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23-07-2015, 09:23 AM
#251
As PT keeps reminding us, read SSH carefully and don't skim through them and jump to conclusions
Mind you besides the bereaucratic need for form filling I believe there should be a short summary somewhere. Not too hard
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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23-07-2015, 10:32 AM
#252
Originally Posted by percy
Snoopy.
Raw materials will be costing more.
Imported goods such as gumboots will be costing them more.
Of concern is SKL share price weakness while other exporters' share price has gone up ,including SCT.
Percy, a farmer in need of a new pair of gumboots is not going to risk soiling his woolly socks inside a half manufactuired pair of North Korean gumboots. Yes Skellerup may have a hard time over the next year due to demand side pressuires on their customers. But the fundamentals of producing high quality consumables are still there. Farmers need quality gear at they will continue to buy Skellerup stuff because they can trust it.
The current macro environment is perfect for acquiring SKL shares. Not sure about the exact timing, which is why I am staggering my purchases of SKL throughout the year. One thing am am sure about though. 2-3 years down the track any shares you can buy at anywhere near todays prices will be seen as dirt cheap.
SNOOPY
Last edited by Snoopy; 23-07-2015 at 10:33 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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23-07-2015, 11:03 AM
#253
For my money Snoopy the trend is absolutely crystal clear and holding off until some technical buy signals start firing appears to make good common sense. Personally I do not try to pick the bottom of a stock in a very clear down-trend as the risk of capital loss is too great and a lot of money has been lost on this stock in the last 12 months. I have this on my watchlist BUT am happy to wait for as long as it takes for a clear break back above the 100 day MA. The market appears to be saying that the severity of the headwinds facing dairy farmers and iron ore producers is impossible to overstate. I don't know about others but I find swimming against the tide too much hard work.
Last edited by Beagle; 23-07-2015 at 11:06 AM.
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23-07-2015, 11:29 AM
#254
Hi Roger, understand what you are saying. On the other hand - if you look at the trend, buying at the last golden cross and selling at the quickly following cross of death wouldn't have helped you much either (unless you are a broker ).
If you look at the stock: they open later this year a brand new (and already paid for) factory, they have a very healthy balance sheet (you probably would call quite lazy), they produce quality consumables required by several important industries (even if these industries go currently through a rough patch, but they will always be needed), most of their raw materials are currently actually quite cheap (low oil price) despite the lower NZ$, they pay a healthy dividend (though not quite as outrageous as PGW) which they can afford ... and their CEO is holding heaps of shares and accumulating.
Whats not to like about them?
Discl: holding and still in accumulation mode ... actually - they might be the right place to park some of my recent SUM gains
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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23-07-2015, 11:46 AM
#255
Thanks Snoopy.Yes I agree a farmer can't put off buying a new pair of gumboots.
I just keep wondering why the sellers have been so dominate for such a long time.
$1.26 today,and it was not long ago they looked sure to go back over $1.40.
Mair and every one buying,yet the sp continues downwards?
I guess it is just proving that share prices over and under shoot fair value.
I see 4-traders have eps 10 cents for 2015,12 cents for 2016 and 13 cents for 2017.So 20% growth followed by 8.3% which is healthy.
ROE is not bad at 13.9% and forecast yields are 6.88% for 2015,7.06% for 2016 and 7.20% for 2017.
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23-07-2015, 12:52 PM
#256
Originally Posted by BlackPeter
Hi Roger, understand what you are saying. On the other hand - if you look at the trend, buying at the last golden cross and selling at the quickly following cross of death wouldn't have helped you much either (unless you are a broker ).
If you look at the stock: they open later this year a brand new (and already paid for) factory, they have a very healthy balance sheet (you probably would call quite lazy), they produce quality consumables required by several important industries (even if these industries go currently through a rough patch, but they will always be needed), most of their raw materials are currently actually quite cheap (low oil price) despite the lower NZ$, they pay a healthy dividend (though not quite as outrageous as PGW) which they can afford ... and their CEO is holding heaps of shares and accumulating.
Whats not to like about them?Discl: holding and still in accumulation mode ... actually - they might be the right place to park some of my recent SUM gains
Hi BP - The fact that the trend is not your friend. Scarcely even believable but sadly true, dairy futures are even further down the toilet than the last GDT auction. Iron Ore has recently taken an even more severe turn to the downside. Companies and investors exiting those industries / putting mines on care and maintenance only ? Dairy farmers converting back to Beef, grain, goats, sheep, deer or whatever ?
Last edited by Beagle; 23-07-2015 at 12:54 PM.
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23-07-2015, 01:11 PM
#257
Originally Posted by Roger
Hi BP - The fact that the trend is not your friend. Scarcely even believable but sadly true, dairy futures are even further down the toilet than the last GDT auction. Iron Ore has recently taken an even more severe turn to the downside. Companies and investors exiting those industries / putting mines on care and maintenance only ? Dairy farmers converting back to Beef, grain, goats, sheep, deer or whatever ?
Seems unlikely that dairy farmers would convert back to beef etc. They certainly would not do that at the drop of the hat, there is a lot of capital tied up in milking platforms, irrigation, stock etc that would be lost.
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23-07-2015, 01:23 PM
#258
Originally Posted by Roger
Hi BP - The fact that the trend is not your friend. Scarcely even believable but sadly true, dairy futures are even further down the toilet than the last GDT auction. Iron Ore has recently taken an even more severe turn to the downside. Companies and investors exiting those industries / putting mines on care and maintenance only ? Dairy farmers converting back to Beef, grain, goats, sheep, deer or whatever ?
In the 1950s at the height of the Korean War wool boom and dairying was very much the poor relation conversions did occur. You feel for the young indebted dairy farmers who are in effect working l 14 hour days for nothing .
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23-07-2015, 02:09 PM
#259
Originally Posted by Sgt Pepper
In the 1950s at the height of the Korean War wool boom and dairying was very much the poor relation conversions did occur. You feel for the young indebted dairy farmers who are in effect working l 14 hour days for nothing .
I do indeed as I am sure most Kiwi's feel sympathy. I don't think anyone was predicting it would get this bad and its much the same for Australian iron ore operations, who would have though a tonne of iron ore would be worth south of $50 U.S. ? Worse, the trend in these commodities is not your friend and with China cooling who can reliably say where the bottom is for either commodity ?
I think its that uncertainty that's affecting SKL's SP. Until there's some evidence of a stabilisation in the commodity prices...
I think in relation to conversions nobody is predicting early decisions but if there's a really sustained multi year collapse in dairy maybe farmers will have no other alternative than to start thinking about capital reallocation notwithstanding heavy restructuring costs ?
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23-07-2015, 02:38 PM
#260
Getting a bit off track here but the trend is certainly your friend if you recognised it early enough and steered clear of dairying and iron ore miners. In SKL's case, I hold a few but wouldn't be adding until the present trend reverses.
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