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10-05-2019, 07:36 PM
#761
Member
Always appreciate your thoughts Percy.
As you say they have a history of overpromising. Price is looking steep for what you get.
considering its high payout ratio the yield at its current price is unimpressive
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10-05-2019, 08:05 PM
#762
Originally Posted by Patient Panda
Always appreciate your thoughts Percy.
As you say they have a history of overpromising. Price is looking steep for what you get.
considering its high payout ratio the yield at its current price is unimpressive
Correction.
What I actually posted was they HAD a habit of over promising.
I think that stopped when Liz Coutts became chair.
Yes payout ratio is around 80%,which is OK considering they carry little debt.
Gross yield 6% and 50% imputed is satisfactory.FY18 11cps....FY19. 13cps and FY 20. 14 cps according to Craigs projections.
ROE of over 17% is good.
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10-05-2019, 08:18 PM
#763
Member
Their forward looking plans are now sitting very nicely with what I like....in past years, nothing much happened, but now it looks like it has changed. I bought back in during August last year and then added a larger holding in January. I am certainly hoping that they have become more forward looking. Coupled with the low exchange rate, and the current low interest rates, the share price was nicely undervalued in January (when everyone was running scared) and I think still has a little room to move using the current year's annual report. I am hoping that they have "grown-up" now. Mind you, I like industrials that are innovative and also service today's needs (because they make money now).
It is worth reading that report.
Last edited by BeeBop; 10-05-2019 at 08:22 PM.
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10-05-2019, 08:27 PM
#764
Originally Posted by percy
... Gross yield 6% and 50% imputed is satisfactory.
Not in my book it's not satisfactory, I don't do satisfactory, I'd rather keep the hold on OCA in the meantime (that's what you sold I think, to make this switch, taking into account trading fees which few ever disclose or even acknowledge) doing well on OCA vs accepting a mediocre x% after tax on SKL that looks fully priced. Each to their own, I think some long term investment ideals might be beguiled by some short term trading instincts. Switch and bait is an age old tactic. It takes time to settle into a truely long term returns investment portfolio that we don't feel tempted to fiddle with, at least it does for me, but SKL isn't a part of it at this stage, may never be, who knows. It needs to compete, which imo it isn't right now.
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10-05-2019, 08:52 PM
#765
Member
The only time SKL has been good value IMO the last few years was when it was 1.15 in I believe it was 2016.
I can understand your reasoning for not holding OCA, I’m not a fan.
I f you’re looking for a place to put your funds I recommend briscoes at 3.30
pe 11.5
yield of 8.45%
roe last year 23% and 5 year average even higher
always under promises and over delivers
consistently growing divs
low debt
plenty of cash in the bank
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10-05-2019, 09:04 PM
#766
You cant go past HLG and you cant have too many.
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10-05-2019, 09:17 PM
#767
Originally Posted by Baa_Baa
Percy wrote: "Gross yield 6% and 50% imputed is satisfactory."
Not in my book it's not satisfactory, I don't do satisfactory, It needs to compete, which imo it isn't right now.
I was disappointed when it was announced this year that, for the first time, dividends would no longer be fully imputed. Nevertheless I believe this 'transition' was handled well. Dividends were increased at the same time and that meant no shareholder was worse off as a result.
You have to go back several years to understand why this has happened. Skellerup have located their manufacturing close to their biggest target market. So industrial pumps sold mainly in the USA are made in Skellerup factories in the USA. Car driveshaft couplings sold in Europe are made in a Skellerup factory in Europe. Milking equipment consumables in dairy mad New Zealand are made in Skellerup's new Wigram factory in Christchurch. This is all smart thinking that will minimise the effect on Skellerup of any international trade wars.
Up until the last few years the 'industrial' division of Skellerup has been having growing pains, as the Agricultural side of the business carried the company along. But now some of those overseas industrial investment gambles are coming to fruition. Skellerup doesn't earn imputation credits from their overseas factories. The fact that dividends are no longer fully imputed is a reflection of the success of Skellerup's overseas investment strategy.
While I agree that at $2.42, SKL is no longer 'cheap', growth is available on many fronts. There is no 'king hit' product that will send the SKL share price out of the park. Think instead of Skellerup more as an investment octopus with smaller growth arms flailing out everywhere. Even if one or two of those arms wither or end up being lopped off, that won't derail the growth engine of this Skellerup beast. I am not buying more Skellerup shares at today's prices. But given the returns of alternative places to put my money, I am not selling any either.
SNOOPY
disc: Shareholder
Last edited by Snoopy; 10-05-2019 at 09:31 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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10-05-2019, 09:22 PM
#768
Originally Posted by Patient Panda
The only time SKL has been good value IMO the last few years was when it was 1.15 in I believe it was 2016.
I can understand your reasoning for not holding OCA, I’m not a fan.
I f you’re looking for a place to put your funds I recommend briscoes at 3.30
pe 11.5
yield of 8.45%
roe last year 23% and 5 year average even higher
always under promises and over delivers
consistently growing divs
low debt
plenty of cash in the bank
BGP are a great success story,particularly their online growth.Agree low debt,plenty of cash and paying a good divie.All ratios are very attractive.
However, I am avoiding retail,as I see low interest rates will lead to a lower NZ $,which together with the new minimum wage increase ,will add stronger headwinds for retailers..I believe they are hitting hard already.
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10-05-2019, 09:24 PM
#769
Originally Posted by couta1
You cant go past HLG and you cant have too many.
Didn't some one say that about OCA or was it SUM...lol
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10-05-2019, 09:28 PM
#770
Originally Posted by Snoopy
I was disappointed when it was announced this year that, for the first time, dividends would no longer be fully imputed. Nevertheless I believe this 'transition' was handled well. Dividends were increased at the same time and that meant no shareholder was worse off as a result.
You have to go back several years to understand why this has happened. Skellerup have located their manufacturing close to their biggest target market. So industrial pumps sold mainly in the USA are made in Skellerup factories in the USA. Car driveshaft couplings sold in Europe are made in a Skellerup factory in Europe. Milking equipment consumables in dairy mad New Zealand are made in Skellerup's new Wigram factory in Christchurch. This is all smart thinking that will minimise the effect on Skellerup of any international trade wars.
Up until the last few years the 'industrial' division of Skellerup has been having growing pains, as the Agricultural side of the business carried the company along. But now some of those overseas industrial investment gambles are coming to fruition. Skellerup doesn't earn imputation credits from their overseas factories. The fact that dividends are no longer fully imputed is a reflection of the success of Skellerup's overseas investment strategy.
While I agree that at $2.42, SKL is no longer 'cheap', growth is available on many fronts. There is no 'king hit' product that will send the SKL share price out of the park. Think instead of Skellerup more as an investment octopus with growth arms flailing out everywhere. Even if one or two of those arms wither or end up being lopped off, that won't derail the growth engine of this Skellerup beast.
SNOOPY
disc: Shareholder
SNOOPY,
Thank you for your post.
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