NZSX50 - Good News!

[Billy Boy]

Black P
I dont altogether agree with you.
Many European Countries Are finding it hard to pay back debt now.
Greece !!!. Spain, Belgium, Italy etc.....
France is the interesting one.
If interest rates have to rise then they struggle more.
As i say .25 basic point rise wont hert too much , but more ?
We might have to agree to disagree old son
cheers BB
Rates are all based on the US$.

[couta1]

Very much as I see the market too.
I do not hold any of the overhyped shares you mentioned.
The earnings season should provide evidence that some companies are performing well,and are not overvalued.
I also expect a lot will increase their dividends.

I didn't think you would agree with Bunter re retirement stock Percy? As far as the likes of Xro/Peb/Dil are concerned I don't believe they are overhyped like they were a year or so ago and some of us believe they are good buying at current prices.

[MAC]

I agree. As with the growth stock correction early in 2014 after overinflating, I suspect there will be a similar, selective correction here for divvy yield stocks. "Patience" has been removed from Fed minutes and interest rates will start going sooner than later...

Yes, there seems to have been a kind of cyclical move last year from growth to yield.

When I look around at present for value it’s certainly not in dividend paying stocks any longer, cyclicals also remain fully or fairly valued, but some of the growth companies are looking well over corrected and really quite undervalued right now.

The offshore cash may flow out of yield stocks back to whence it came, local profit taking though may well flow back into growth I suspect.

In an otherwise fully valued market of cyclicals, investors may well be looking for intrinsic gains from growth rather than flat returns from cyclicals and perhaps falling returns in yield stocks.

[skid]

If people get hit on their Divi stocks,imo they are not going to be in the mood to speculate on growth stocks.....unless they well and truly grow--faith is out the window ,for now,and even more so if theres a divi stock correction.

[skid]

A rise in interest rates in the US is the final act in this bizarre experiment they have taken on--this is where ''the rubber meets the road'' so to speak

[Bobdn]

Does anybody feel like things are starting to get a little out of hand and we're perhaps due another correction?

Examples I hold;

1) CNU - Price now back at the same level as when it was paying a 10% dividend. Sure, uncertainty was factored in then, but to be back at that price already when uncertainty still looms is interesting IMHO.

2) HNZ - Great company and two bits of good news released recently. But look at the charts, the price has rocketed on mediocre volume.

Perhaps we're due another 15% shakedown?

I know what you mean. I've been thinking the same thing recently. For me, it's spark. I'm up 53% on that stock alone in a year. My managed funds have returned 22% PA for the last three years. I bought ANZ on Christmas eve last year - in 5 weeks it has gone up 13.5%.

I'm going to have to take some money off the table soon, for my own sanity.

Edit: also own CNU - I see it's just gone to 2.88 - um...ok.

[Bjauck]

The NZ50 may be fully valued but that may not be true of SPK and CNU.

At the end of March 2012 CNU was at $3.69 and TEL (SPK) was at $2.44. Over about 3 years SPK sp has gone up about 43% and CNU has dropped about 23%.

Since March 2012 the NZ50 has risen about 65% (including dividends) so even SPK has underperformed the index. Three years ago SPK was still recovering from being the arch villain so despite being up 53% in a year does not necessarily mean that it is now over-valued. CNU on the other hand still faces regulatory uncertainty & vilification from other telcos and may still be undervalued on a long-term basis. Sentiment has been a big driver of SPK and CNU prices. DYOR.

Disc. LT holder of both SPK and CNU

[bunter]

The NZ50 may be fully valued but that may not be true of SPK and CNU.
At the end of March 2012 CNU was at $3.69 and TEL (SPK) was at $2.44. Over about 3 years SPK sp has gone up about 43% and CNU has dropped about 23%.
Since March 2012 the NZ50 has risen about 65% (including dividends) so even SPK has underperformed the index.

Better allow for SPK's dividends - approx 42c after tax - and reinvestment in SPK.
So approx 65% return from SPK too since March 2012.

Or use the NZ50 capital index, which has gone up 45%. That's slightly unfair on SPK, which is a high dividend payer.

[Bjauck]

Better allow for SPK's dividends - approx 42c after tax - and reinvestment in SPK.
So approx 65% return from SPK too since March 2012.

Or use the NZ50 capital index, which has gone up 45%. That's slightly unfair on SPK, which is a high dividend payer.

'
Thanks for that...in my head I had thought I thought I had made sufficient allowance for dividends when saying it was an underperformer! I guess the trap of using a gross index as the main benchmark when making a quick comparison. Even so, for SPK to be a market performer in that three year period, considering the comparative negativity surrounding the stock three years ago, would prima facie indicate to me that SPK is no more overvalued than other constituent stocks.

[bunter]

'
Thanks for that...in my head I had thought I thought I had made sufficient allowance for dividends when saying it was an underperformer! I guess the trap of using a gross index as the main benchmark when making a quick comparison. Even so, for SPK to be a market performer in that three year period, considering the comparative negativity surrounding the stock three years ago, would prima facie indicate to me that SPK is no more overvalued than other constituent stocks.

FWIW I think Spark is about fairly valued now (system valuation 3.72), given a growth rate of 6% now.
Back in 2012 I had it at 3%.

I rate SPK's management and maybe they'll give shareholders reason to use a higher growth factor.