expect another smaller rise less to a peak lower than the $4.80 and a corresponding drop a little lower than the $4.65.. Going on the OBV and the medium-term downtrend?
Cheers M
Melchett, EBO is forming a Symmetrical Triangle pattern. When these appear after an uptrend (as in this case) in 64% of cases they are a consolidation pattern and break to the upside. In 36% of cases they break to the downside. Note the falling OBV, though. To my mind this does not auger well for EBO in the short term, so I reckon that a downside breakout is at least as likely as an upside breakout. Any downside breakout could mean a trendline break as well.
In the event of an upside breakout, it would not be unreasonable to expect some resistance at $5.00 as before.
http://h1.ripway.com/78963/EBO411.gif
Lay off the adulation eh Lodger!
It is important to realise that we are aiming at a moving target here and things can change very fast. While a week might be a long time in politics, a single day can encompass a lot of change in the market. Look at this series of charts, just a few days apart, and see how rapidly the prognosis can change.
Chart number one (just before Easter) :-
http://h1.ripway.com/78963/EBO1.gif
THE VERY NEXT TRADING DAY (immediately after Easter) everything suddenly changed. Very strong buying pressure appeared and carried all before it. (Tall green line in Volume histogram at bottom of chart)
http://h1.ripway.com/78963/EBO2.gif
Here is the latest chart. Note how prior to the pivotal big Upday all high volume days were down days (red bars). See how after that crucial day, all high volume days were UP days (green volume bars). In a single day, market sentiment toward EBO changed from negative to positive.
http://h1.ripway.com/78963/EBO3.gif
EBO NPAT up 18.4% to another record!
And SP jumped to a two year high of $5-74.
Anyone else holding these?
:cool:
Have held them, off and on, over a number of years, and currently holding. They have served me well. They tick a lot of boxes: healthcare products is a growth industry, wealthy cornerstone shareholder (Stewart family), steady acquisitions policy (with conservative debt), and Waller has proved a capable (and well-paid!) operator.
Shares tend to be tightly held, so liquidity can be a bit of an issue.
EBO continues on as a perfect working example of textbook TA in action.
Every move has been foreshadowed.
http://h1.ripway.com/78963/EBO820.gif
EBO's strong run continues, up to another 12 month high of $5.95.
Elections as to bonus shares/cash dividend close on 17 September. The "Buyback Offer price" has been set at $4.691798. Looks like a no-brainer decision to take the shares on this occasion!
;)
After having held varying amounts of EBO over a number of years, and reaped some good returns, I decided earlier this week that the time had come to end my love affair with this stock and say my final good-bys. The affair has been going nowhere, for some time now. Used the proceeds to take up a new investment in NZX and, although this investment did not precede the announcement of the share split and new dividend policy, nevertheless I have "come out better off" as EBO has continued to slip and NZX to strengthen.
As we all say, "I should have done it ages ago!"
Cross reference comments under "Paragon Care Ltd (PGC)" on the ASX. I am back into EBO - seduced again.
Thanks, percy, for your comment on EBO on another thread!
I'm fairly bullish on EBO too. They have a track record of success over a long period now with a history of successful incremental growth, partly by taking over smaller competitors. Good also to see them selling off the "scientific" business which wasn't core business for EBO and seems to always struggle for profitability.
One of my better longer term holds!
Hi MacD
I am surprised no one has commented on yet another great result from EBO.
Also one of my long term holds.
Repaying debt
Increased Dividend
Very positive result all round.
Well managed and year on year deliver value to shareholders.
LEW
Yes I thought it was a great result.Having trouble with wife as she wants to get her hands on the increased divie.!!!!! I do not want to sell any although it is our largest share holding.Earnings will be down a little this year as a result of scientific business sale.Just loved"it was ready for significant growth"'quote.The foundations are in place in Aussie so I look forward to that market growing from 10% of turnover to being larger turnover than NZ.They never rush things but they always do it with the long term in mind.Can not see Mark Stewart being happy with 10% so would expect him to increase his holding.Peter Merton has helped EBO since joining the board.He is very clever with cash management.One of the woman directors really impressed me last year when she spoke at the AGM.She was responsible for brands at DB and it was her who developed the TUI brand and Henikin brand.Mark Stewart is also very astute and made sure Stewart family made a huge amount of money out of PDL sale,when former MD Don Sollitt and management would have given it away.MD Mark Waller knows exactly where{ and how }he is taking the company to.He makes sure he has the right people in place to achieve EBO goals.He replaced his long serving Aussie manager who was not up to the job.I look forward to this years' AGM,and note has been the same people at the meetings for a number of years,which I take to mean a lot of long term loyal shareholders.
