Silver Chef SIV

[Huang Chung]

It got a plug from Tim Kelley of the Montgomery Fund on Tuesday night's airing of Your Money Your Call.

[NZSilver]

Thanks KW, much appreciated

[percy]

Since the AGM presentation that forecast EPS growth of 10% for FY14 the price has been in decline, touching down today on its 200 day MA (which might make it the second stock this week I need to sell :-(. Will wait to see if it bounces off the 200 day MA, but the lack of buyer interest is a worry as its killing the share price at the moment. Offloading a big parcel of shares without hammering the price down further is going to be difficult.

It is a little expensive (P/E of 16) considering its forecast of 10% eps growth, but not hideously so, and with growth opportunities in new markets such as NZ and Canada, there is a lot of growth still to come. Current dividend yield of 4.2% which is respectable.

I'm crossing my fingers and hoping this one picks up some buyer interest soon. Come on Mark and Percy, help me out :-)

NO WAY.!!!
I have an expensive evening coming up!
It is going to cost me a fortune to keep your wine glass filled on the 28th.!!!

[mark100]

KW, my initial instincts are to avoid after the initial downgrade because they are often followed by further downgrades. I think it was in either the AGM or FY13 result that SIV first alluded to slowing growth and obviously things have deteriorated from there.

My preference at the moment would be for FXL where I have been waiting for a re-entry. It is also under its 200DMA but has re-affirmed its forecast for FY14, made a FY15 EPS accretive acquisition and at $4.20 is trading at 15x cash FY14 EPS. At this stage I would prefer the safety of FXL at 15x after reaffirming its forecast rather than SIV at 13x after downgraded earnings

[noodles]

KW, my initial instincts are to avoid after the initial downgrade because they are often followed by further downgrades. I think it was in either the AGM or FY13 result that SIV first alluded to slowing growth and obviously things have deteriorated from there.

My preference at the moment would be for FXL where I have been waiting for a re-entry. It is also under its 200DMA but has re-affirmed its forecast for FY14, made a FY15 EPS accretive acquisition and at $4.20 is trading at 15x cash FY14 EPS. At this stage I would prefer the safety of FXL at 15x after reaffirming its forecast rather than SIV at 13x after downgraded earnings

It was only 18 months ago, SIV was trading on a pe of 10 and was GROWING earnings. I think we have all become too comfortable with much higher valuations.

[Buffett Jr]

Half yearly results released today.

1H13		1H14		Change
Revenue	$53.6m		$67.4m		+25.9%
Rental assets (at cost)*	$257.4m		$274.5m		+6.6%
NPAT	$5.9m		$6.5m		+9.5%
Underlying NPAT	$5.9m		$5.8m		-1.4%
Net operating cash flows	$36.7m		$40.7m		+10.9%
Basic EPS	21.9cps		22.4cps		+ 2.3%
Dividend (fully franked)	14.0cps		14.0cps		unchanged

[mark100]

I almost bought on the result but it's rare for growth to quickly return back to normal after a disruption. Might wait for the next earnings update...

[Buffett Jr]

You are both looking ahead only to next year. I prefer to look at companies like Silver Chef and see where they are likely to be in 5+ years time.

The expansion into non hospitality (Go Getta) and overseas (Canada and New Zealand) is having a few speed wobbles at present but the long term future of the company is very promosing with these future growth and diversification opportunities. The changes in management recently I think are good for the company providing they find the right person to fill the CEO shoes.

I see you sold recently KW, was this before or after the drop from $8 to $5.

[mark100]

You are both looking ahead only to next year. I prefer to look at companies like Silver Chef and see where they are likely to be in 5+ years time.

The expansion into non hospitality (Go Getta) and overseas (Canada and New Zealand) is having a few speed wobbles at present but the long term future of the company is very promosing with these future growth and diversification opportunities. The changes in management recently I think are good for the company providing they find the right person to fill the CEO shoes.

I see you sold recently KW, was this before or after the drop from $8 to $5.

How long you been investing for? My strategy has worked very nicely for 15 years thanks. I would be happy to compare returns with you over that period.

Buffett buys whole companies and can wait out a slow periods and can influence how the company is run. My guess is you are a portfolio investor like the rest of us. You own a very small stake, have no control and can't access the companies cash flow other than via dividends. Reading all the Buffett books in the world won't change that

[Buffett Jr]

How long you been investing for? My strategy has worked very nicely for 15 years thanks. I would be happy to compare returns with you over that period.

Buffett buys whole companies and can wait out a slow periods and can influence how the company is run. My guess is you are a portfolio investor like the rest of us. You own a very small stake, have no control and can't access the companies cash flow other than via dividends. Reading all the Buffett books in the world won't change that

Hi Mark,

I've been investing for 4-5 years now.

I never said that I own whole companies, I'm just sharing my way of investing.