SCT - Scott Tech

[Zito]

I totally fail to see the point of running down other posters on this forum. The purpose of it should be to enlighten others with your wisdom MacDunk, rather than to belittle them and tell tales of your self-proclaimed brilliance.

I for one do not follow Buffetology. However I can see much of virtue in it. After all, who can argue with a man who has Warren Buffett's record of success.

Personally I regard Snoopy as one of the most valued contributors on this forum because his well-thought-out and grammatically correct posts educate me. His investing methods are not my own. But that doesn't mean that he is right, or I am right. It doesn't matter who is right. All that matters is that we are successful in the methods that we choose to use, and learn from our mistakes and from each other. Why else are we here? Hopefully not to tell everybody else that they are idiots.

[macduffy]

I totally fail to see the point of running down other posters on this forum. The purpose of it should be to enlighten others with your wisdom MacDunk, rather than to belittle them and tell tales of your self-proclaimed brilliance.

I for one do not follow Buffetology. However I can see much of virtue in it. After all, who can argue with a man who has Warren Buffett's record of success.

Personally I regard Snoopy as one of the most valued contributors on this forum because his well-thought-out and grammatically correct posts educate me. His investing methods are not my own. But that doesn't mean that he is right, or I am right. It doesn't matter who is right. All that matters is that we are successful in the methods that we choose to use, and learn from our mistakes and from each other. Why else are we here? Hopefully not to tell everybody else that they are idiots.

Thanks, Zito.

That would win my Quote of the Month award for July, if not for 2009, so far.

I hope that we're all learning that there is more than one way to skin the proverbial cat.

[Snoopy]

Penny wise pound foolish Snoopy thats all i can say about your methods.

In Jan 2008 when i sold up this is what you stated as a long term holder averaging down was holding.
SCT was $1-80 in jan 2008 now $1-05.
TEL was $4-40 in jan 2008 now $2-85.
PGW was$2-10 in jan 2008 now 95c
NZS was $1-60 in jan 2008 now 45c
WHOOPEE DOO SNOOPY RBD is 13c higher plus all those dividends.

I won't go over the dismal record of your minerals shares Macdunk that you 'sold' (except that you didn't sell when you moved half of them into your 'investment' portfolio in a desperate attempt to ring fence your trading profits), in January 2008.

Macdunk, you know all about Norgate's debt fuelled expansion foray with PGW, and now it seems NZS (where they are borrowing money to finish off the farms). The market has marked down these shares because of their doubtful ability to generate sufficient free cash flow. While I am down on both of these investments -right now-, I am not down nearly as much as your figures imply. That's because I paid nowhere near those prices you quote for the shares. Also the business plan for NZS at least appears intact. So I will continue to do what I originally planned to do. And that is wait until those Uruguayan farms are in full production before I evaluate the success of that investment.

You price comparison with TEL is dishonest because you have ignored the dividends of 40cps over that time. Of course a fall from $4.40 to $3.25 doesn't sound so dramatic.

And SCT has buyers in the market today at $1.07, up again from the last quoted price of $1.05. So you aren't up with today's valuation there.

You are a great example of what happens to people that Ignore the market with no stop loss system.

I may have ignored the market Macdunk, but I haven't ignored the opportunity the market has presented to me.

I have boosted my shareholdings in TEL by 25%, RBD by 56% and my shareholding in SCT by 157% since 1st January 2008. And now I am sitting there ready to take advantage of the upcoming cashflows (particularly with TEL at an 8.4% gross yield, and RBD on a 10.2% gross yield) while you sit on the sidelines earning your measly 4.5% at the bank.

The problem with your 'timing of the market' Macdunk is that you have ended up with a 'disinvestment strategy', not an 'investment' strategy. And I don't think you know how to get back in.

SNOOPY

[elZorro]

Incidently I am getting out of gold and silver positions and preparing for the next rise in commodies. Macdunk

I've been investing in shares for just over 5 years, and I'd class myself as a novice with a lot of learning to do. So I've been highly amused at (and informed by) the postings on this blog site over the years, and MacDunk is one of the standout entertainers. Without him posting, they'd be less reply posts and little interest I'd suspect.

I've followed the entertaining NZOG etc threads for a while, but lost interest, perhaps like Macdunk. In retrospect, his investment strategy was a very safe one, and showed he didn't let the sharemarket promises override the need to preserve capital in the event of a strong downturn. And he probably didn't invest in finance companies either.

What's going to be interesting, is figuring out which commodities (sp) are going to provide the higher returns we're all after, to offset the risks we'll need to take.

-elZorro-

[duncan macgregor]

I have pulled a non charting 'Scott Technology' thread out of the archives. That is really because I don't think Scott Technology is a good trading share because of poor liquidity. Last Friday only 95 (not a misprint) shares were traded! I dare not think how much less than a marketable parcel 95 shares is.

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.

I notice the engineering director, Kevin Kilpatrick, sold all of his shares late last month. Ordinarily an insider 'selling out' like that is not good news. However, Kilpatrick has already signalled his retirement from the company to go 'grape growing' in Marlborough in August 2008. Given he is still a director of Scotts, Kilpatrick had a limited window of opportunity to 'sell out' while the company annual results are fresh. If he had waited he could have been accused of insider trading. So I don't think Kilpatrick selling out to fund his new grape growing activities in Marlborough should necessarily be seen as a loss in confidence in Scott Technology itself.