MacD,
Here is a mad thought, following your post on SIP on the ASX thread.
IS there a possible match???????
This chart features Bullish and Bearish divergences. These occur when prices and oscillators move in different directions instead of in tandem as they usually do. See how every divergence presaged a significant "medium-term" reversal. (Though not every significant reversal is accompanied by a divergence.) Divergences provide excellent entry/exit signals for short-term traders and also mark good points for longer term investors to add to (or reduce) their holding should they wish to.
The 14 day RSI as used to provide short-term signals can also provide excellent medium/long term signals simply by increasing the period, in this case to 100 days.
A 200 day Moving Average is commonly used by long-term investors to keep them on the right side of major trends. Conservative indicators such as this and the 3 oscillators at the top of the chart are slow to get you into stocks and slow to get you out of them, but they are a lot less likely to flick you out of an ongoing uptrend on any transient weakness.
http://i602.photobucket.com/albums/t...sPB/EBO827.gif
Phardrus.thank you for the chart.I did not realise the SP had moved so close to the 200 day MA awhile ago.Over the years I have noticed there are periods of SP weakness for no apparant reason.I guess is it can be very thinly traded at times.
Intriguing thought, LEW, but I don't think so.
Two reasons spring to mind.
First, the sheer size difference with EBO's M/Cap at around NZD340m versus SIP at AUD530m.
Secondly, I doubt whether SIP's remaining business would generate sufficiently high profit margins to attract EBO.
It would be a huge leap for EBO, not clearly enough within their area of expertise I wouldn't think. Unlikely that they would change their strategy so abruptly after decades of gradual accretive growth.
A nice, quiet achiever, this one.
EBO up to $6.90 today.
I hold.
The AGM this afternoon was a very positive meeting.The special divie was a nice surprise.Mark Waller spoke of how small they are in Aussie and the growth prospects there.I think the chairman said watch this space.I will.They are very proud of their record .$1000 invested in 2000 now woth $5000.Have been doing some very good business in Fiji.Will be opening an office in Perth early next year.The Directors were looking to speak to shareholders which I take as a good sign.
Good to hear from the company that they have managed to keep operating through the Christchurch disaster, distributing essential hospital supplies etc.
EBO has been one of my bigger NZ holdings - and better performers - for longer than I care to remember. Better known as Early Bros in the "early" years, I was aware that their head office was originally in Cashel Street, one of the hardest hit parts of the city. Reassuring to be reminded that operations are now centred out of the CBD.
Their head office is a new building next door and overlooks Addington Raceway.I am not sure where the distribution centre in CH CH is.After the last quake they switched to their back up systems which I think are in Auckland.EBO largest footprint is in Auckland.Mark Waller spoke at length at the AGM about the importance of EBO to NZ's medical supply systems,and that they had backups for everything.
........And EBO have now announced increased turnover and NPAT for the half year.
All staff in ChCh are safe and the company can ensure continuity of supplies to the region.
was lucky to get some of the recent placement @$7.05 some big shareholders and a director selling down( a million or two). Hope this is not an ominous sign for the performance ahead.
Well todays result was another cracker.EPS up from 39.5cents to 45.4. And wait there's more;a nice 18cents per share divie..
It's been interesting, MHI, SKL and now EBO have all produced good results and their share prices have done nothing. Maybe EBO's down trend will reverse with this good result.
Yes, a good result.
The market's pre-occupied with events elsewhere just now, leaving some tempting buys around for those with spare funds!
EBO on the search for more acquisitions.
http://www.stuff.co.nz/business/5516...0m-acquisition
AGM this afternoon was well attended.Mark Waller [MD] spoke at length about EBO's position in NZ health market.Working with the govt and Pharmac to see health money is best spent.He felt too much is being wasted in non health staff wages,and should be spent in front line staff.Should only be 4 DHBs instead of the 16 or was it 18 we have at present.Huge amount of duplication.He thought Pharmac was doing a great job reducing the cost of pharmacies.One product in Aussie was $1.21 while Pharmac had got the price down to 8 cents.Those sort of savings make the health dollar go a lot further.Ageing populations world wide going to cause govts big problems. Have the cash for a large acquisition.Working on something at present.Nearly spent $80mil on a British manufacturer.Got a long way down the road,then woke up UK was to far away and had too many problems.[thank god they woke up]
Felt Aussie health may move more to NZ model over the next few years.With lots of changes/challenges coming up over the next few years Waller felt there would be plenty of opportunities for EBO.He said major multie nationals with leave Aussie as it is too expensive to manufacture there.This will add opportunities for EBO.
