FBU - Fletcher Building

[Shareguy]

My average cost was $2.80 as I sold some years ago at a good profit . I just wish I had sold them all years ago. Just don’t have faith in the management to turn it around.

[BlackPeter]

Another disappointing result. After further write downs on legacy projects and others I have no faith in the $2 billion of future work that the building division has on their books. To me there is too much risk that things will get even worse. For that reason after 15 years sold all my shares yesterday in this company and will not buy back.

Agree. Big company with a track record of delivering disastrous results in good times and disappointing results in bad times. Board seems to be a collection of strong underperformers with strong egos. Tend to make disastrous decisions when times are good (like buying Formica or getting rid of their project management) and below average decisions when times are bad. Calling their current balance sheet (with liabilities to assets of 60%) "strong" (as they do in the report) is laughable. Sure - could still be worse and they are likely to stay around for some more time as a going concern ... but strong?

Not quite sure why I still watch them ... I guess everything coming from the old Fletchers empire seems to be cursed and trainwrecks tend to fascinate me. As well - they say every dog has its day, and in these situations FBU seems to be strongly hype driven. They used to have a really high PE still some years ago, people thought this is a growth company. Actually - just noticing that its (2020 - 2023 forecasts) forward PE is still quite high. Around 30. Maybe the FBU hype still works?

Anyway - there might be at some stage another opportunity for riding the hype, but if I look at their predictions (market down in FY21 by 20 to 25%) I recon it is not now. On the other hand - hype does not need excuses :

[peat]

Not quite sure why I still watch them ...

Was feeling the same but there are reasons. It is a kind of stalwart Kiwi old-school business and , in the building industry which comprises a lot of the smaller businesses in NZ as tradies, so it could reflect the overall mood well. As an ex blue-chip it will still be in a lot of legacy portfolios esp index based ones. For me personally though, its because I've worked inside the organisation and know several people who supply them and so it all adds to the feel for the NZ business scene.

[Checkmate]

Latest disclosure from perpetual limited shows they increased holdings by approx 9million shares. Now own around 82.2million shares. That’s a good sign���� http://nzx-prod-s7fsd7f98s.s3-websit...755/329430.pdf

[BlackPeter]

Latest disclosure from perpetual limited shows they increased holdings by approx 9million shares. Now own around 82.2million shares. That’s a good sign���� http://nzx-prod-s7fsd7f98s.s3-websit...755/329430.pdf

.... only if they have a good investment track record : I guess - fair enough, that's what they say, but is it true?

On the other hand ... the big boys have a tough life ... only sensible way for big funds to take a big position is during a downtrend.

[Checkmate]

Any other ideas why Fletcher has been on a mini growth spurt?

[winner69]

Any other ideas why Fletcher has been on a mini growth spurt?

Spring helps

[Scrunch]

Any other ideas why Fletcher has been on a mini growth spurt?

Three guesses include:
1. Marketscreener indicates 11 brokers are covering FBU. Until recently only one of the 11 has had a buy recommendation but around mid-late August a 2nd broker has flipped up one notch from "Outperform" to "Buy". Some of the recent strength could be the this broker spreading their revised thinking to clients.

2. Growth stocks have done very well lately so there may be some switching into value. The price going up not down could be some of this switch money finding its way into FBU.
https://www.bnnbloomberg.ca/video/th...eniger~1832510

3. Estimating that some of the money the government is tossing out left, right and centre will find its way to FBU so the future demand is less bleak than earlier thinking

[BlackPeter]

Any other ideas why Fletcher has been on a mini growth spurt?

Bit early to call this the next summer (or even spring shootings), isn't it? FBU is (so far) in an unbroken downtrend:

Attachment 11910

One ripple does not make a trend change ...

But even if it might go higher ... don't read too much into share price jitter. Never understood the motions of Cryptocurrency - or more recently Hertz or e.g. AIR on the NZX. Its often just the psychology of mass hysteria ...

Just a friendly Novemberday (or better in our hemisphere Mayday). Winter still advancing.

[Timesurfer]

Morningstar have upgraded to an accumulate status - might see an upkick for investors today