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  1. #16
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    If you factor in the rights issue then WDT appear to have been in an uptrend since early Nov, hence my earlier comment about a 20% gain since then. Perhaps a TA expert can comment. My even earlier comment on another thread about it dropping after the rights issue could also be about to come true, as the price does seem to have stalled recently.

    Although I haven't seen an announcement, it appears as though extra shares of about 8% of the rights were available to those that applied e.g. pre-issue holding of 4000, rights of 1000, extras ~80.

  2. #17
    Junior Member
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    Unhappy wdt

    6.0 mil loss, new order of 400.000 units and more to come. When will wdt become profitable
    Bosse

  3. #18
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    A quote from WDT's Media Release today puts their latest order for 400,000 motors in perspective.

    "The Company delivered in excess of 350,000 motors in the 12 months to end June 2007, a 75% increase on prior year. We have now shipped over 700,000
    motors in aggregate, and we expect to ship our millionth motor during the
    2007 calendar year."

    So, this one order, assuming it is completed, comprises 36% of WDT's total output up to June 2007.

    There was also a "Total Integration" order form another US company for "a common appliance that is used in many households, offices and light commercial premises in the United States and worldwide." Confidentiality cloaks this order in secrecy but it sounds like air conditioning or air extraction.

    Quite a big jump in production due this year then. A good start but can they deliver? If they can, the numbers should make more interesting reading next year.

    This bottom feeder is fat and happy to hold.

  4. #19
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    Previous thread can be viewed here, since it doesn't seem to have made it across.

    I'd like to repeat my earlier note here - that my rough calcs suggest they need to be selling 10m units per year within 3-4 years to be worth current price and would have to do this without raising any new capital.

    Of course that's just the long term view. Sentiment can take it anywhere between now and then.

  5. #20
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    I think it is pretty clear where sentiment is taking WDT, Liz.
    Short-term, medium-term, long-term, makes little difference.

    It appears that the market agrees with your valuation.

  6. #21
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    Te Puke, , New Zealand.
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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.

  7. #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?

  8. #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?

  9. #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.

  10. #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!

  11. #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?

  12. #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.

  13. #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!

  14. #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

  15. #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 :-


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