ChCh earthquakes have proved all EBO back up systems worked.
Was impressed by Waller thanking all warehouse staff who lost their homes coming to work to get EBO products out.
EBO even supplied a competitors orders to their customers.!!!!
Thanks for the update Percy. How do you see this company going forward, obviously looking to buy something. Great dividend growth over the last 10 years
Ebos have a record of 17 successful acqusitions.The next 10 years will see big changes in the health systems both here and Aussie .Ebos will benefit from these changes,because they are so good at delivering products to the markets on time.They have driven down costs.When the govt needs to drive out overhead costs,Ebos will be there ,working with the health providers,providing them with the materials. Ebos has a strong board,P Klauss and M stewart have large shareholdings.M Waller is a great leader.Ebos has a strong balance sheet. the next 10 years will provide Ebos with great opportunities.Exciting times ahead for the company and us shareholders.
Thanks Percy I will add this one to my list for my long term portfolio. Another great dividend growth share like ryman and mainfreight. Do not need to go overseas to find these.
All three companies share one vital ingredient.Passion.The board,the CEO, the CFO,have this infectious passion that goes through their whole companies.From the receptionist to the delivery driver,they love working for "their" company.Setbacks are seen as new challenges,change,new opportunities.Do they bring outside consultants?.No ,because the people who have the greatest knowledge of their business already work for them.
Percy any talk about if/when EBOS will have a secondary listing on the ASX? Waller mentioned it as a possibility a couple of years ago.
Having said that, i see that the Australian revenues really droppped off in FY11, presumably as a result of the sale of Scientific? Aus revenues now make up less than 10% of total revenues - I recall it previously being a far greater proportion.
No mention of secondary listing. Drop off was mainly Scientific.They have noticed a slow down in Australia.They are working on acquistions all the time,but the bigone they are close to I think we will find is in Australia.
First agm I have been to where all the talk has not been about Australia,except to say multinationals will no longer manufacture product in Aussie as costs are too high.They will therefore leave aussie which will open up opportunities for Ebos.They said they decided against UK manufacturer because UK was too far away and UK ecomony looked poor.I took that to mean they need to concentrate on Aussie. They felt Pharmac here had brought costs down and Aussie will have to move more to NZ model,which would open opportunities for EBO.EBO know they need a big expansion/acquisition in Aussie,but chairman Rick Christie said they did not want to buy anything cheap,and spend years fixing it up.They said selling scientific has proved correct.They said they are sitting on $100 mil cash and would not hesitate to come to shareholders if need be.
Go to www.stuff.co.nz and put ebos in search and there are articles on the meeting.
The chairman's , and the MD's ,and the slide show from the AGM have been posted on www.nzx.com website.Just enter ebo in search.
If distribution is their core business and capability suppose pet products not that much different from healthcare stuff .... but an interest in Animates is one stepfrom that core
Interesting
Next AGM some doggy biscuits for that dog of yours Percy .... oops did I mention dog on this thread ... of course not
What you think Percy
I sort of associated with a small business that buys things off Masterpet ..... have always been most impressed in the way they operate ... appear to be efficient ... and embraced on line stuff. Have also been through their Lower Hutt centre recently and that was pretty impressive as well
Disappoint those looking for an IPO eh
My initial reaction was one of surprise.Always concerned when a company leaves it's field of expertise.
However, on further thought I can see it as a good acquisition.I have two cats. I deal with Animates which I find a very good firm.
Mark Waller has at various times spoken of Ebos's very advanced distribution systems,and from that point I can see Ebos understanding this business very quickly.Dealing with vets should be similar as to dealing with Doctors.Ebos already deal with supermarkets,so know that area.The pet business is a very good business to be in,so I feel shareholder's [and their pets] are well positioned for the future.
It also gets them away from a govt funded business ,which may be a good thing.
