Above posted a week ago.
Well that did not happen.?
Big surprise?
Share price today $2.44.
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I’ve told the neighbour to stop asking for the next big thing.
I just said to him to get his bowling mates to follow what a guy called percy does on Sharetrader.co.nz
He showed me his phone and sure enough sharetrader.co.nz is on his favourites bar.
Hope he now leaves me in peace about ‘investing’ but I fear that means he’ll rave on about Jacinda more.
Percy, do you look at the basic TA to decide when to buy or what price are you willing to pay for it?. I remember a few years ago there was an article I think in NBR stating that SKL was a kind of forgotten company by the market (as I can't remember maybe I'm wrong). Since then was in my watch list but I never progressed with reading more about it. So I ask you this because following the recommendations from KW post about using TA right now looks, even better when you bought it, however now looks at the highest peak in the last 5 years.
TA is a helpful tool,however I used FA to decide to buy SKL.Was pleased when I did look at their chart and saw my timing was pretty lucky.
SKL I have owned previously.
They had a habit of over promising .
SKL has remained on my watch list.So I know the company reasonably well.Impressed Lizz Coutts is chair.The announcements over the past year or more told me the company is in good shape,focussed and carrying little debt,and has the capacity to pay increasing dividends.
SUM agm gave me a big wake up call.My thinking that the property market had little affect on the retirement sector was wrong.So I sold my total holding in OCA.So I had money to sit on or invest.
I went back to SKL. Their earnings are mostly overseas.Therefore the low interest rates in NZ meaning a lower NZ $ would work in SKL's favour.
Price under $2.20 did not look too dear, as I saw their PE ratio was 14.5 and I expected their eps growth rate would work out between 10% and 18%.
PE ratio today is 16.13 at sp $2.42,so still reasonable value considering all the above points.
Lets not get ahead of ourselves here. Its all about context. I had a few in 2012 bought for 1.55. If I had sold @2.42 it would of been a CAGR of 7.2% hardly interesting. Maybe overall a CAGR 10% incl divs. My actual exit position was 2.18 in February for CAGR 5.65%. Glad I sold there's much more exciting stuff. Made 50% on APT in 3 months...
Its all about timing not back slapping for a small gain this year. Remember to DYOR on why the SP is rising, will this continue due to an amazing market opportunity or is it a basic revaluation? Based on their past history I am favouring the latter.
Always appreciate your thoughts Percy.
As you say they have a history of overpromising. Price is looking steep for what you get.
considering its high payout ratio the yield at its current price is unimpressive
Correction.
What I actually posted was they HAD a habit of over promising.
I think that stopped when Liz Coutts became chair.
Yes payout ratio is around 80%,which is OK considering they carry little debt.
Gross yield 6% and 50% imputed is satisfactory.FY18 11cps....FY19. 13cps and FY 20. 14 cps according to Craigs projections.
ROE of over 17% is good.
Their forward looking plans are now sitting very nicely with what I like....in past years, nothing much happened, but now it looks like it has changed. I bought back in during August last year and then added a larger holding in January. I am certainly hoping that they have become more forward looking. Coupled with the low exchange rate, and the current low interest rates, the share price was nicely undervalued in January (when everyone was running scared) and I think still has a little room to move using the current year's annual report. I am hoping that they have "grown-up" now. Mind you, I like industrials that are innovative and also service today's needs (because they make money now).
It is worth reading that report.
Not in my book it's not satisfactory, I don't do satisfactory, I'd rather keep the hold on OCA in the meantime (that's what you sold I think, to make this switch, taking into account trading fees which few ever disclose or even acknowledge) doing well on OCA vs accepting a mediocre x% after tax on SKL that looks fully priced. Each to their own, I think some long term investment ideals might be beguiled by some short term trading instincts. Switch and bait is an age old tactic. It takes time to settle into a truely long term returns investment portfolio that we don't feel tempted to fiddle with, at least it does for me, but SKL isn't a part of it at this stage, may never be, who knows. It needs to compete, which imo it isn't right now.
The only time SKL has been good value IMO the last few years was when it was 1.15 in I believe it was 2016.
I can understand your reasoning for not holding OCA, I’m not a fan.
I f you’re looking for a place to put your funds I recommend briscoes at 3.30
pe 11.5
yield of 8.45%
roe last year 23% and 5 year average even higher
always under promises and over delivers
consistently growing divs
low debt
plenty of cash in the bank