THL - Tourism Holdings

[flyingfox]

Is NZX not update the price on reporting day?

[winner69]

The issue is getting an economic return on those assets. I drove past the THL head office in Beach Rd today, the blackboard advertises Campervans from $16/day.

I seem to have a morbid fascination with THL as something makes me keep them on the watchlist ..... years ago made heaps on them so maybe looking at another opportunity .... maybe, just maybe, they might actually make some reasonable money to boost the shareprice.

Current shareprice does look cheap ... like less than 50% of both book value and sales

However the problem is what you say JR ... making an economic return on capital employed.

Even last years 'great' result is a disaster really. EBIT of $10m and then allowing for tax they made an operating profit of $7m .... but **** oh day it needed $230m of invested capital (debt plus equity) to make that $7m

Say their cost of capital is 10% which would result in a capital chage of $23 and you come up with a figure of a $15m economic loss .... value destroyed in other words

Soem analysts use a thing called MVA to value a company ..... MVA being the difference between the company's equity and its market cap .... if a company is generating real wealth the MVA is the NPV of that real wealth (returns in excess of its cost of capital)

THL equity is $180m odd and its market cap is $80m .... so the forward looking market is saying that THL will destroy $100m of shareholder in the future .... sound horrendous eh .... but based on a $15m economic loss in 2010 extarpolated into the future that $100m sounds about right

As JR says they cant seem to make any real economic return on all those assets employed .... and that has been a problem for many years .... reality is that today the company is probably only worth $80m

Based on the current capital employed THL really needs to make $33m plus EBIT to cover their cost of capital ... thats $23m more than they made this year

Take it off your watchlist winner I keep telling myself .... but that morbid fascination won't let me stop keeping my model of THL performance being updated .... it really is a fascinating study of shareholder wealth destruction over many years

Betcha shareholders who stayed with the ship are cursing they didn't accept the $2.80 those cowboys offerred a few years ago to put this dog out of its misery once and for .... no wonder they went broke ....... but then again good money was made by some anyway when the bid failed.

maybe, just maybe some money to be made sometime but sentiment doesn't seem to have improved

[Sauce]

I really enjoyed this post Winner. Perfectly rational! The quick and dirty way to come to the same conclusion (that they are destroying wealth) is simply to look at the average ROE over last 9 years..

maybe, just maybe some money to be made sometime but sentiment doesn't seem to have improved

Don't hold your breath!!

Regards,

Sauce

[scamper]

is it possible that this company's awful days are a-changing?
both the 3-year and 6-month downtrends are broken
30-day ma has crossed up through the 60-day ma.
bollies diverging on the uptrend
rsi sharply up.
TA starting to suggest potential...

[bull....]

Looking good technically it has maintained the uptrend from its lows and the the recent correction bottomed around mid low 70c range where some decent buying has been evident. Also the big seller looks like they have finished rsi a little high may see a slight breather but thl entering their busy period so lets hope those tourist numbers keep getting better and thl can improve that return on capital , ive got some spare time soon so il post some indepth analysis on thl for anyone interested.

[Silverlight]

Nice drop, I will be bidding at 0.73 in case it gets that low.

[bull....]

I was lucky enough to sell my trading quota last week but still hold my long term lot so like others will look to re enter on extreme weakness.
As mentioned on another post watch those macro issues on this share.

[bull....]

Given the primary reason for the profit downgrade is down to the strength of AUD and NZD ... I had a quick skim over other NZX stocks that would be affected. Makes for troubling analysis ...

Currencies are very volatile and I guess so are consumer holiday patterns so does this make THL a traders dream now.

[scamper]

is it possible that this company's awful days are a-changing?
both the 3-year and 6-month downtrends are broken
30-day ma has crossed up through the 60-day ma.
bollies diverging on the uptrend
rsi sharply up.
TA starting to suggest potential...

Yeah, well, fundamentals trump TA every time.
Besides, if scamper had truly considered the five-year chart, the recent slump would just be same-old same-old.
the one-year chart did look promising in early october though
hope everyone here did better research than i did.
however, i didn't buy, but did hold. paws crossed!

[macduffy]

Yes, THL has never found a place in my long term portfolio largely for that reason - and the capital-intensive nature of the business.

But should be good for a trade again at some stage as Rugby World Cup fever starts to take hold and the media starts talking about the (short term) boost to NZ tourism!