At AGM chairman said they only wanted to buy a good business,so pleased to know you are impressed with Masterpet.
ps Hope I am making sense,but we are having queit a few large earth quakes which is unsettling me.
bugger about those quakes eh .... and just before Xmas and when people were thinking the worst was behind them
Was in Chch the week before last and the people i spoke to werefeeling a lot happier about life and now this
Thinking of you all .... take care
Thank you for your kind thoughts.
Trust you and all other sharetraders,and their families have a save and happy Xmas.
Percy.. Percy.. Percy...
What can one say .. Have learnt from your mails and appreciated your comments ..
S*&t.. .. My thoughts are with you and your neighbours.. Perc..
Easy to say.. as I shake my head in total un/in-comprehension as to what must be going through the thoughts of Cantabrians..
Bet it took your thoughts away from the quality of jerseys offered by ... WHO WAS IT ??..
" Just grab a couple of blankets and those water bottles "..,
Best wishes .. Perc.. For you all in Ch- Ch..
janner,
thank you,and all the best to you for Xmas.Very difficult for Chch,just when the city tries yet again to move forward,another big quake puts the brakes on progress.It is again the people in the eastern suburbs who suffer the most,how they cope beats me.
I like the acquisition, but it looks to me like it may make it more of a 2013 story. i.e. wait for a full year of impact and for costs (and associated debt) to become clearer.
I have value at $7 for now though, so it looks like okay buying at these prices ($6.55). However, longer term downtrend doesn't look exactly shattered at this point on latest acquisition news, so maybe wait and see.
Me thinks thy name should be Prudence Liz... :-))
On Masterpet: http://www.stuff.co.nz/business/indu...directors-link
EBO has seldom had its 'governance' questioned and this has been one of the factors why it is a respected company
Shame that this may not now be the case. This may just be noise but it does plant that seed of doubt in people minds ... don't punters hate related party things.
Somethign that Ebos needs to manage very well
That Masterrpet has pretty attractive margins compared to EBO's EBITDA margins eh ... good
One unknown is that the purchase price is $105m plus Masterpet debt .... wonder how much debt they have been loaded up .... could be interesting ..... maybe one day that will be disclosed
Never any problems there.
No problems when Peter Merton [PHB,EBO customer ] was there.The board of EBO is very strong.As regards to Mark Stewart's Ziwi Peak I see it as positive that Stewart has that experience.
The person who really surprised me was Sarah Ottrey.She spoke at one AGM giving her backround in brand marketing.She was reponsible for BD's Henekein launch and DB's Tui branding. Very clever woman.
Peter Klaus has been there since buying into EBO before 1990,and has always supported the company.
Elizabeth Coutts is an extemly experience director.
Chairman Rick Christie ex Rangatira CEO and again a director with a wealth of experience.
Barry Wallace,who I don't know is also very experience director.
From Rick Christies' comment in the article:
"Mark declared his interests as he would normally do in respect of Masterpet right from day one and as far as the board were concerned that was a matter for him to deal with and it wasn't regarded as a conflict ... I've got really nothing more to say about that. It's a different sort of a business. He's in the raw pet food business. The pet food sold by Masterpet and its subsidiaries is substantially manufactured food to dried food ingredients."
With all due respect to Rick Christie, it seems to me that there is at least a potential conflict of interest if, as the article suggests, the firm that he has an interest in, sells its raw pet food product to Masterpet. In those circumstances the approporiate action would be to not only declare the interest but also to abstain from taking part in making the decision.
Percy - not casting any aspersions on the Board - just saying they have had a pretty good 'governance' record up to now and need to be totally transparent with the market now this has come out.
Irrespefctive of the calming words from the company punters tend to make their own judgement eh
I note Rick Christie said Mark declared his interests as he would do in respect of masterpet right from day one.
I would then expect Mark Stewart would have told the board of his experiences in the pet food business.Stewart is one very clever man so I would expect the board would have been enlightened by his words of wisdom.!!!!!
Hopefully this was a misquote ""He's obviously a major shareholder but this was a board decision and it did have to go to shareholders. So Mark was just another director, really."
Surely he means it did NOT have to go to shareholders?? So Mark just gave his view as a director.
Unfortunately it happens all the time that major shareholders are canvased or given the heads up prior to a significant transaction, when in reality, it should be the board acting on behalf of their shareholders making the call, then taking it to a shareholders vote if required.
But strange for a chairman to blatantly publicly acknowldege that the major shareholders get a say in the decision yet there is no shareholder vote for minority shareholders to express their views?
