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  1. #1411
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by winner69 View Post
    Hard to get enthused over Tower's profit trend

    In spite of all the rhetoric about all the exciting things they are doing profit over three years basically gone nowhere-

    F19 $27.4m
    F20 $28.4m
    F21 $26m expected
    And that's precisely why I put them on a no growth PE of 10.5 (assuming 10 year Govt stock rate at 2%) x mid point of this years earnings of 6.1 cps = 64 cents per share.

    Talk of profit growth is just that, "talk" and I ascribed no value to that probability. Was a lot of talk about Tower at the recent Auckland ST gettogether...I just listened and kept drinking Tui's. I just can't get warm about it. Unusually some extreme weather event happening every now and again, often more than once a year.
    Last edited by Beagle; 18-05-2021 at 02:59 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.

  2. #1412
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    Quote Originally Posted by Beagle View Post
    And that's precisely why I put them on a no growth PE of 10.5 (assuming 10 year Govt stock rate at 2%) x mid point of this years earnings of 6.1 cps = 64 cents per share.

    Talk of profit growth is just that, "talk" and I ascribed no value to that probability. Was a lot of talk about Tower at the recent Auckland ST gettogether...I just listened and kept drinking Tui's. I just can't get warm about it. Unusually some extreme weather event happening every now and again, often more than once a year.
    Firstly, welcome back Beagle, good to hear your views again.

    Secondly, if you ascribe a fair value of 64c per share on the basis of Tower being no growth company, why not add on the 30 odd cents per share that the company has in cash That is the cash the company is holding over and above what is required to operate and generate the no growth $26m pa profit (actually there is probably more cash surplus than that)
    That cash could be returned to shareholders in some form and still leave a company with the underlying $0.64 share value

  3. #1413
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    Quote Originally Posted by Poet View Post
    Firstly, welcome back Beagle, good to hear your views again.

    Secondly, if you ascribe a fair value of 64c per share on the basis of Tower being no growth company, why not add on the 30 odd cents per share that the company has in cash That is the cash the company is holding over and above what is required to operate and generate the no growth $26m pa profit (actually there is probably more cash surplus than that)
    That cash could be returned to shareholders in some form and still leave a company with the underlying $0.64 share value
    exactly need to factor in the cash , also what they do with the cash. share buyback adds to eps.
    bull
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  4. #1414
    Speedy Az winner69's Avatar
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    Quote Originally Posted by bull.... View Post
    exactly need to factor in the cash , also what they do with the cash. share buyback adds to eps.
    Could buy back a third of the company with that much cash ...wow
    . To say extreme valuations are “justified” is also to say that long-term market losses are “justified.” .

  5. #1415
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by Poet View Post
    Firstly, welcome back Beagle, good to hear your views again.

    Secondly, if you ascribe a fair value of 64c per share on the basis of Tower being no growth company, why not add on the 30 odd cents per share that the company has in cash That is the cash the company is holding over and above what is required to operate and generate the no growth $26m pa profit (actually there is probably more cash surplus than that)
    That cash could be returned to shareholders in some form and still leave a company with the underlying $0.64 share value
    Hi Poet,
    Thanks for your kind words, much appreciated. I just valued it based on earnings. If they have room to move and do engage in some sort of special dividend or buy-back then I guess that's going to be value accretive but if its so obvious as a way to add shareholder value why don't they do something ?
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.

  6. #1416
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Beagle View Post
    Hi Poet,
    Thanks for your kind words, much appreciated. I just valued it based on earnings. If they have room to move and do engage in some sort of special dividend or buy-back then I guess that's going to be value accretive but if its so obvious as a way to add shareholder value why don't they do something ?

    All that cash earning a pittance at the moment ...$600k in first half they say
    . To say extreme valuations are “justified” is also to say that long-term market losses are “justified.” .

  7. #1417
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    Quote Originally Posted by winner69 View Post
    All that cash earning a pittance at the moment ...$600k in first half they say
    insurance companies need quite good liquidity given the possibility of a big risk event occurring.
    As has been said these seem to happen more than expected.
    For clarity, nothing I say is advice....

  8. #1418
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    If you add the cash (80m) and investments (237.4m) from last FY report together, you have $.77/share real assets backing the company up without any consideration of revenue.

  9. #1419
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    Quote Originally Posted by Antipodean View Post
    If you add the cash (80m) and investments (237.4m) from last FY report together, you have $.77/share real assets backing the company up without any consideration of revenue.
    Eh - what about the liabilities?

  10. #1420
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Balance View Post
    Eh - what about the liabilities?
    Won’t be any claims so no worries
    . To say extreme valuations are “justified” is also to say that long-term market losses are “justified.” .

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