SCT - Scott Tech

[Snoopy]

Snoopy, it took me a full month to get out of SCT. This re-emphasised for me the problems inherent in investing in illiquid stocks. Aren't you just a little bit worried about the difficulties you will face in extricating yourself from SCT when the time comes?

SCT shares have risen over 30% from their lows of the last two months. This isn't a surprise considering.....

Actually the SCT share price rise *is* a surprise because there has been no significant news from the company at all over the last couple of months. Nothing. My theory is that it could be defacto insider buying caused by the company setting up an in house share ownership scheme. But I have no proof.

One thing I do know is that on many days SCT does not trade at all. And often when it does then the number of shares traded are less than a marketable parcel. Certainly it would have been impossible to build up a meaningfully sized parcel of SCT shares for those wanting to catch the share price rise.

This is one of those instances where low liquidity works for you, provided you own the shares already. And of course the remaining way to 'already own' that 'meaningful share parcel' is to have your cheque book ready while the SCT share price is on the way down.

I know some of you don't like buying on the way down because you believe the market is always right. Well the market has told us that over the last two months the 'market value' of SCT shares is between 70c and 93c. The market may be roughly right. But surely it is better to buy your shares at 70c, rather than spend over 30% more to end up owning exactly the same thing?

SNOOPY

discl: hold SCT

[Snoopy]

Actually the SCT share price rise *is* a surprise because there has been no significant news from the company at all over the last couple of months. Nothing.

SCT closed at 98c on Friday. But buyers were in the market at $1 on the Friday closing bell. So $1 is the real market price -despite what those charts might tell you- up another 6c on a mere 1500 shares (less than a marketable parcel). The share was trading at only 70c on 16th April scarcely three months ago. So a gain of 42.9% in such a short time is not to be sneezed at. I am half surprised that the stock exchange has not come out with a 'please explain', as there has been nothing released to the media that could explain this huge price differential.

Truly massive gains are now being booked by investors backing SCT, provided that is you were able to get your money onto the share at 70c on the date I quoted. Only two to three people did, and I was one of them. So despite being able to gain 'on paper' like we three did, any real investor backtesting systems on charts would have been stone out of luck - despite what their computer charting programs told them was possible.

Of course those of you who have been following this SCT thread for a while will know that I should not yet be celebrating. Despite this huge recent success, I am only partly back from the bath I took by holding onto SCT shares bought at much higher prices. In liquor terms my whine is still red. Yet if the share price rise was 'not real' for most investors, could one not argue that the share price fall that lead the price down to that 70c level was 'not real' either? If you considered the low liquidity which was evident in the trades on the way down, then yes I think you could.

Anyway it is good to be back above the $1 mark, even though the original share price fall to 70c was not real, and using the same logic the gain that I should be celebrating back to $1 was not real either. In reality this 42.9% gain is nothing to celebrate at all! The bottle of wine and glasses will have to go away for today. What strange mind tricks are played when you can't rely on 'the market' to show you how your investments are doing!

SNOOPY

discl: but I do hold plenty of SCT shares - that bit *is* real at least.

[Snoopy]

SCT closed at 98c on Friday. But buyers were in the market at $1 on the Friday closing bell. So $1 is the real market price -despite what those charts might tell you- up another 6c on a mere 1500 shares (less than a marketable parcel). The share was trading at only 70c on 16th April scarcely three months ago. So a gain of 42.9% in such a short time is not to be sneezed at. I am half surprised that the stock exchange has not come out with a 'please explain', as there has been nothing released to the media that could explain this huge price differential.

Up another 8% today again, on the last 'traded price' with 19,000 shares put through the market at $1.05. That is quite big volume for SCT and I know all of those shares were from one seller. The buyer, however, is still sitting there at $1.05 and the next shares off the rank are listed at $1.15.

I wonder why the shares are being bought up? If it is one of you traders out there doing the buying please fess up as the suspense is killing me! We are now up an even 50% on that April 2009 low. I have ridden a few bulls this year, but this SCT ride is proving the wildest of all.

Perhaps the 'better' Whirlpool result, means that more capital expenditure in the global whiteware industry is coming sooner than anticipated? I guess if I want to benefit from what is happening at SCT , I'll just have to keep hanging on like grim death.