[QUOTE=steve fleming;364572]
Surely he means it did NOT have to go to shareholders?? So Mark just gave his view as a director.
Agreed,after he told other members of the board he had an interest in Ziwi Peak ,who supply product to Animates.who in turn are half owned by Masrerpet.
I think it is very positive to have capable directors who have their own money invested in the business.In Mark Stewart's case he has always taken dividend reinvestment instead of cash dividends.There was a rumour when he brought in he would not sit on 10% for long and was expected to to want 20%. That has been unfounded ,however with divie reinvestment his stake has increased.
Also of interest is one of the owners/investors of Masterpet was "our old friend" Paul collins of Brierley Investments fame.
Of course it's a positive for directors to have a stake in companies in which they are their directors. That's not the issue here, rather it's one of a potential conflict of interests between those of the company that EBO was seeking to buy and one of its suppliers. Entirely hypothetical of course.Quote:
I think it is very positive to have capable directors who have their own money invested in the business.
Percy - not putting a halo around the chairman are you? .... maybe with rose tinted glasses?
Experienced director .... yes and no doubt about that. Probably pretty clever as well and no doubt the Queen will recognise him one day
But this does not always make the companies he is associated with successful or a great investment .....ask the ;ong suffering shareholders in THL or WFD
Maybe in Ebos's case it is the calibre of management rather than the Board ... interesting thought
No halo,I lost money on Advantage Corp.He would have had to use all of his experience when he recently had THREE major shareholders as directors.From Jamie Maddren days to present time EBO have always had a strong board.Even Philip Burdon rose to the chellange.!!
Calibre of management , Mark Waller's leadership,Experienced board,have driven the company.
There have been some very interesting postings since I put up the link re Masterpet yesterday! My tuppence worth:
Like others, I was surprised by Ebos’s recent acquisition, and despite wanting to top up my very small holding will now sit on the fence to see how the pet business folds into their human business.
Granted, the pet business is doing well in general atm, (Mark Waller said Masterpet was well positioned in one of the fastest growing global business sectors), but I have to wonder, given the current climate, how long that will last. I often drop in to our local Animates store with grandchildren, just to drool over puppies or kittens, and I notice a lot of shoppers (less over the last year) are buying pet trinkets, not staples. Even with the Animates club membership, I believe actual pet food can be bought more cheaply elsewhere, and for true pet lovers there is now an Auckland based vet with a website offering raw meat meals for pets, along similar lines to Ziwi, from what I can see. Possible competition down the track for Ziwi.
Having spoken with numerous people over the last two weeks and finding a great deal of them have spent far less this season than previously, it is obvious that spending is definitely tightening up, and this will likely affect what is spent on pets.
Nevertheless, Ebos has long been a very sound company, and as Macduffy noted back on 17.09.10: A nice, quiet achiever, this one. He also pointed out in that post: EBO up to $6.90 today.
So, today it sits at $6.55, not having shifted either way over the last few days, and I am wondering if other investors may well be doing what I am, fence sitting while this latest acquisition gets digested, and proven, or not.
Let’s hope that EBO continues to be that nice, quiet achiever.
I notice Animates web site is done by our "good friends" eastaronline.com ,no wonder it is excellent.
Well looks as though the market likes the Masterpet acquisition with the share price motoring through the $7 barrier pretty quickly.
I should have prefaced my previous post with "L plate still in place"!
Glad to be proved how little I know, and chuffed with the uphill climb.
With your well thought out and helpful posts Karen1 you have long since lost the right to preface your posts with "L plate."
What we did not know was whether the Masterpet acquisition would be seen by the market as positive or negative.If the market thought it was out left field and would not fit ,EBO share price would have lost ground.What has happened is the market likes the acquisition.I expect some brokers,fund managers etc have analysied it and rate it a buy.The buying depth would appear to confirm this.
The way analysts think ..... prior to announcement EBO was at about 7 times forecast EBITDA .... they say Masterpet will add another $20m EBITDA .... 7 times that is nearly $3 a share .... so shareprice heading to $9 when things become more official and the results start coming through .... pretty logical eh
Percy, thank you for the confidence boost. I guess it took a while for the market to "wake up" again after the break, given I posted on 5th January. I did wonder at the time if I was posting too soon.
If I'm not allowed to keep the L plate, can I just be the eternal newbie?
