Seeka

[BIRMANBOY]

But if it hadn't recovered you would have been congratulating yourself.....as they say.. dammed if you do and dammed if you don't...That's why its called the Share MARKET...anything could happen and quite often does...

I had a holding in this but sold after it was hit by PSA, really hurting now that it share price has recovered !

[Chaowee88]

Yea, it was a valuable lesson. Really shows the importance of patient.

[martinchnz1]

This is not particularly liquid but is worth keeping an eye on looking for the occasional dip. Your interest is probably well placed but maybe ill timed since its SP may be close to fully priced. Last 6 months has been between 2.65 to 3.50. I think there is still upward movement however in the future and even now the dividend yield is quite respectable 15 cents 2014 (4.84% plus imputation credits.) They seem to be a well run outfit and are quite diversified in what they do so I don't believe they are high risk. I have been holding since 2011 and it has been a good investment for me..nice dividend yield and also capital growth.

I decided to grab a tiny bundle at 306 since the dividend yield and diversification it will give me is attractive. Never know, current macro events such as the free trade South Korea agreement and lower dollar could push some more growth. Appears like a strong solid firm as you say so for a long term holding sounds good
In my brief year of investing I've found chasing a low fluctuation far too speculative. If its a solid company can always top her up when that comes along and if it doesn't eventuate no need to buy in at a higher price.

[Chaowee88]

I decided to grab a tiny bundle at 306 since the dividend yield and diversification it will give me is attractive. Never know, current macro events such as the free trade South Korea agreement and lower dollar could push some more growth. Appears like a strong solid firm as you say so for a long term holding sounds good

I think you've overpaid slightly. Not sure why Seeka is issuing dividends with PSA still lingering, and the fact net debt is higher, probably be around 25 million as they will be cash flow positive in 2nd half at full year makes enterprise value of 25 + 48 = 73 with EBITDA of 11 - 12 = 6 to 6.5 times, or 73 / 3.2 forecast NPAT = 22.81 times. Those numbers seen too high. Probably should only be around $2.70 to $2.80

[winner69]

I think you've overpaid slightly. Not sure why Seeka is issuing dividends with PSA still lingering, and the fact net debt is higher, probably be around 25 million as they will be cash flow positive in 2nd half at full year makes enterprise value of 25 + 48 = 73 with EBITDA of 11 - 12 = 6 to 6.5 times, or 73 / 3.2 forecast NPAT = 22.81 times. Those numbers seen too high. Probably should only be around $2.70 to $2.80

EV/ebitda of 6 is pretty cheap, specially these days

That's a 16% cash return

[Chaowee88]

EV/ebitda of 6 is pretty cheap, specially these days

That's a 16% cash return

If you think that cheap then have a look at JWI, it EV/EBITDA is ridiculous then...

[aucklandunistudent]

JWI has a range of corporate governance issues along with secularly declining sales.

SEK's PE might look high but part of that is because depreciation overstates maintenance CAPEX and the stock is selling below book. SEK is generating strong cashflows and is in a cyclical upswing, as per management forecasts of a long term increase in disease-resistant high-margin golden kiwifruit volumes over the next few years. Given where equity market valuations are at it's real cheap, but there isn't a lot of liquidity so you need to be careful.

[Chaowee88]

JWI has a range of corporate governance issues along with secularly declining sales.

SEK's PE might look high but part of that is because depreciation overstates maintenance CAPEX and the stock is selling below book. SEK is generating strong cashflows and is in a cyclical upswing, as per management forecasts of a long term increase in disease-resistant high-margin golden kiwifruit volumes over the next few years. Given where equity market valuations are at it's real cheap, but there isn't a lot of liquidity so you need to be careful.

I can assume then that you have a holding in this as it "real cheap"?

If their cash flows are as strong as you put it they wouldn't need to instate a DRP. Their P/E is cheap compared to other nzx shares but for a company still hampered by PSA, there's still a fair bit to do. However, one positive you have pointed out is their NTA which is healthy.

[aucklandunistudent]

No I am not a holder because it is too illiquid to build up a reasonable holding that you can confidently dispose of the way it is currently trading - that and I am not an expert in the kiwifruit industry, and cannot justify the time investment that knowledge would require given the illiquidity. If I was a holder though I wouldn't be a seller at current prices (because I would have done my homework before buying, and I have a feeling this is a goodie). Have done a bit of work on this one now and will probably do more if I see it drop significantly and I feel there is a lot of upside - may be a buyer then.

While DRPs can be and often are associated with weak cashflows they do not need to be. Just look at the financials - business has been generating strong FFO and CFO with minimal CAPEX over the past few years. CAPEX forecasts in the annuals/presentation are not onerous. Peak FFO was a lot higher than where we are right now, so a lot of potential for non capital intensive cyclical growth as things normalise. CFO bought stock on market recently.

In case you are a beginner I want to caveat all this with I am not an expert in the kiwifruit industry and I might be totally wrong on where things are in the cycle (maybe they are permanently impaired - anybody here have a view on that?) - I haven't done the work to be confident. always DYOR and don't listen to anybody on a forum.

[Chaowee88]

No I am not a holder because it is too illiquid to build up a reasonable holding that you can confidently dispose of the way it is currently trading - that and I am not an expert in the kiwifruit industry, and cannot justify the time investment that knowledge would require given the illiquidity. If I was a holder though I wouldn't be a seller at current prices (because I would have done my homework before buying, and I have a feeling this is a goodie). Have done a bit of work on this one now and will probably do more if I see it drop significantly and I feel there is a lot of upside - may be a buyer then.

While DRPs can be and often are associated with weak cashflows they do not need to be. Just look at the financials - business has been generating strong FFO and CFO with minimal CAPEX over the past few years. CAPEX forecasts in the annuals/presentation are not onerous. Peak FFO was a lot higher than where we are right now, so a lot of potential for non capital intensive cyclical growth as things normalise. CFO bought stock on market recently.

In case you are a beginner I want to caveat all this with I am not an expert in the kiwifruit industry and I might be totally wrong on where things are in the cycle (maybe they are permanently impaired - anybody here have a view on that?) - I haven't done the work to be confident. always DYOR and don't listen to anybody on a forum.

Strange why anyone says it "real cheap" yet has no holding...

A you trying to ramp the share price up?

Please post some numbers to illustrate your so cheap theory.