BLT - Blis Technologies

[Maggie]

This is all great news! Wish I had been at the meeting, would have been nice to have been privy to all this good stuff in person. I have been quietly believing (hoping) in this company since Barry took over.
I'm a baby sharetrader and not too up with the buying and selling. Has anyone got any ideas about a good sell price? I see that Chippie is talking 20c, is that realistic? Also, what about those Preference shares? A few sold at $2.00 yesterday which seems very high and there now seems to be no buyers or sellers on the NZX.
Love the positivity that is coming through on this board now, long may it last!

[Bobby_Fischer]

Maggie - Prefs should trade around 25 times the price of the ords, that being the minimum conversion ratio (should be a bit more, because Prefs come with income). So just 8 cents for the ords is equivalent to 200 cents for the Prefs.

Chippie I reckon a few holders will want out around 7.5 cents. The latest update is still all blue sky stuff and no hard numbers, with break even STILL "around the corner". So people who bought into the 2007 RI may see this as the time to de-risk and exit at cost - i.e. around 7.5 cents - while there is some buying interest, as this has been about the first opportunity to do so.

A lot is obviously happening behind the scenes and I wonder, as jonu does, why we are not getting more frequent updates. Don't the continuous disclosure rules require any events impacting the value of the company to be announced as soon as practicable?

[simla]

Personally, I would not be choosing a price to sell at, but a time. How long would you predict strong growth from this company based on the currently available news? If so, then selling before that time would only make sense if you wanted to limit losses from future unexpected bad news (whether Blis or the markets more widely), or if you wanted cash in the meantime, or if you had stronger growth prospects somewhere else - or if you think you're smart enough to dart in and out of shares at the right time.

Or, you may be owning this share for future cash flow (ie dividends) rather than capital gains, as I am. Future dividends from this company look pretty good for a long time to come as far as I can see. Holding long term will take some strong nerves, however, as the share price is no doubt in for some dramatics ups and downs over the next few years.

ps. IS anyone here for the long haul like I am?

[Cannibal]

I am holding for the long term. This seems a no-brainer to me - they have the right product(s), the right market, the right management team but most of all they have a distribution network to die for - that is the hardest part. 20 cents is just the beginning IMO.

[Maggie]

I'm probably holding too. Will see what happens though. I managed to get my average down while it was cheap so am doing quite nicely already! Also took a punt and took up the preference shares so have my fingers crossed that it is onwards and upwards from here.

Thanks for the information Bobby. I am always a bit worried that if I ask these things of my sharebroker, they will think I am stupid... At least on here I can be anonymously stupid!

[simla]

Interesting to watch the buyers versus the sellers. The sellers now are presumably mostly either needing cash or going for realised capital gain.

But if you read Victorian novels like Pride and Prejudice, they didn't talk about people's assets, but rather what income they had - ie dividends, not capital gains. And I read recently that that was still the case in at least 1950. Personally I believe that is where we are heading back to, simply because we are running out of bubbles, leaving only heavily undervalued companies for capital gain (fairly rare). Anyone care to suggest NZ companies that will look good under that dividend model? Obviously I'm picking Blis to do well there, for example.

As for the Blis share price, it looks like it might start drifting after the recent excitement.

The half year results are due in only about 15 weeks though. I agree that the recent news could be read as "still around the corner" - and obviously very many have read it that way. But, given the understatement that has been the hallmark of Blis news, I think it would be possible to read it the other way too. Was anything actually said denying that Blis was currently running at a profit? We know that there are several income streams that were not there last year (Japan, Taiwan perhaps, more new manufacturers in the US and repeat orders, M18, and the new research contract, more from NZ, if not others), and we also know that the declared last half-year loss was only $77,000 (full year loss minus prior half year loss). Also, interesting to note that "an Asia-wide business development strategy is in place and follows a similar commercial template as that used for North America" (press release). The US model involved rolling out manufacturers in fairly short order, and there are probably a whole lot of those "Asia-wide". Against that, the half year finishes in only 8 weeks, when momentum may still only be building on many of those fronts, and the preference shares will cost. Could be interesting.

[mccollr]

I agree Simla that income may be where it is at in the future.
Have a look at CYT. Trading at 14 cents yesterday and this from their half year report. "The company today said revenue for the six months to the end of June rose 2 percent to $7.75m, with an interim dividend of 0.5 cents per share to be paid." Telecom is often mentioned as a good dividend earner as well.

By that way what programme do you use for seeing the market depth. (Buyers and sellers) I use ASB as my online trader but that part is a bit week.

Rod

[simla]

Thanks, Rod. I'll look more closely at CYT. I use Direct Broking.

[jonu]

Interesting perspective Simla, Mr Darcy & all that, but I think things are a little different now, particularly with upwardly mobile people emerging from anywhere you can look, including internationally, and those trying to get further up the ladder rapidly will always cash in on a good book profit.

I personally am on approx 130% lift on my holding but am in for at least the medium term, maybe cashing in as cashflow reuires. I followed the Warren Buffet maxim of being greedy when others are fearful and made something of a pig of myself at 3.6 average but believe in the longterm prospects here.

[simla]

So, you're that investor we hear about from time to time - the one who manages to buy big, at the market bottom, in the hottest stock in town. Are you looking to buy Pemberley, then...? Nice one. There will be one or two others in this group who sound like they might have done nearly that, I think, well done guys, and a lot of others who will nevertheless be looking to do quite well anyway now that the future is looking so bright.

Not entirely sure that times have changed since Darcy. Yes, people will certainly always be willing to sell out and move on to the next investment, but the current circumstances have shown a lot of people to be swimming naked with the tide going out by doing that, as your friend Mr Buffet described it. The latest prediction I read is for a "WWWW" shaped recovery, which is certainly a possibility. If so, people will get sick of being burnt on capital gains. But, yes, if things just pick up again, the game will certainly resume.