Steady result out to-day.No surprises there.! 13.5cents per share fully imputated divie, always nice.What I was looking for was the outlook statement.Very positive,so I am happy.Divie reinvestment not avaliable with this divie.
Percy ... yep a solid enough result
One of the missing numbers out the Masterpet acquisition ann was how much Masterpet they were to take on .... remember it was $100m odd PLUS Masterpet debt
That number was $30m and along with the extra borrowings to fund the purchase I note that debt is now $145m - $88m more than last June
So to justify this they need to make at least $15m EBIT from Masterpet .... might be a bit of a stretch if they say EBITDA is $20m .... fail to get this implies acquisition not really value accretive .... wonder what analysts will say about this
Masterpet is a good business .... hope EBO make a go of it and the likes of Percy will still be happy .... check back in a years time
Would appear EBO have made a fair purchase of Masterpet.It is interesting to note in EBO announcement today in "out look" that they intend to make further aquisitions in both EBO and Masterpet.Should they be able to add to Masterpet as they have done with EBO,Masterpet will go from a fair buy to an excellent buy.At this stage I have no reason to believe that their over 20 year record of successful aquisitions should come to an end.What I have been looking forward to is further expansion in Aussie.I did note that they said they were doing well with their "new' Perth branch.
Plenty for analysts to ponder,and shareholders to look forward to.
Was this their expected EBITDA number at the time of the acquisition?Quote:
So to justify this they need to make at least $15m EBIT from Masterpet .... might be a bit of a stretch if they say EBITDA is $20m .... fail to get this implies acquisition not really value accretive .... wonder what analysts will say about this
This what they said ehrn they announced the purchase -
EBOS has always set exacting criteria in our pursuit of growth either organic or acquired. We expect Masterpet will contribute very positively to the enlarged group and add to our growth in earnings per share.”
EBOS is projecting a revenue contribution of ~NZ$170m and EBITDA of ~NZ$20m in first full year to 30 June 2013. These earnings projections are inclusive of the Masterpet half-share of Animates, if consolidated
Thanks, winner.
Let's hope that they got a friendly rate on that bank loan!
Must have as headline in today's The press;Ebos looking to buy-again.
Waller said that in terms of potential acquisitions ,the group was prepared to spend up to $100m on a human healthcare sector acquisition,-"if the right opportunity came along".
Ebos was in a preliminary investigation on one possible purchase,and would also like to investigate three or four Australian animal health opportunities as discussed in its board meeting yesterday.
"This market segment is growing internationally [and] the Masterpet acquisition will be a significant profit driver going forward." Waller said.
Can anyone shed some light on why ebos' sp is going down so rapidly today?
Often EBO is thinly traded.Over the last few months there have been more buyers than sellers.The announcement contained statements that would have caused concern,so there are now more sellers than buyers.
Those statements;"particularly against a background of ongoing reform and tight budgets in public heathcare and a difficult economic enviroment."
In Australia " "real" economy is finding the going tough."
As a person who has invested in EBO for over 20 years these statements are not new,and EBO has always been able to take advantage of fast changing markets.For years people have said EBO will find it difficult if they loose this agency or that agency, hospital boards will go direct to the manufacturer,Australians will not deal with New Zealanders,they are too reliant on orthopedic business,loss of dental business will affect the whole business,the currency is working against them,dealing with supermarkets is madness etc.However EBO has gone from a $2m capital company to what it is today.I suppose I get in divie a year what my original shares cost.
I have read the announcement and to-days article in "The Press" and know from experience Mark Waller delivers on what he says he will do.
Over the years I have noted when EBO's PE gets above 15 you know share price is getting high.When PE drops below 13 seems to be getting undervalued.
Your market cap does not grow from $2 or $2.5mil to over $350 mil in just over 20years unless you have a record of success.EBO has this record.
ebos has been a great company for dividend growth,there are not many better, sparkytheclown I would be interested to know who you think long term offers better capital gain?
I'm sticking with this view on being a 2013 story for now. Also sticking with $7 valuation and prefer waiting for next report before considering buying.
Given the $20m EBITDA forecast provided was for FY 2013, there remains the possibility that it is dependent on some degree of integration/savings. Therefore a reasonable chance the next result could leave some question marks - firstly over whether they will achieve the Masterpet/Animates forecast and perhaps secondly, around the continuing contribution from healthcare (since it seems to be entering a weaker phase).
