Skellerup (SKL) Fundamentals

[winner69]

Excellent example / debate this morning of perspective and viewpoint.

A psychologist investor / friend once told me the issue of whether a glass is half full or half empty has finally been resolved and is all to do with one's perspective and viewpoint.

.

The guys at the London School of Economics would love the responses to todays announcement. I will point them to this.

Skellerup long term company performance is nicely summed up in a long term share price chart (below)

Skellerup is always gunna be a great company - but never delivers

Anything changed -- nah, nothing

Good for the occasional medium/long term trade but then again they only coincide when the whole market is going up anyway. Good for dividends - maybe

A growth company - come on tell me another one

[BlackPeter]

The guys at the London School of Economics would love the responses to todays announcement. I will point them to this.

Skellerup long term company performance is nicely summed up in a long term share price chart (below)

Skellerup is always gunna be a great company - but never delivers

Anything changed -- nah, nothing

Good for the occasional medium/long term trade but then again they only coincide when the whole market is going up anyway. Good for dividends - maybe

A growth company - come on tell me another one

Didn't we have similar discussions two (or was it three?) years ago around NPX? While I agree, that SKL is due to the nature of many industries they sell into more a cyclical than a "growth" company would I think that the new factory plus additional products for construction / automotive managed to shift the baseline for this cycle upwards.

Probably not a company to hold forever, but still think that they can and will do much better than what they did now, if mining and dairy start to "fire" again.

[winner69]

Didn't we have similar discussions two (or was it three?) years ago around NPX? While I agree, that SKL is due to the nature of many industries they sell into more a cyclical than a "growth" company would I think that the new factory plus additional products for construction / automotive managed to shift the baseline for this cycle upwards.

Probably not a company to hold forever, but still think that they can and will do much better than what they did now, if mining and dairy start to "fire" again.

If share price follows earnings the chart says all the previous changes to 'baseline' over the years have come to nought ...and there has been several. What's different this time around?

Forget about telling me how great an investment it has been since 2010 - nearly everything has been (inc Nuplex) and that's more market action than great Skellerup performance.

Glad you see that probably not a hod forever - so let the trader in you loose and trade the inevitable ups and downs between 130 and 180

Like Nuplex best outcome for Skellerup might be for them to be taken over

[Beagle]

Funny you mention that Winner as they did bounce a bit more than the rest of the market on the NPX and DIL takeover announcements on Monday...but back to reality now and an institution seems to have plenty to unload at $1.33 so it would appear that's the new normal for the time being.

[Snoopy]

Remember a good business can have a poor year, and a bad business can have a good year.
SKL is a very good business.
The only surprise to me was how poor NZ dairying was.I thought the consumables would have held up better.Can't see how farmers can keep putting off buying the liners.

I find myself agreeing with the 9am Percy. Not the 10am Percy that sold out an hour later.

If you look at the HY2016 Agri division notes in the presentation your dairy conundrum is explained.

From p2

----

Subdued NZ demand for dairy rubberware and footwear due to international milk price and resultant Fonterra pay-out. However liners and tubing remain an essential consumable.

----‒

From p6

Footwear mixed‒
NZ market slower than expected due to dairy market and dry weather

-----

So farmers are walking around with holes in their boots, even as they pipe up their cows with new liners as they are plumbing them them up to the milking shed. All udderly obvious when you read the detail :-)

SNOOPY

[percy]

I find myself agreeing with the 9am Percy. Not the 10am Percy that sold out an hour later.

If you look at the HY2016 Agri division notes in the presentation your dairy conundrum is explained.

From p2

----

Subdued NZ demand for dairy rubberware and footwear due to international milk price and resultant Fonterra pay-out. However liners and tubing remain an essential consumable.

----‒

From p6

Footwear mixed‒
NZ market slower than expected due to dairy market and dry weather

-----

So farmers are walking around with holes in their boots, even as they pipe up their cows with new liners as they are plumbing them them up to the milking shed. All udderly obvious when you read the detail :-)

SNOOPY

It would appear the non-deferrable liners are still being being deferred.

[xafalcon]

Sir Selwyn is buying up again, very large increase in his holding

[BlackPeter]

Sir Selwyn is buying up again, very large increase in his holding

Wow - another odd 6 million shares. He has certainly more "play money" than I have ... and he clearly must think that the company is at current price undervalued. 8 million dollars must be even for him a meaningful sum ...

Maybe he does know the company better than the sellers?

Edit:
.... maybe I should have read the full announcement before commenting. The newly acquired number of shares is not as huge as I first thought (though the number went up by that much, but this seems to be more an accounting issue). Still:

(6) On 18 February 2016 H&G Limited purchased 547,065 shares in Skellerup
on-market at an average price of $1.329 per share.

Sir Selwyn holds a 20% interest in H&G Ltd

[RTM]

The market doesn't seem to like the report

I wonder what this result means for PGW which I hold ? Not a sign of good things I suspect.
They "will be released to the NZX at approximately 8:30am on Wednesday 24 February 2016. "

[BlackPeter]

I wonder what this result means for PGW which I hold ? Not a good indicator I suspect.
They "will be released to the NZX at approximately 8:30am on Wednesday 24 February 2016. "

Not sure ... it is easier to delay maintenance of dairy liners and sealing (though it still might not be wise) than to stop feeding your animals. As well - PGW has a significant exposure to non dairy agriculture (wool, red meat, horticulture, pip fruit, wine), and many of these sectors are currently doing quite well.