CHI - Channel Infrastructure Ltd (NZR)

[BlackPeter]

if they pay a div then how are they going to reduce debt?

Easy .... just look into the earnings matrix you were referring to earlier ...

BTW - At last Balance date they had a 41% ratio liabilities to assets ... sure, still above their long term policy, but not really a huge amount of debts compared to other organisations.

I guess one more month to wait and than we all will have new numbers to work with ...

[traineeinvestor]

if they pay a div then how are they going to reduce debt?

They wouldn't - the FNZC forecast is that almost all of the operating cash flow for the current year will go to CAPEX. As much as I like my dividends, if its a choice between getting a dividend and reducing debt, I'm happy to pass on the dividend. However, given last year's dividends and the earlier , more optimistic, forecasts it's a fair bet that there are a number of investors who purchased for yield who are going to be disappointed.

At current prices and expectations, I'm sitting on my shares but would consider topping up if the share price gets closer to the NZD2.00 mark (not a prediction).

[golden city]

even with the downgrade it is from 3.65 to 3.05.., still a big gap of safety

[BlackPeter]

Article in NBR:

http://www.nbr.co.nz/article/market-...drops-b-191963

New Zealand Refining was the worst performer (in yesterdays stock market - inserted by me), down 4.3 percent to $2.46. Deutsche Bank has cut its price target to NZ$3.05 from NZ$3.65.

"That drop follows some analysts downgrading the earnings potential going forward for the company," Williamson said. "The company's fortunes lie with the refining margins, and a number of analysts are starting to say it could be the end of the good times in the short term."

The downgrades came after the refinery said it had a gross margin of US $6.26 per barrel in its throughput and margin report for May/June, at the top end of the range, while throughput for the period was 6.8 million barrels.

"The report was quite reasonable, but some analysts are saying margins have now peaked, so it will be interesting to see if they're right or not," Williamson said. "That share price went up pretty quickly and it's come back just as quick - it rallied throughout 2015, and has come back in 2016 - but it is very much a cyclical stock and it can move pretty quickly both ways."

Hmm - some analysts think that the refining margins might go down in the short term. Probably the same analysts who predicted 18 months ago oil never to dip below $100 again ... and who predicted 12 months later that oil will come down below $20;

They didn't mention dividend cuts, though - where was this info coming from?

[golden city]

If they are right. Why they have to downgrade it.

[golden city]

They didn't get it right the first time. Can't trust them the second time

[Nasi Goreng]

They didn't get it right the first time. Can't trust them the second time

Its one thing to say a stock is undervalued, its another to go from a target price of $3.60 down to say $2.20. People would question the value of their broker if such radical price reductions were in place. In my mind, a downgrade is a downgrade and should be seen as one.

[cdonald]

Interesting article on refining margins from another refinery that processes heavy oil (One reason for having hydrocracker).

http://www.livemint.com/Industry/tMg...ng-margin.html

[macduffy]

Morgan Stanley analyst says "world is heavily oversupplied with gasoline".

http://www.smh.com.au/business/energ...25-gqdmuv.html

[BlackPeter]

Touched yesterday the 240 a second time and going today up again with quite healthy trading volumes. RSI hovering somewhere indecisively in no-mans-land.

Obviously - SP well below any MA worthwhile talking about ... but still - I am wondering whether the people who know more about charting than I do (Hoop?) can see anything else in the pattern?

Personally I think we reached rock bottom ... but we will probably need reasonable financials (and a dividend) to get the SP up again. What do others think?

Discl: holding - i.e. biased ...