FBU - Fletcher Building

[Lease]

I think the market is too pessimistic on FBU. Last year it made huge loss and SP was $5.5 at lowest. This year, though the results aren't impressed, it has turned to make profit anyway. But now SP is only $4.43, almost 20% off the last year low of the company's worst result in 15 years.

I personally think market is overreacted.

[BlackPeter]

I think the market is too pessimistic on FBU. Last year it made huge loss and SP was $5.5 at lowest. This year, though the results aren't impressed, it has turned to make profit anyway. But now SP is only $4.43, almost 20% off the last year low of the company's worst result in 15 years.

I personally think market is overreacted.

Market is forward looking. Still not all skeletons uncovered and construction activity more likely to drop ...

[Lease]

Market is forward looking. Still not all skeletons uncovered and construction activity more likely to drop ...

FBU made loss nearly $200M last year. Do you think it will make worse result? Even it still has a few issues(particularly Aussie operation).

At least I don't think so. Given it had capital raising last year, the balance sheet is much stronger and it has dumped Formica. The construction activity drop is cyclical and it will turn to high again.

[percy]

I would have thought the $300 mil would have been needed to finance the overpriced units they are building in ChCh.
Building,building,building,not selling,build more,still not selling,build more some one will buy them,build more,still not selling.Judgement day will cost FBU sharholders plenty.Bottom line;more wealth destroyed.

They ae still building them.
They are still not selling.

[BlackPeter]

FBU made loss nearly $200M last year. Do you think it will make worse result? Even it still has a few issues(particularly Aussie operation).

At least I don't think so. Given it had capital raising last year, the balance sheet is much stronger and it has dumped Formica. The construction activity drop is cyclical and it will turn to high again.

Even if we believe the optimistic analyst forecasts - a forward PE of 13 (backward PE 13.5) with Zero growth is not cheap. Board and Management did prove over the past handful of years their incompetence beyond reasonable doubt ... and the TA looks terrible.

But absolutely - markets work only if people disagree on value - feel free to back up the truck ... (just for clarity - this is not a recommendation );

Personally I prefer to stick with the words of a respected (Ex-) poster "never drink and buy in a downtrend ...."

[Lease]

Even if we believe the optimistic analyst forecasts - a forward PE of 13 (backward PE 13.5) with Zero growth is not cheap. Board and Management did prove over the past handful of years their incompetence beyond reasonable doubt ... and the TA looks terrible.

But absolutely - markets work only if people disagree on value - feel free to back up the truck ... (just for clarity - this is not a recommendation );

Personally I prefer to stick with the words of a respected (Ex-) poster "never drink and buy in a downtrend ...."

Forward PE of 13 is lower than their low-end average PE over the past 10 years(seems I can't attach spreadsheet here, otherwise I can show you my calculation). So at current SP, FBU do provide value, I reckon.

[winner69]

Forward PE of 13 is lower than their low-end average PE over the past 10 years(seems I can't attach spreadsheet here, otherwise I can show you my calculation). So at current SP, FBU do provide value, I reckon.

Boral BLD.ASX often a good guide as to what a reasonable multiple for FBU is. Over the years BLD generally has had a higher PE than FBU

BLD currently are on PE of 10 (current EPS) with an outlook of earnings being 5%-15% less in F20


I reckon a PE of 13 for FBU a bit rich

[Lease]

Boral BLD.ASX often a good guide as to what a reasonable multiple for FBU is

They are on PE of 10 (current EPS) with an outlook of earnings being 5%-15% less in F20


I reckon a PE of 13 for FBU a bit rich

FBU average PE range from 14 to 20 over the past 10 years.

[Beagle]

I agree its absolutely ridiculous. Someone listened into the conference call, (sorry forgot who) and said analysts were like pet pussy cats with management or words to that effect. too scared to ask searching questions. FCNZ put out a research note after the most recent downgrade many months back calling fair value at what I considered an absurd amount of $9.20 from memory. On the other hand I opinioned how I couldn't see any reason why anyone would pay more than $5 and went on to say at that time this wouldn't be the last write-down in that division by any stretch of the imagination....
We can really "rely" on their latest write-down guess can't we...because their other guesses have been so full and final and so "accurate" lol.
What a sad and pathetic situation.

Post #73 in February 2018 with the SP at ~ $7.70 and called them as being worth less than $5 when the so called experts valued them at $9.20. FBU the gift that keeps on giving for those that are short.FBUchart.jpg
No growth companies in this environment with ultra low interest rates are worth a PE of about 10-11 but I believe there is more and more carnage and wealth destruction to come from this hopelessly mismanaged and poorly governed company and plenty more skeletons in the closet so they are very probably still an excellent stock to short.
In addition directors and senior management are still being paid like the good times are set to start rolling again so you have to wonder if there isn't layer upon layer upon layer of senior management, middle management, project managers and others who are being grossly overpaid for their truly inept performance.

[winner69]

FBU average PE range from 14 to 20 over the past 10 years.

BLD has ranged from high 20s to 16 (in 2018) and is now only 10

Probably performed better than FBU but market outlook pretty dismal for both

I reckon FBU at a PE if 13 is not value

But don’t let me talk you out of thinking so.