SCT - Scott Tech

[duncan macgregor]

[QUOTE=Snoopy

This thread starts with 'out to lunch' suggesting SCT was a 'screaming buy' at somewhere near $3 on 30/04/2004. Yet now the share price has retreated to a '$1.82 buy and $1.85 sell' spread, this same share barely gets a mention on this forum. For those who like the FA statistics $1.82 today represents an historic PE of 15. That is greater than the 12.5 PE when SCT was regarded as a 'screaming buy' at $3 two and a half years ago. Consequently I don't think SCT is a 'screaming buy' at close to $2. I am buying more for portfolio rebalancing purposes. But if you believe that exporting from NZ has any future then I think SCT is worth accumulating at around this $2 level.
Kilpatrick selling out of 170,000 odd shares during 2007 has worked well for me because I have been buying SCT shares in trickles all year - boosting my own holding in this company by something like 80% in the process. My average purchase price of these 'new' shares was $2.07. That doesn't look very clever if you consider the current buy price is $1.82. But that is assuming that I could have bought the number of shares I did buy at 'todays price' of $1.82. And that would not have been possible. It also ignores the dividends that I have accumulated during the year, which makes my 'theoretical loss' (it was a 'theoretical profit' two weeks ago) much less painful. I know that I couldn't have bought my shares at $1.82 because it has taken over a month for me to buy my 'November tranche', a very modest number of shares on market at a price around $2.

So when do I expect my profit margin on my latest SCT acquisition to rise into the black again? I have no idea. But I am prepared to wait. And if the market weakens further I am prepared to buy more shares in the interim. I don't know if buying SCT shares at $2ish today will look clever in two and one half years time or not. But I think it is more likely to look clever than buying SCT at $3 looks now, viewed with two and one half years of hindsight.

SNOOPY

discl: hold SCT[/QUOTE] A good lesson to be learned here about the worth of fundamental analysis without having any sell strategy when it all turns to custard. Needless to say most TA investors are sitting the market out watching the slaughter. Plenty of opportunity to average down in this market SNOOPY. Macdunk

[Snoopy]

A good lesson to be learned here about the worth of fundamental analysis without having any sell strategy when it all turns to custard. Needless to say most TA investors are sitting the market out watching the slaughter. Plenty of opportunity to average down in this market SNOOPY. Macdunk

Macdunk, traders would not have been in this share at all, because it is not liquid enough to allow them to 'get out' easily. Of course investors main objective is to 'invest' and pick up future dividend streams along the way. Not to withdraw from the market and sit on the sidelines sniping. So such liquidity concerns do not worry 'the investor'.

My latest purchase means my average entry price to SCT is now $1.60. That may not look so clever to you when the current market price is $1.18. However your implied assumption that $1.18 is the price for the number of shares that *I* want and indeed own is wrong. I could buy the number of shares I have now on the market today. But only by paying up to $1.40 per share (just checked the SCT market depth with my broker). The point you do not appreciate Macdunk is that the share price is set by supply and demand. That means if the demand suddenly increases (like if I wanted to buy my entire shareholding today), then the share price is no longer the quoted market buy price of $1.18!

A loss of $1.60 to $1.40 (let's leave dividends out of it this time as I know you are a well known 'dividend denier') or a 12.5% loss is not great news. But neither is it a 'slaughter'.
A 'slaughter' might better be akin to a PEM shareholder where 90% of their investment has disappeared over the past two years.

My 'sell strategy' Macdunk, is to sell when a share becomes overvalued above and beyond normal market fluctuations. In my judgement, without the benefit of hindsight, that hasn't happened yet with SCT.

SNOOPY

[Dr_Who]

Hey Snoopy. Is there a restricted period the owner cannot sell the 3.3 million shares issued at $1.20?

Interesting little company. I am gonna do more reading into it.

[Snoopy]

Hey Snoopy. Is there a restricted period the owner cannot sell the 3.3 million shares issued at $1.20?

We are told that not all of the shares will be issued to Devreaux until after a 'performance hurdle' has been satisfied. We aren't told when the hurdles have to be jumped. But given that Rocklabs is now a subsidiary of Scott Technology and the Scott Technology balance date is 31st August....

I would guess some shares will be restricted until this years results are totted up, maybe more released next year and perhaps still more the year after.

All this might be moot though if you are trying to 'time' your entry point into SCT.