Signalled further acquisitions are probably not a positive this half, as would imply further increases in debt against a risk of EBIT weakness in the period. For now, the value of debt is not concerning, but knocks a couple of $'s off the s.p. if investors start worrying they have over-reached.
For whats it worth a bit of a report I wrote to the trustee and investment manager of my family trust -
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EBO has been a solid performer for many years
Mainly through acquisitions it has grown EBIT from $6m in 2003 to $23m in 2011 and heading for $30m this year
In that time shareholder funds have increased from $45m to $200m (there has been a couple of capital raisings)
EBO is one of the few companies in NZ who consistently earns more than it cost of capital - ie makes an economic profit on the total invested (equity and debt) capital in the company. Since 2003 EBO has averaged about $4m pa of economic profit
Real analysts don't care too much about earnings multiples etc. They get to the guts of the business and assess its real value from how much economic profit it makes and what that means in value terms. A common measure is Market Value Added (market cap less equity) which is how much value the market has added to shareholders funds. This MVA is the present value of all future economic profit flows
At the moment EBO market cap is about $360m, therefore the MVA of EBO is about $160m (bloody fantastic)
As EBO has grown it has needed more and more capital (both debt and shareholder funds). Since 2003 total invested capital has increased from $54m to $256m at June 2011 and with the new debt heading towards $350m by June 2012.
This increasing capital has driven increasing profits (bit of struggle the last year or so) but has not driven increased economic profit (ie a declining ROIC). ROIC in 2011 ws just under 10% - which is greater than the 8.6% cost of capital that PWC calculate. Economic Profit in 2011 was ~$2m. A generous forecast for this year including Masterpet for 6 months is say $3m. Slightly below the recent average but about where EBO economic profit has been over the last 8 years
Remember MVA is the present value of future economic profit streams - in EBO case this is about $40m which gives an implied market cap of $240m (current $360m)a
Without getting too detailed in the maths one way of looking at it is taking the MVA at any particular time as a multiple of the Economic Profit (EP) at that time. For EBO a multiple of 14 (based on its cost of capital) seems appropriate.
The chart attached shows EBO share price over the years with the EP multiples noted.
To get excessive long term returns one needs to buy when shares are 'undervalued' - makes sense eh. Through to 2007 EBO was 'fairly' valued and the share price increased as economic profits increased - over that time EBO was increasing EP nicely because they were making heaps more profit on less than heaps more capital.
Total capital increased significantly in 2007 and since then profits have grown but less than the rate that capital requirements have (although more than covering that cost of capital). This has seen that EP multiplier increase substantially - implying EBO is significantly 'over valued' at the moment
See the EP multiplier dropped to 7 when the shareprice collapsed (and its MVA) because of the GFC - that was the time to buy to make excessive long term returns - EBO was 'cheap"
In summary the current shareprice of EBO has an enormous amount of growth built into it - even before the market knew about Masterpet. On current and projected performance its MVA (and thus its market cap) is about $100m too much which implies a realistic value of $5 odd
All that implied growth may eventuate but bear in mind that the market has never had such growth built in the shareprice in the past. Today is not a good time to buy EBO shares if one wants excessive / above average long term returns - even if you a true believer
EBO will no doubt continue to perform well and grow its reported bottom line and continue to earn more than its cost of capital and eventually the market will settle on a price which really reflects the economics of EBO's business but I think that future price will bring long term returns we are after
Thank you winner69 and Lizard for your well thought out,and wise posts.
I must admit I have always got EBO selling a bit wrong.It has been my largest holding for awhile now,and every time I have sold off a few it has gone up.!!!!! Now scared to sell off any more.!!!!
No cash .... funny we always seem to be on the same wavelength and never seem to disagree or argue .... except as a trustee he likes to file so he can check back on the decision making process etc .... in this case the recommendation was to wait until there was more value in EBO so we need to review it every so often .... it is hard talking to myself at times though
ANother EBO chart from the report is quite interesting - investment (equity + Debt) v economic profit ..... note the investment is the avergae over the year so it esentially shows only a half year of the new debt .... and thus heading to the top of the page if they don't pay some back. Chart sort of says EBO not really creating riches from their acquisitions
The PNZ acqusition was high volume low margin business.
It will be most important that future aqusitions are higher margins.
I see EBO have the distribution channels to add more profitable add ons to both human and animal health businesses.
When looking forward one must judge the company's history of success.EBO passes this test.
"You are better to pay a fair price for a good business they a good price for a fair business."