SNOOPY

discl: hold SCT

[Jaa]

Hate to break Snoopy's excellent steady stream

SFF are raising capital to spend:

"between $25 million and $30 million used for capital investment, such as rolling out its x-ray carcass-imaging and robotic technology developed with joint-venture partner Scott Technology"

http://www.nzherald.co.nz/business/n...ectid=10586782

Might explain part of the recent increase but most is probably the turn in manufacturing sentiment?

[Snoopy]

Hate to break Snoopy's excellent steady stream

SFF are raising capital to spend:

"between $25 million and $30 million used for capital investment, such as rolling out its x-ray carcass-imaging and robotic technology developed with joint-venture partner Scott Technology"

You might be right on with the Silver Fern technology roll out Jaa. I decided to do a bit of searching myself, at the frustration of no news from SCT.

Here is what I found on the Silver Fern Farm's website. A press release from 'Robitic Technoloies', the joint venture with SCT!

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‘VISIONARY’ GRADING SYSTEM LAUNCHED (report 22-06-2009)

Consumers like to see what they are buying. And this is particularly true when it comes to food.

Meat companies, by contrast, don’t have the luxury of seeing what they have bought until after processing. That is, until now. Robotic Technologies Limited (RTL) – a joint venture between Silver Fern Farms and Scott Technology – has developed New Zealand’s first X-ray grading system for lamb processing. The company’s Market Value Traceability System (MVTS), has recently been commissioned at Silver Fern Farms’ Pareora plant near Timaru, to ascertain quality and value. Part of the company’s commitment to traceability, quality and innovation, the MVTS process also identifies cutting points for the commercialised automated carcass cutting machine.

The first stage of MVTS is being used to accurately predict the weights of the three primal cuts (leg, middle and shoulder). Typically, the shoulder has a value of about half of that of the leg or middle, so prediction of the primal yields will allow feedback to suppliers on the carcass conformation and resultant market value. The system will also count the ribs in each lamb. In the second stage, the hardware will be upgraded over the next two years to DEXA to accurately predict the meat/fat/bone ratio for each lamb before it is processed.

Keith Cooper, Silver Fern Farms’ Chief Executive, says information on yields can be used to place value on carcasses and improve decision making on the allocation of carcasses for cutting to best suit customer requirements and the optimal way to process carcasses through our processing rooms.

“Primal weight predictions and rib count information will feed into the Silver Fern Farms production scheduling system to work out the best processing option for each carcass, improving decision making and optimising our production process against customer requirements.”

“Feedback on carcass conformation will allow breeders to identify genetics that deliver the optimal outcome in relation to consumer cut size preferences. This technology will definitively complete the picture in relation to genetic performance.
“Processing efficiencies are an important component of our integrated supply strategy, providing greater value across the supply chain through better yields, and better communication and direction back to our suppliers and breeders.”

Mr Cooper says Silver Fern Farms had experimented with the use of video cameras for objective carcass measurement, but moved away from the technology in favour of MVTS. “While X-ray requires more capital investment, it has the potential to achieve more for suppliers and processors than external carcass image analysis.

“External analysis systems such as ViaScan can only provide estimates of conformation, but the inability to see through the carcass limits the technology to a relatively crude system for supplier feedback. X-ray will provide more information to suppliers and improve product value by improving decisions on the best way to process the carcass to customer’s standards."

Combined with other advances such as radio frequency identification (RFID) traceability and control systems to improve meat quality and extend shelf life, MVTS will see Silver Fern Farms setting a new standard in meat cuts for New Zealand lamb, helping cement relationships with customers and underwriting returns to suppliers as they improve their genetics and farm management systems to capture premium payments.

“We will be using the next 12 months to get a better understanding of the benefits from smarter processing decisions from this technology, but expect that the average benefit per carcass from yield increases and better matching of carcasses to markets to be in the range from $2 to $5 at current price levels,” Mr Cooper says.

Before the end of this year, Silver Fern Farms is planning to roll out the X-ray capability at its two largest lamb processing plants – Takapau in the North Island and Finegand in the South Island – providing access to the technology for the main lamb producing areas of New Zealand. The technology will be rolled out to all Silver Fern Farms lamb plants by the end of 2011.

