NZSX50 - Good News!

[noodles]

Did an exercise to see how far the NZX10 will have to fall to get to 2009 levels from a pe and yield perspective.

From a div yield perspective, it needs to drop about 9.6%
From a pe perspective, it needs to drop about 28%

		2009		2015
		pe	yield	pe	yield
Fletcher Building Ltd	FBU	9.8	5.78	12.92	4.91
Spark New Zealand Ltd	SPK	10.42	8.79	14.98	6.29
Auckland Intl Airport Ltd	AIA	18.61	5.09	35.54	2.07
Ryman Healthcare Group Ltd	RYM	13.25	3.72	28.1	1.8
Fisher & Paykel Healthcare Corporation Limited	FPH	26.78	3.92	34.29	2.07
Meridian Energy Ltd	MEL
SkyCity Entertainment Group	SKC	12	5.78	15.2	5.05
Sky Network Television Limited	SKT	18.32	3.37	11.51	5.75
Contact Energy Ltd	CEN	12	4.79	15.2	9.66
Infratil Ltd	IFT
		15.1	5.2	21.0	4.7

Did not include IFT because it was loss making
Did not include MEL as it was not listed

[percy]

So which indicator do you think is the best guide,PE or yield.?
As a matter of interest what were interest rates/deposit rates in 2009.?
I must admit I looked on Saturday at the yields of a number of stocks I hold;AIR 5.14%,EBO,4.12%,SCL 6.49%,HNZ 7.10%.MEL 7.17%,SKL 6.95% and came to the conculsion I did not worry me if the market was closed for 3 or 4 years, so long as I continued to receive increasing fully imputated divies.

[winner69]

One of Aust papers had a bit about it being the recent new investors who deserted bank term deposits and went looking for yield that and they are now experiencing something new, like seeing their capital shrink. They maybe are the ones who will continue to sell as they desert the market forever. The grass wasn't really greener on the other side of the fence

[winner69]

Did an exercise to see how far the NZX10 will have to fall to get to 2009 levels from a pe and yield perspective.

From a div yield perspective, it needs to drop about 9.6%
From a pe perspective, it needs to drop about 28%

		2009		2015
		pe	yield	pe	yield
Fletcher Building Ltd	FBU	9.8	5.78	12.92	4.91
Spark New Zealand Ltd	SPK	10.42	8.79	14.98	6.29
Auckland Intl Airport Ltd	AIA	18.61	5.09	35.54	2.07
Ryman Healthcare Group Ltd	RYM	13.25	3.72	28.1	1.8
Fisher & Paykel Healthcare Corporation Limited	FPH	26.78	3.92	34.29	2.07
Meridian Energy Ltd	MEL
SkyCity Entertainment Group	SKC	12	5.78	15.2	5.05
Sky Network Television Limited	SKT	18.32	3.37	11.51	5.75
Contact Energy Ltd	CEN	12	4.79	15.2	9.66
Infratil Ltd	IFT
		15.1	5.2	21.0	4.7

Did not include IFT because it was loss making
Did not include MEL as it was not listed

Interesting stuff noodles

So if PE ratios generally fall to more reasonable levels (historically so) we could see heaps more downside

[Hoop]

Fibonacci Retracements can show approximate ends to panic drops (Note: 50% and 100% are not true fibs)......Usually a >20% drop signals a bear market cycle (~4800)
the second chart shows a possible future... the boundary limits the index can waver round in

[Beagle]

Good work Noodles.

P.S. Just had another look at the relative PE's of RYM....WOW...I reckon some of these stocks on a PE of ~30, especially SUM without such a long and well established track record of growth or even worse stocks like XRO which has nothing but a bunch of talk supporting its SP are going to get their wings seriously clipped.

[Hoop]

Market opened at 5471 -2.4% the spooky fib is the 61.8% one.....so lets see if the panic behaviour ends here....near 5400

[ratkin]

Good work Noodles.

P.S. Just had another look at the relative PE's of RYM....WOW...I reckon some of these stocks on a PE of ~30, especially SUM without such a long and well established track record of growth or even worse stocks like XRO which has nothing but a bunch of talk supporting its SP are going to get their wings seriously clipped.

You never miss an opportunity to have a go at SUM

[Beagle]

You never miss an opportunity to have a go at SUM

Nah I missed a couple lately...just calling these ~30 PE stocks as over-priced as I see them. Bundle in AIA FPH and a few others if it makes you happy...all probably deserve a good reality check...I mean look at AIA the other day, was it yesterday...so much is happening at the moment its hard to keep up. What was it ? a 4% profit rise and the PE is mid 30's...bloody ridiculous IMO. Look at the PE expansion in the comparatives that Noodles posted...totally unwarranted in many cases.
The Chinese market as a whole after this correction is on a PE of ~17 and yet some of our stocks are on close to double that Doesn't make sense...just saying.

[Onion]

P.S. Just had another look at the relative PE's of RYM....WOW...I reckon some of these stocks on a PE of ~30, especially SUM without such a long and well established track record of growth or even worse stocks like XRO which has nothing but a bunch of talk supporting its SP are going to get their wings seriously clipped.

Holders of SUM are lucky then that they have more SP gain over the last year or 2 to give up (compared to RYM).