I think I read in a previous report that they were expanding into the Ukraine. Was that happening or just a future plan? Mearly a drop in the bucket for MFT anyway but still.
MFT last returned 66 cents per share. At the AGM it was announced they anticipated a 2.5% decrease due to the dropping of parcels in Australia as they refocus on more profitable ops there. Logically the share price dropped 2.5%. Let's say for arguments sake they now return 64cps. Closing price $10.45
.64÷10.45= 6% return (not necessarily to investors of course).
So if growth was to stop in that any increase in revenue from now was met by a corresponding increase in costs and all other factors remained more or less unchanged, this company could 'in theory' return a 6% dividend to investors. Not amazing but not that bad either. This assumes no growth.
Now look at the speeches from the AGM.
1) Our Australian operations are being hindered by a lack of capacity.
OK - let me get this straight, you're so busy you don't have enough room. Sounds like a reasonable sort of problem to have to me. How is this being resolved? You're building extra capacity in pretty much all the Australian cities over the next couple of years. Brilliant.
2) European operations are slow.
You're earning a 6% return overall with a sluggish sector dragging you down. What's going to happen when this sector picks up? Worst case should be 6% return and when it picks up, who knows.
3) New offices opening in many countries....
Shorter term sure this is costly but medium and longer term this is only going to add to marketability and efficiency and surely profits. You're carrying many of these new offices now and making 6%, so anything they can make will only add to this.
Other debatable favourable items;
Strong stable management
Proven history with strong future direction and sensible strong realistic growth
Non speculative industry. Not needing legislation against.
IMHO buying mainfreight means most likely at worst a 6% return with the likely possibility of some serious growth from new branches around the world and growth and efficiency in Australia.
What are your thoughts?
Disc; own MFT and at 10.45 considering some more!
This was posted almost exactly a year ago. The price at the time was $10.45. Todays close was $14.90. That's a 43% increase in shareprice and dividends on top of that.
This stock gets very little coverage, I guess it's just not sexy enough.
Global reach expanded = more complete product offering to customers.
Company projecting 85% of revenues to be earned outside of N.Z. by 2017.
Average EPS growth of 14% per year for the last 5 years.
Strong tailwinds from falling kiwi dollar and fuel prices.
Consensus view for 2015 prior to the above announcement was for 88 cps which on 99.57m shares ~$88m
Latest guidance suggests that analysts will be downgrading the stock. Current growth appears to have slowed materially from the 5 year average of 14% per annum EPS growth the company has previously enjoyed.
PT's post #422 was right....this investment isn't working for me so I'm out.
Why, gv1? Has there been news since the March report?
Looks to me as though it's getting hammered like the rest of the markets.
Interesting to see how unhelpful (in fact, dead dodgy) the moving average crossovers have been since March.
Cheers.
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Originally Posted by nextbigthing
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