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  1. #21
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    I am actually going to get back in to WDT. I know Phadreaus and I have disagreed about this for many years and he is usually right but the momentum is building on the sales front and in I think this may be a good time to buy. Market sentiment is down and I am able to move in. Will invest some MHI profits here. Point taken about needing to sell 10mill units to justify shareprice but that is about 3 orders from 3 decent size manufactures and could happen in the next 2 years. One is on the cards and once one does then everyone has too. You will be bleeding market share if your fridge and washing machine are 3 times as expensive to run but cost the same.

  2. #22
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    If you have decided that you really do want to buy WDT, Nevl, now could be a good time. Why? Because WDT is just above the previous support level of 30 cents. (Support is often found at round figures) Technically this would be classed as a low-risk entry point.
    The usual practice here would be to have a strict Stoploss in place at say 28 - 29 cents. A Close below this would trigger an exit and you would have lost only a small amount should the current downtrend continue. Hence the "low" risk.
    A trend-follower would wait for an uptrend before buying. This would take a Close of above 36 cents. Each to his own eh?

  3. #23
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    if anything was going to signal a change in fortune something like this would be it. THe volumes Lizard suggested to be neccesary for current value to be justified are astounding: still maybe its a share just gone from total dog to not-so-awful?

  4. #24
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    Actually, price has fallen away from 40cps (equivalent pre-rights) to 31cps since I wrote that original post. I also assumed an investor would want a return of at least 25% pa over 4 years to be bothered investing right now. So it's not as bad as it looks - though I'd be surprised if they can get there without raising new capital!

    If it helps, $30 revenue/unit, 10m units, $300m/yr revenue, price/sales=1 (this is based on typical mid-cycle manufacturing and currently compares favourably with companies like FPA or SKL - however, optimists might like to pick higher!), $300m market cap in 4 years time or $1/share - so 25%pa off a price of around 40cps. At 31cps, you can drop the figure down to sales of about 8m units per year in 4 years time.

    Sometimes it is the point where a company starts to achieve real commercial viability where the investment dream fails for a while. Reality bites and the market becomes impatient for profits, while a company raises unexpectedly large amounts of new equity to fund working capital. This is where sentiment has a huge bearing on fundamentals, as the lower the share price goes, the more dilution existing shareholders get hit with... somewhat circular. A few good companies with savvy management are able to handle this stage very well and build confidence at the right time. Most struggle. Picking the right time to buy in for the confidence surge when investors regain their faith is not easy - especially in NZ where more than likely Fisher Funds or private equity will be standing by to take a major stake at the semi-final (cheapest) placement.

  5. #25
    Member KiwiBear's Avatar
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    Unhappy Woof woof

    I remember a few years back people justifying how an Ashburton meat coy was doing well and throwing good money after bad.
    Then when they were in the big downtrend, work collegues jumped in to buy so called bargains @ 15c only to see them furthur decline to 5c then more people jumped in for greed justifying to themselves "it can't go much lower their still producing top quality export meat"!
    After being burnt by the Jones, Judges, Hawkins, etc after the 87 crash and the Later IT capital & RMG, by brokers recommendations
    of bottom end bargains! Well the rest is history, but a lesson well learnt!!!
    I have to concurr with my fellow TA man Phaedrus, wait for the uptrend for confirmation, as a knife falls faster than a balloon with good news rises!

  6. #26
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    WDT is up 19% today. Would experienced investors view this as a sell opportunity in the expectaton of picking up the shares again at a more "realistic" level later?

  7. #27
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    Closed at 37c. Phaedrus - what do you make of this, given that you suggested earlier that a close of 36c could be significant? Thoughts appreciated.

  8. #28
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    You could call WDT speculative, but you most certainly could not call it a dog. You could say it was expensive, but who knows, that is afterall just a matter of opinion. There does seem to be plenty of investors willing to pay well north of 30c. Me, I think this is a great little Kiwi company that is just starting to wind-up. Zigzag is willing to give it a go!

  9. #29
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    Phaedrus. I think your chart needs correcting for the rights issue. Sudden drop from 51 to 39c in May corresponds to this issue. See below. Might make it look more of a sideways trend. since then

    I have halved my exposure to WDT mainly due to the current climate taking your "caution advice" as I was too exposed to the NZ market but still believe in the long term principle that motors that save electricity are worth a punt. Will hold the remaining 50% and top up when WDT starts trending up.

