FPH - Fisher Paykel Healthcare.

[Penfold]

This is one of my long term holds... I don't trade like most of the guys on here.

I have been watching this for years and there seems to be something up that you TA guys might want to look at. FPH is moving up pretty solidly these last few days despite the xrate not going in their favour. This is pretty unusual behavior... Just thought I would mention it because I don't contribute much round here being a FA kind of guy.

[Ayrton]

Yes and no. The FX profit is banked and drawn down as money is repatriated back to NZ and not called profit. If the Kiwi drops back to 50us and they cash out at say 60us and they get new hedging at 50us then the difference would be included as an extraordinary item. So they are basically saying they can sell $600mill before they have to use market exchange rates. That will take them through to next late next year hopefully giving them enough time to either increase prices or get some more hedging if the kiwi drops. However will be tight if there is no drop in the Kiwi by next year. But having said that they now have 40% of sales in the states and 30% in Europe and 30% in Asia so should be ok. The currency risk is well spread now. The Euro rate is still below our long run average and so they should be ok there.

This from Nov last year may help explain it? Not sure though.

[elZorro]

FPH still popular today, surely a good sign.

[winner69]

Sokid at best result

Headlines say profit up 15% to $71m

However operating profit about the same as last year. Profit increase from forex movements

Guidance is for about the same profit next year so not expecting much growth .... which says the headline about this years profit is not indicative of an another good year .... and with a shareprice at 24 times earnings doesn't suggest outperformance of returns over the next few years

[percy]

Sokid at best result

Headlines say profit up 15% to $71m

However operating profit about the same as last year. Profit increase from forex movements

Guidance is for about the same profit next year so not expecting much growth .... which says the headline about this years profit is not indicative of an another good year .... and with a shareprice at 24 times earnings doesn't suggest outperformance of returns over the next few years

Yes you are right.I am pleased to see R&D $35.3 mil or 7% of operating revenue.This will lead to extra sales.$48mil of capital expenditure will also lead to extra sales.Good products in the health care sector is still a good place to invest.

[Catalyst]

FPH will probably update its earnings guidance at the AGM on 27 August, as they have in the past couple of AGMs. Given the recent currency appreciation against the US$, I wouldn't be surprised to see a downward revision to its guidance, all other things being equal.

31 March 2010 profit = $71.6m

31 March 2011 guidance (given in May) = NPAT of $70 - $75m, assuming fx avgs US$0.67.

Now the currency is over US$0.71. I recall the company stating that its profit sensitivity is around $1m for a 1% change in fx over the course of the year given current hedging arrangements. So if the currency stays over US$0.71 during August I wouldn't be surprised if the company revises guidance down to $65 - $70m.

NPAT of $70m puts them on a PE of around 22x at $3.00 share price.

[darksentinel]

Break above the 19-day MA, some good short-term signals. Anyone else think has broken the down-trend?

[Jaa]

Bollard's hawkish comments yesterday about the OCR should halt the $NZ rise for a while and thus halt FPH's slide. Till the next major data point comes out anyway.

[Zito]

Bought in yesterday - a confirmed trendline break reinforced by an OBV buy signal over the last 2/3 trading days has provided a good entry point.

[Catalyst]

FPH's recent profit guidance shows us again that the stock remains very sensitive to the NZD/USD x-rate. I'd love to see a graph of FPH vs NZD/USD (or inverse of NZD/USD) over the past few years to see how close the correlation is.

Net profit for y/e 31 March 2010 = $71.6m
Old net profit guidance for 31 March 2011 = $70 - $75m (May 2010) assuming 67c x-rate remains
New net profit guidance for 31 March 2011 = $65 - $70m (August 2010) assuming 70-71c x-rate remains

At the current share price of $3.00, and assuming NPAT of $70m and EBITDA of $130m for FY11, FPH is currently trading on:
PE = $3.00 / ($70m/517.4m) = 22.2x
EV/EBITDA = ($3.00 x 517.4m + $77m net debt) / $130m = 12.6x
Gross yield = 12.4c / 300c / 70% = 5.9%

Note: current x-rate = approx 72c