The news today that the old PPCS (now Silver Fern) and PGW have agreed to a new joint venture is sensational news for SCT. I didn't see the SCT share price move much today. Perhaps the market hasn't figured out the implication yet? So I will spell it out.

SCT is Silver Fern's partner in the meat robotics project. The merger PGW/Siler Fern joint venture will accelerate the investment in robotics in those Silver Fern plants (we are talking tens of millions of dollars here) and SCT is the world leading designer and manufacturer of those meat industry robots!

I have been strategically accumulating SCT over the last few months in anticipation of the moment when the robotics technology would take off. The need has always been there, but only now is there the money in the customers pocket to spend up big. Perhaps the SCT robotics division is about to move into the limelight it deserves? Good luck to anyone who wants to accumulate a position in SCT tomorrow. But SCT has been firming in price for several weeks now, so I don't like your chances.

SNOOPY

discl: hold SCT, and have strategically doubled my holdings over the last twelve months.

[Sideshow Bob]

Think it was a couple of weeks ago it was announced that Alliance had bought one of the robots. The downside with it at present is the huge decrease in lamb numbers in NZ due to dairy expansion.

[Snoopy]

Think it was a couple of weeks ago it was announced that Alliance had bought one of the robots. The downside with it at present is the huge decrease in lamb numbers in NZ due to dairy expansion.

AFAIK, the 'Robotic Technologies Ltd.' robots (SCT and Silver Fern are 50/50 partners in this company) have only installed meat processing robotics at one Silver Fern site, the old PPCS Silverstream plant.

While the reduction in lamb numbers is a threat to the meat processing industry in the sense it will force more restructuring on the industry, this is no threat to Scott Technology expanding the production of their robotics. I guess the aim will be to equip all of the old PPCS meat processing plants with robotics, which is a huge opportunity for SCT.

The downside to SCT would be that the meat industry players become financially weak that they cannot afford to invest in high tech. The PGW/Silver Fern agreement has 'fixed' this problem in the Silver Fern corner of the industry at least.

SNOOPY

discl: hold SCT, PGW

[Sideshow Bob]

More robots....I wonder if they get them half price?

http://www.odt.co.nz/news/business/2...ooks-expansion


$6 million Finegand upgrade as firm looks at expansion
By Glenn Conway
Created 05/09/2008 - 05:00

Click photo to enlarge
[1]
Silver Ferns Farms Finegand plant manager Graeme Stanbury in the old chilling room, which will be expanded over the coming weeks. Photo by Glenn Conway. A multimillion-dollar fit-out during the off-season at Silver Ferns Farms' Finegand plant should lay to rest any doubts about the long-term future of Clutha's largest employer, manager Graeme Stanbury said.
Following a $20 million upgrade which included a new effluent treatment plant and boiler system, the plant, near Balclutha, is now undergoing a $6 million upgrade of its lamb cutting and beef boning departments.

Another $5 million will be spent on annual site maintenance.

The plant last season recorded a record beef kill of 61,286, surpassing the previous best kill of 60,996 in 2003, and up 11,663 on the 2007 figure.

The plant also processed more than 100,000 extra stock compared with the previous season.

Mr Stanbury said there was no doubt Silver Fern Farms was positioning Finegand to be a key player long into the future.

The investment showed the plant was thriving and was here to stay. At its peak, it employed more than 900 staff.

Alterations had started in the lamb cuts department, increasing the flow of products and creating extra chilling capacity.

After trials at its Silverstream plant, boning robotics technology would be introduced into this area in the coming season.

Developed by Dunedin-based Scott Technology, the system broke down carcasses, making precise cuts.

Two machines would be installed, but the rest of that process would still be carried out manually.

The company was deliberately increasing its chilled lamb cutting and fresh lamb kills as it gradually moved towards extending the killing season, Mr Stanbury said.

"We definitely want to lengthen the season . . . that means more production but also more work for our staff."

In time, it would look into processing the 100,000 bobby calves predicted to be available locally.

This could add up to an extra six weeks to the season.

New machinery, more space and better facilities in the beef boning room were also planned, with a new carton storage facility, extra carcass conveyers and larger staff amenities.

Mr Stanbury said these projects were the first two stages of a three-stage development.

Next season, more improvements to the boning room were likely as the company looked at improved product identification services, which would help make it easier to market the company's product abroad.

Customers wanted to know more about where their meat came from, Mr Stanbury said.

The new beef processing facilities should be ready for an October 28 start to the killing season, while the first sheep and lamb chain kills should be in mid-November.