    Quotation Notice Renounceable Rights (WDTRE)

    Further Quotation
    Company Name: Wellington Drive Technologies Limited
    Prospectus Dated: Proposed to be registered with the registrar of
    companies on 17 May
    Details of Security to be Quoted: One for Three Renounceable Rights
    Issue of up to 76,520,232 Ordinary Shares at NZ 10 cents each
    Ratio: 1:3
    Issue Price: $0.10 per Ordinary Share
    Payable: Payable in full upon application
    Dividend Ranking: Pari passu with existing Ordinary Shares
    Record Date 5 pm: 18 May 2007
    Commence Quoting Rights and Existing ordinary shares quoted "ex-rights" on
    the NZX 21 May 2007

    Hold ADY FPH NZO WDT LYC TPW NWF KFLWA

  10. #30
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    Default Corrected Chart.

    Thanks for that Treetops. It is painfully obvious that WDT is not a stock that I follow! Here is the corrected chart :-


  11. #31
    Member glennj's Avatar
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    Question

    Quote Originally Posted by zigzag View Post
    You could call WDT speculative, but you most certainly could not call it a dog. You could say it was expensive, but who knows, that is afterall just a matter of opinion. There does seem to be plenty of investors willing to pay well north of 30c. Me, I think this is a great little Kiwi company that is just starting to wind-up. Zigzag is willing to give it a go!
    I'm prepared to call it a dog because that is how it has performed. I've watched it quite closely since Jan 2005 & done some research. Result is I didn't buy. If I had bought and then sold rather than taken up the rights issues my annualised return would have been minus 13.5%
    Maybe it won't be a dog sometime in the future? Currently it is speculative as you state. Looking from a fundy viewpoint they are making little progress. I'll keep watching and may climb aboard when/if profitability, margins, ps ratios etc show that there is more than hype there.

  12. #32
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    Default Another Cock-up!

    Quote Originally Posted by Nigel View Post
    Closed at 37c. Phaedrus - what do you make of this, given that you suggested earlier that a close of 36c could be significant? Thoughts appreciated.
    Nigel, I don't know what I was talking about. WDT has essentially been going sideways in a trading range all this year (plus last year, really). There is little point in looking for, or commenting on, trends lying within this trading range. If you have made an entry just above a recent support level, you have done as much as you can to profit from this stock.

  13. #33
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    Not to worry Phaedrus Your efforts are much appreciated as always. WDT attracted me because I have a tendency to let Green concepts sway me like saving electricity. In the water crisis back in 92 30s showers were achieved in our household! Anyway I can't see electricity getting cheaper and the shift to "green" might just make me a profit with WDT one day. I'm also stoically an NZ supporter and can't resist backing NZ companies with something special if the price is right. Appreciate your comments
    glennj and can't help but agree its a dog looking at the charts but you obviously see potential or you wouldn't track it. I wonder if I'll see a profit as some overseas manufacturer will see this and snap it up before it reaches critical mass.

  14. #34
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    I would go a stage further than SectorSurfa and say that WDT have a policy of pushing misinformation to the media in the form of "breakthroughs" that invariably turn into fizzers. Our HB Today carried a story of quite a few inches about a breakthrough that was exactly the same message that they have been flogging for years - since Strathmore dumped the company on its shareholders nearly seven years ago. It ran up around 70cps for a time then.

  15. #35
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    Default Woof woof

    Every dog has its day.

  16. #36
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    Phaedrus, did you adjust your graph for the cash issue in Nov 05? I suspect not. 1:4, I think it may have been at 10c, but I'm not sure.

    Glennj, going back to your example, presumably you wouldn't have bought in Jan 05 when it started a down trend. If you'd instead bought in late 05 when it got into an uptrend you'd now be sitting on a gain of about 50% if you were still holding. You may have even bailed a year ago for the same gain.

  17. #37
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    Default Correction

    Thanks KoOE, not another one! I have made the 4 cent correction and here is the amended chart. Not much different, but worth fixing eh?

  18. #38
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    Once again this dog brings home a bone to the press assn or whoever and they pat his head and show everyone the bone! Last nights HB Today has quarter of a page and a large photograph devoted to the company and their breakthrough into the US market and the huge increase in production that will be needed etc. Surely this is fraud or dishonesty of one sort or another?

  19. #39
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    Hi Belgarion

    No, I'm not holding at the moment. Still keeping an eye on this one though - pleased to see quite a few people are still very positive about it.

  20. #40
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    Quote Originally Posted by craic View Post
    Last nights HB Today has quarter of a page and a large photograph devoted to the company and their breakthrough into the US market and the huge increase in production that will be needed etc. Surely this is fraud or dishonesty of one sort or another?
    How is this "fraud or dishonesty? Of course Ross Green is going to publicise what he sees as a major breakthrough for WDT. Isn't that part of his job? Their recent capital raising was set at 10c, around a quarter of the then SP. Normally companies milk their shareholders when the SP is high. Is it odd that WDT didn't? Maybe, but is it fraud or dishonesty? I think not.

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