Skellerup (SKL) Fundamentals

[sb9]

Didn't know Trump's nephew was into Skellerup, but all good. Wait for the twitter post for it all to go viral. Buy buy buy!

SNOOPY

Errr..apologies meant Sir Cushing....must be that Trump halo affecting the world these days

[macduffy]

What a lot of discussion around a stock that few posters appear to hold!

A question - when the markets for your two major product groups take a hit what other option does a company's management have to grow earnings in the short term? Remember, this is a manufacturer of specialised industrial rubber products.

Disc: Yes, I hold a few.

[Snow Leopard]

So H1 NPAT down 7% but H2 gunna be up 20%

That's good

Gunna sell a lot of gumboots.
Looks like the market likes that 20% per annum future growth .


Best Wishes
Paper Tiger

[Snoopy]

Year	Dividends	Dividend Total
2012	4.0c+3.0c	7.0c
2013	5.0c+3.0c	8.0c
2014	5.0c+3.5c	8.5c
2015	5.0c+3.5c	8.5c
2016	5.5c+3.5c	9.0c
Total		41.0c

Averaged over 5 years, the dividend works out at 41.0/5 = 8.2c (fully imputed).

So based on a 7.5% gross yield, fair value for SKL is:

8.2 / (0.075 x 0.72) = $1.52

I have updated my valuation using the latest five years of 'rolling data'. It is always a bit of a judgement call doing this. I have to ask myself if the data from FY2012 is still representative. In the case of PGW (as worked through on the PGW thread) I would say 'yes'. In the case of SKL I would say 'no'. I think the SKL growth plan is well enough bedded in to suggest that dividends will not regress to FY2012 levels. So what does dropping the FY2012 dividend payments and adding the FY2017 dividend payments do for my valuation?

Year	Dividends	Dividend Total
2013	5.0c+3.0c	8.0c
2014	5.0c+3.5c	8.5c
2015	5.0c+3.5c	8.5c
2016	5.5c+3.5c	9.0c
2017	5.5c+3.5c	9.0c
Total		43.0c

Averaged over 5 years, the dividend works out at 43.0/5 = 8.6c (fully imputed).

So based on a 7.5% gross yield, 'fair value' for SKL is:

8.6 / (0.075 x 0.72) = $1.59

Now using my plus and minus 20% range to get a feel how the SKL share price might behave at the top and bottom of its business cycle.

Top of Busines Cycle Valuation: $1.59 x 1.2 = $1.91
Bottom of Busines Cycle Valuation: $1.59 x 0.8 = $1.27

At close to $1.50, I would put SKL as a reasonable 'accumulate' proposition, particularly as it is still cum the 3.5c dividend up until March 10th.

SNOOPY

[Jantar]

Looking at today's trades, would anyone have guessed that SKL is ex div today? Looks like the market simply hasn't reacted at all.

[sb9]

Looking at today's trades, would anyone have guessed that SKL is ex div today? Looks like the market simply hasn't reacted at all.

So true, am expecting this to slowly creep back to 160s over next few weeks..

[percy]

So true, am expecting this to slowly creep back to 160s over next few weeks..

Yeah right.!

[BlackPeter]

Just for the record ... sold out given the ongoing "flirtation" with the MA100 and in my view limited upwards potential (forward PE of 13 and hardly any growth).

Still think it is a good company ... and plan to come back when the price is right.

[Beagle]

Just for the record ... sold out given the ongoing "flirtation" with the MA100 and in my view limited upwards potential (forward PE of 13 and hardly any growth).

Still think it is a good company ... and plan to come back when the price is right.

Duly noted. Couta1 also noted in a recent post, (not in the AIR thread), that he no longer holds any AIR shares.
Disc: Still holding my AIR shares as a modest part of a well diversified portfolio.

[sb9]

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