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19-04-2021, 11:47 AM
#971
Originally Posted by winner69
Another positive announcement from a company that has recently consistently delivered for shareholders.
I added the recently for you
But no worries about the past - the future brighter than ever
You did beat me to it ... Anybody remembering the GFC? - SKL shareholders didn't look that happy during that time :
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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19-04-2021, 11:49 AM
#972
Originally Posted by BlackPeter
You did beat me to it ... Anybody remembering the GFC? - SKL shareholders didn't look that happy during that time :
....and many years after the GFC ....but heck let bygones be bygones
Skellerup is now a star performer
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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19-04-2021, 11:50 AM
#973
Originally Posted by winner69
Another positive announcement from a company that has recently consistently delivered for shareholders.
I added the recently for you
But no worries about the past - the future brighter than ever
Fair comment. I've edited my post ...
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19-04-2021, 01:20 PM
#974
Member
Originally Posted by BlackPeter
You did beat me to it ... Anybody remembering the GFC? - SKL shareholders didn't look that happy during that time :
Yes I remember it well... I bought more then and I bought more today.
Happy holder for many years.
Last edited by Soolaimon; 19-04-2021 at 01:22 PM.
Soolaimon
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19-04-2021, 05:08 PM
#975
And yet its down on the day, go figure
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19-04-2021, 05:20 PM
#976
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27-04-2021, 10:43 AM
#977
Originally Posted by nztx
Just a few words -- follow the old smart money (Cushing & Co )
when they jump ship, time to sit up & look around..
Does Liz Coutts count as 'old money'? I think she was mentored by dear old Sir Selwyn in the early days. A couple of hundred thousand SKL shares cashed out on 23rd April. $869,800 / 200,000 = $4.35 per share for our Liz as announced to the stock exchange today. Mind you still 720,000 shares of skin in the game so hardly 'jumping ship'. A balmy winter forecast for Auckland means that 'new deck' beckons?
SNOOPY
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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08-05-2021, 01:56 PM
#978
Member
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08-05-2021, 02:05 PM
#979
Originally Posted by Snoopy
Does Liz Coutts count as 'old money'? I think she was mentored by dear old Sir Selwyn in the early days. A couple of hundred thousand SKL shares cashed out on 23rd April. $869,800 / 200,000 = $4.35 per share for our Liz as announced to the stock exchange today. Mind you still 720,000 shares of skin in the game so hardly 'jumping ship'. A balmy winter forecast for Auckland means that 'new deck' beckons?
SNOOPY
Dear old Sir Selwyn?
Wasn't he the one that cheap old Sir Bob Jones mentioned in one of his books, that he was only suitable for doing the local plumbers accounts?
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08-05-2021, 09:00 PM
#980
'Simply Wall Street' 2nd May 2020 Valuation Review
Originally Posted by Snoopy
Earnings Per Share = Normalised Net Profit over Year / No.of fully paid shares on issue at End of Year
2020: ($39.831-$0.685-$10.767+$0.400+0.72x0.255)m/194.753m = 14.9cps
Notes:
a/ Results have had foreign exchange currency gains removed (FY2020 $0.685m)
d/ FY2020 result adds back an after tax $0.400m 'before IFRS16' adjustment to allow a like with like comparison of NPAT with previous years.
e/ FY2020 result adjusted for a $0.255m 'vacated lease' payment. ( AR2020 )
Originally Posted by Snoopy
Return on Equity = Net Profit After Tax / Shareholder Funds at End of Financial Year
2016: $22.849m /$155.855m= 14.7%
2017: $19.635m /$159.247m= 12.3%
2018: $26.154m /$172.286m= 15.2%
2019: $29.233m /$178.392m= 16.4%
2020: $28.963m /$184.563m= 15.7%
14.7% rounds up to 15% in whole number terms.
Originally Posted by blackie
Thanks for the 'Simply Wall Street' reference Blackie. That was quite a bullish review on a company that I know well. A large factor in the bullishness was the touted 20% 'ROCE'. ROCE (Return on Capital Employed) is similar measure to the ROE (Return on Equity) that I have calculated above for the preceding five years. The difference being:
ROCE = (Earnings Before Interest and Tax) / (Total Assets - Current Liabilities)
ROE = (Net Profit After Tax) / (Total Assets - Total Liabilities)
If I take the unadjusted earnings from FY2020 I calculate ROCE as follows:
($39.631m + $2.582m) / ($283.642m - $36.550m) = 17.1%
The 'Simply Wall Street' guys used slightly different numbers to get an ROCE of 20%. I cannot explain where SWS get their slightly different numbers from. But both 17.1% and 20% are good figures, and the difference is not material to the broader discussion. The article suggests that an ROCE of 20% should be used to project earnings going forwards. Given the average ROCE over the previous five years would have been significantly below this figure, I believe that would be a rather too aggressive assumption.
I don't use ROCE to evaluate companies myself. That is because companies:
1/ do have to pay interest AND
2 do have to pay income tax, AND
that 'money out' is money that cannot be reinvested for future growth. ROCE ignores interest and tax and that IMO gives a less accurate picture of the future capital that the company can internally generate.
My post 882 suggests an earnings per share growth rate of some 3% per year, verses the SWS figure of 8.45% per year. The justification for that 8.45% is that earnings have grown even faster than that over the previous five years (10.3% per year). My adjusted calculations (post 857) show a five year 'eps' growth rate of:
11.1(1+g)^5 - 14.8 => g = 5.9%, or much lower than SWS is telling us happened.
So based on historical record reality, I think the SWS projected growth rate is too high. It would be great if I was wrong and SWS turned out to be right. But I like to do my calculations based on earnings growth that can be demonstrated to have happened in the past, and I can't replicate the SWS calculations on growth.
With SKL trading at $4.50 on the day SWS published their analysis suggestion is that this price is only 43,2% of 'fair value':
$4.50 / 0.432 = $10.42 (SWS fair value for SKL)
Good luck with that.
'Warning sign 1' highlighted by SWS was the insider share sell down by chairman Liz Coutts (my post 977) that I do not consider an issue.
An unstable dividend track record' is the other point of concern. However, this statement appears to be just plain incorrect as the dividend has been increasing every year for the last few years. Skellerup even continued to pay dividends through the initial Covid-19 scare.
A problem I see is that the share price has grown by 100% purely as a result of PE expansion. I am always suspicious as to the sustainability of this, even though an historical adjusted PE of 30 (15 is more the historical average for SKL) doesn't look out of line with some other well performed shares in the market today. In the meantime I think I will continue to hold my SKL shares until they reach that SWS target of $10.42 ;-). Nevertheless I feel that may be a considerable number of years into the future!
SNOOPY
discl: hold SKL and not increasing my holding at today's prices.
Last edited by Snoopy; 09-05-2021 at 09:25 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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