The capital investment in the X-ray grading system is expected to total $10 million.

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I note a mismatch between the $10m quoted above and the $25m-$30m as quoted in the Herald article. That $10m is for X-ray equipment only. Perhaps another $5m might go into 'other robotics' while $10m is spent in altering the buildings to take the new equipment.

That makes a total of $15m going to 'Robotics Technology'. SCT is a 50% shareholder so they will get $7.5m over two years. That is $3.75m of revenue per year, which might translate to $2m of profit per year (?).

In per share terms that is 7c of eps. Even if the rest of SCT makes nothing over the next two years we are looking at an earnings yield of 6.7% from the automation division alone, based on that closing share price of $1.05.

Given that, it doesn't sound too speculative to hop into the market and buy some shares at $1.05 after all. Well done to that person who ferreted out and read those press releases and looks set to be sitting in a good place.

SNOOPY

discl: hold SCT

[Major von Tempsky]

I think that economic backwoodsman MacDunk, who can't understand comparative advantage and free trade amongst many other things, is still apologising to people for telling them to sell TEL at $2.15 isn't he? ;-) - currently $2.85.

He also seems unable to understand that every Western democratic country plus Japan, South Korea, Taiwan & & & have independent central banks who will raise interest rates when the inflation rate rises so the possibility that these countries will go into sustained serious high inflation just isn't there. And as Snoopy has noted having your money in cash rolls under the bed or in the bank is not the way to go if MacDunk actually believed his prediction.

[Snoopy]

I think that economic backwoodsman MacDunk, who can't understand comparative advantage and free trade amongst many other things, is still apologising to people for telling them to sell TEL at $2.15 isn't he? ;-) - currently $2.85.

I couldn't understand what you were doing on this thread Major, until I re-read the Silver Fern Farms press release.

"The company’s Market Value Traceability System (MVTS), has ... blah, blah"

"Market Value Traceability System" my paw.

The real reason for Scott's success is that they are following the secret MVTS system that has been proven many times in the past: the 'Major Von Temsky System'!

The Major is Scott's 'secret weapon' management consultant!

SNOOPY

[duncan macgregor]

Another little rant about something you know nothing about MVT. Look up my predictions this year with SHREWD CRUDE in our own little contest to get an insight to what i am up to in real life. Anyone holding TEL all the way down the way have raving on about a modest little rise is as dumb as they come. Getting back to SCT read back on what i said in this thread years ago which might have saved a few investors some money. Remember MVT i predicted a down trend leading up to a crash after the olympics and removed my funds from the market. Macdunk

[Snoopy]

macdunk , you run the risk of having your mountain of cash inflated away
What material assets are you going to buy?
I suggest you get yourself some scott tech, telecom and rest brands shares, pronto

Blimey only just noticed. Look how posts can come back to haunt you.

I don't have the 9th April figures available but from 31st March to today, a period just over three months:

SCT: Open 0.70c Dividend 0c Close $1.05: Return +50%
TEL: Open $2.28 Dividend 6c Close $2.86: Return +28%
RBD: Open 81c Dividend 4c Close $1.02: Return +31%

I don't know what tea leaves you were on that 9th April day, Mick. But in investment terms: You are the new daddy!

SNOOPY

[duncan macgregor]

Blimey only just noticed. Look how posts can come back to haunt you.

I don't have the 9th April figures available but from 31st March to today, a period just over three months:

SCT: Open 0.70c Dividend 0c Close $1.05: Return +50%
TEL: Open $2.28 Dividend 6c Close $2.86: Return +28%
RBD: Open 81c Dividend 4c Close $1.02: Return +31%

I don't know what tea leaves you were on that 9th April day, Mick. But in investment terms: You are the new daddy!

SNOOPY

Penny wise pound foolish Snoopy thats all i can say about your methods. I predicted a downtuin leading up to a crash and sold all my shares at the start of 2008 placing my money in the security of a few large banks. I then bought Gold silver and oil at the start of 2009 and a few shares in PPP as stated in my competition with shrewd Crude. Everything was stated in advance of the event.
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 wont mention turners
You are a great example of what happens to people that Ignore the market with no stop loss system.
Incidently I am getting out of gold and silver positions and preparing for the next rise in commodies. Macdunk