ABA Abano health

[h2so4]

Yes, but you would compare your dividend yield to the current value of your investment.

So it would be irrelevant what your investment has done up to now, when you are talking about ongoing yield gain.

I almost tear my hair out when i hear people talk about their "yield to purchase price."

For example you had Coke shares worth 5000, they have now grown to 10,000. Current dividend yield is 2%. You can get 6% in the bank.

Why is it relevant what you paid for the shares initially? We are talking about future returns. All youre doing by holding at that point is giving your gains back to the market (relatively speaking) by compounding at an inferior rate than even the risk free rate.

Back in 1988 Wall Street was tearing its hair out when Buffett purchased more than $1b of KO.

Are you suggesting that Buffett should quit his shareholding and put the money in the bank to earn 6%?

I think there are other reasons why Buffett continues to hold apart from the $250m dividend.

[Lego_Man]

Back in 1988 Wall Street was tearing its hair out when Buffett purchased more than $1b of KO.

Are you suggesting that Buffett should quit his shareholding and put the money in the bank to earn 6%?

I think there are other reasons why Buffett continues to hold apart from the $250m dividend.

That's fine as long the dividend isnt used as continued sole justification for holding. Yield can only be based on current value, anything else is illogical.

If you arent expecting capital growth, and are saying a 2% return in future is OK because you've made money on the stock in the past - that's where i think the error is.

[h2so4]

That's fine as long the dividend isnt used as continued sole justification for holding. Yield can only be based on current value, anything else is illogical.

If you arent expecting capital growth, and are saying a 2% return in future is OK because you've made money on the stock in the past - that's where i think the error is.

I think what I am saying is that in 1988 Buffett paid for 20 years growth and now the 2% dividend is just a bonus. A bit like selling shares to free carry the rest, except he hasn't sold any.

[Lego_Man]

I think what I am saying is that in 1988 Buffett paid for 20 years growth and now the 2% dividend is just a bonus. A bit like selling shares to free carry the rest, except he hasn't sold any.

If that's his justification though, then he is wasting potential return by deploying capital in an asset that is earning sub-optimal returns. What has happened in the past shouldnt matter, you should invest in what will give the highest expected return in the future (adjusted for risk).

When you buy a share at a point in time, the past chart is only looked at as a guide. Who cares if the stock has doubled in the last five years, except insofar as it will adjust your projection of where it will go in the next 5 years?

[ratkin]

The dividend yield is actually 2.8%
Maybe Buffet not as hung up on the shareprice as you guys. Its quite possible the company is increasing in value even though the price is stagnant.
53% of profits are paid in dividends the rest are hopefully usefully emplyed increasing company worth, so buffett
probably more thn happy to hold.
Their main product a bit last century though , was a time everyone drank gallons of the stuff, now it all energy drinks

[h2so4]

The dividend yield is actually 2.8%
Maybe Buffet not as hung up on the shareprice as you guys. Its quite possible the company is increasing in value even though the price is stagnant.
53% of profits are paid in dividends the rest are hopefully usefully emplyed increasing company worth, so buffett
probably more thn happy to hold.
Their main product a bit last century though , was a time everyone drank gallons of the stuff, now it all energy drinks

Very possible Shareholder equity grew from $9.3b in 2000 to $24.8b in 2009.

[percy]

Well the additional A$30mil banking facility will speed up the dental growth in Aussie.
"WE ARE WELL POSITIONED to take advantage of this ENORMOUS market and the opportunities it offers for profitable growth."

[percy]

Share price up a bit since late May. Now at $4.70 today, which is nicer than $4.20 back then. DISC: Long on ABA

Of interest - Forsyth Barr have upgraded Abano from "Accumulate" to "Buy".

From their research released today:

• Earnings Impact: Increase FY14 EBITDA forecasts by +9.4%.
• Valuation Impact: Upgrade from $6.35 to $6.65.
• Recommendation: Upgrade from ACCUMULATE to BUY.
  
  Investment View
  
  1. ABA is a growth company focused on the aggressiveexpansion of its dental networks through acquisitions inAustralia and New Zealand and ongoing investment in itsNew Zealand based Radiology businesses. Bay Internationalis in its formative stages developing audiology networks inAustralia and Asia and offers considerable growth prospectsbearing in mind the very successful development of theNew Zealand audiology business which was subsequentlydivested. As evidenced by the FY12 result we believe coreearnings momentum is gathering pace and we have upgradedour recommendation from ACCUMULATE to BUY.
  
  
  
  
  
  

I have been looking to add to my holding on any weakness.Has not happened, SP just steadily keeps going up.

[percy]

http://www.nbr.co.nz/article/nib-hol...unit-bd-137294

I wonder if Alan Clarke's appointment heralds an opportunity for Abano to buy the Tower medical insurance business. Abano are acquirers, Tower are selling off divisions.....

I srry but I am not as long sighted as you.!!!
Never-the-less it put Clarke [ABA] in a great to know what NIB require from a health supplier [aba].
Am I allowed a "well positioned"?.

[percy]

Silly me. NIB only picked Tower Medical up the other month.

Perhaps it might just mean a closer relationship with Abano's radiology and orthotics division (Occam's Razor and all that). Preferential pricing for Tower Medical clients. That sort of thing.

That is more of what I was thinking,also should NIB want some other services I am sure Clarke will tell them "I can help you there".