Skellerup (SKL) Fundamentals

[Phaedrus]

Perhaps your data excludes the 3.5m crossed before open at 67cps on 2/7/10?

It certainly appears that way. I see now why you called it a "dubious-looking" step and would agree with that assessment. Overall, SKL is still looking Bullish.

[h2so4]

No not real Lizard

I was just backing your fundamentalist judgement as opposed to say a chartists but it now seems they are both in alignment

[Lizard]

Ah, well thanks for the vote of confidence, though you may not need to choose whose judgement to follow - since your 2m bid will probably confirm the break of resistance!

Actually, the only time you really need to choose between FA and TA is when you're stuck in a trade where the two don't agree... then you get to show your true colours.

[Snoopy]

From what I've seen, analysts are behind the ball on this one,

You must have woken John Cairns of Forsyth Barr from his nap. SKL is the "Daily Sharechat" feature today. He is forecasting a 10-20% lift in EBIT for FY2011. Not sure if this comparison includes the $2.4m abnormal cost in FY2010. If it does, that means forecast profit is little better than flat.

JC reckons the industrial division is pulling the company up through the 'going global' strategy. If so the company could reverse if the recession double dips.

SNOOPY

[Lizard]

YNot sure if this comparison includes the $2.4m abnormal cost in FY2010. If it does, that means forecast profit is little better than flat.

He has upgraded forecast from $13.3m to $15.3m NPAT for 2011 following the recent SKL announcement. The company has not updated their own forecast for 2011 which (in Feb) was said to be "in the vicinity of $14m" and "not reliant on a significant market uplift". However, we shall see.

[h2so4]

Ah, well thanks for the vote of confidence, though you may not need to choose whose judgement to follow - since your 2m bid will probably confirm the break of resistance!

My 2m trade may not manifest today.

[Snoopy]

He has upgraded forecast from $13.3m to $15.3m NPAT for 2011 following the recent SKL announcement. The company has not updated their own forecast for 2011 which (in Feb) was said to be "in the vicinity of $14m" and "not reliant on a significant market uplift". However, we shall see.

$14m/190m= 7.4cps (FY2010), $15.3m/190m= 8.0cps (FY2011)
At an SKL share price of 71c that represents a PE of 9.6 (FY2010) and 8.9 (FY2011)

Comparison with RBD:

$19.7m/97.3m= 20.2cps (FY2010), $26.0m/97.3m= 26.7cps (FY2011). At an RBD with a share price of $2.35 that represents a PE of 11.6 (FY2010) and 8.8 (FY2011)

While SKL may be a good investment, RBD looks better (still!)

SNOOPY

[h2so4]

No comparison. RBD is way,way,way,way better

[Snoopy]

No comparison. RBD is way,way,way,way better

RBD has a similar forward PE valuation, lower debt, higher forecast yield and is likely more resilient in a downturn. It is not always easy to compare companies in different lines of business though. In my eyes RBD is the slightly better investment prospect at today's prices. But I wouldn't go further than that.

SNOOPY

[h2so4]

RBD has a similar forward PE valuation, lower debt, higher forecast yield and is likely more resilient in a downturn. It is nor always easy to compare companies in different lines of business though. In my eyes RBD is the slightly better investment prospect at today's prices. But I wouldn't go further than that.

SNOOPY

Hi Snoopy
I only look at cash, (owner earnings), can't remember the last time I looked at a PE.

Believe it or not RBD had owner earnings of 42m last year, (thats a 21.5% cash yield), and a cash return on invested capital of 78%.

I can only estimate SKL, (full year not out), owner earnings 18m, cash return on invested capital 13%, thats a cash yield today of 13.2%

Sure we can't compare business models but we don't have to, just take the one offering the biggest discount.

RBD looks set for a bumper year. What are they going to do with all that cash?