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

SNOOPY look at the money you might have saved your self with a modest stop loss. Fundamental analysis is as usefool as tits on a bull as you are proving. SCT is a disaster with its illiquidity in the market. With patent rights being non existant in china judging from the copy cat duplicates in our market makes SCT is a high risk share. Macdunk

[Snoopy]

SNOOPY look at the money you might have saved your self with a modest stop loss. Fundamental analysis is as usefool as tits on a bull as you are proving. SCT is a disaster with its illiquidity in the market. With patent rights being non existant in china judging from the copy cat duplicates in our market makes SCT is a high risk share. Macdunk

You quoted my post with former director Kilpatrick selling in 2007 Macdunk and my prediction 2.5 years hence. It is now 2009. So we have another 6 months or so before we can judge if that is egg on my face. It is interesting to see that my average purchase price of shares around that time was $2.07. Since the start of CY2008 the new SCT shares I have purchased have cost me an average of $1.07. That means my overall entry price is considerably lower now than it was in 2007. Ironically even if my 2007 share price hopes go AWOL, and nothing happens to the share price from here, I will still be in better shape than then.

My improved position is all due to what you term 'averaging down' Macdunk, but is in fact what I term is buying shares at bargain prices. Buy low and sell (if you have to) high is my system Macdunk. You should try it sometime.

Poor liquidity is only a problem if you need to sell Macdunk. If you don't need to sell, like I don't, it can work to your advantage. Of course a trader like you, who's main aim in investment life is to simply to 'sell out' would not understand.

Risk Macdunk, is all about knowing what you've got. The more you know, the lower the risk for you. Your quote:

"With patent rights being non existant in china judging from the copy cat duplicates in our market makes SCT is a high risk share."

doesn't have much context to me.

I think SCT have worked on a Haier production line in China. What do you think Haier in China will do? Steal their own production line 'secrets' that they already own? The ultimate 'inside job'? I agree that product re-engineeering in China is a threat to NZ manufacturers. But 'product' is not what Scott Technology do. Scott Technology are fundamentally process engineers. IMO that means they are probably the manufacturer in NZ that is *least* under threat from China.

SNOOPY

[Snoopy]

SCT in the news ... http://www.nzherald.co.nz/technology...0589244&pnum=0 ... nice positive spin stuff too.

No real news in that story for those that follow SCT closely Belg. Still the market seems to like the news as buyers are in the market at $1.10, with quite a gap to the willing sellers at $1.20. And I guess the more people that know the story, the more people will realise how potentially undervalued SCT is.

As is normal for SCT though, liquidity is low with under 5,000 shares traded. So no real chance to establish a position in this company. If you wanted to do that, you should have been buying your shares when the price was on the way down, like I did. One comment that did catch my attention in the article was this:

"About $14 million later, the joint venture, Robotic Technologies, has created a "lamb primal breakdown system" "

Robotic Technologies is SCT's 50% partner with Silver Fern Farms.

I hadn't seen any 'admission' by SCT as to how much they had invested into robotic technology over the years. And SCT have got away with not telling we shareholders by simply writing off all development expenses as they have been incurred. However, writing off all that money that has been invested in robotics does not mean the investment has been fruitless, as we are just starting to see now.

Scott's share of that investment, $7m, might not sound a lot in corporate terms. But $7m is more than Scott's total profits summed up over the last five years. If future development of the robotics program can be funded out of robotics division profits, rather than being paid for from the appliance production line profits, then I think we are looking at a step change in the profitability of SCT into the future.

SNOOPY

discl: hold SCT

[elZorro]

Belgarion-"Robotics for Farming" is really something that Kiwis could excel at. I.e. we have the engineers, software engineers and farmers.

I agree. When you see some of the awesome industrial robots that are around, you can't help thinking about one or two putting cups on, in a rotary milking platform. Surely it's possible. But apparently the patent rights are well covered by Lely and DeLaval, and fiercely protected.

[Snoopy]

I posted the above because share prices go up due to demand. I thought I'd help you out by adding a bit more demand.

... And raising the profile of SCT whose management I respect enormously for sticking to their knitting and being Kiwi pioneers of the first order.

It worked Belg. Buyers are now in the market at $1.20! SCT are up 71% from their 70c lows of recent months. I admit to still being underwater on my overall investment in SCT. But do I see Mr Market standing near the edge of the pool with a towel for me? It took around 10,000 shares to lift the market share price 10c from $1.10 to $1.20. By that 'measure' there is no way I could accumulate the holding I have now at the average price I paid.

There are still no announcements from the company that would explain a share price rise of 71%. Whatever happened to the NZX 'please explain ' watchdog? Has it gone to sleep?

SNOOPY

[sharer]

Snoopy:"...There are still no announcements from the company that would explain a share price rise of 71%. Whatever happened to the NZX 'please explain ' watchdog? Has it gone to sleep? "

Was it ever awake, really?
After decades of disappointment with NZ market regulation, I can't wait to get out of my NZX listed holdings. So far got $60% over to ASX stocks, but slow work waiting for chances to escape without having to swallow too many dead rat losses.