FPH - Fisher Paykel Healthcare.

[BlackPeter]

Thanks Alokdhir will keep an eye on EBO too...

Waiting on the sidelines.... Hopefully FPH last bottom 27 will be able to hold it up, if that is breached what's the next support level? Thanks!

Just don't forget there is a fee as well for "waiting on the side lines" It actually did cost you 5.9% last year (cost of inflation) - and who knows how expensive it will be this year .

[newbieinvestor]

Just don't forget there is a fee as well for "waiting on the side lines" It actually did cost you 5.9% last year (cost of inflation) - and who knows how expensive it will be this year .

@BlackPeter - Thanks BlackPeter! So true... Indeed.. there is a fee for 'waiting on the sidelines' Had recently cashed out of the stocks I had recently bought as I realized that I had very little margin of safety for my investments, wanted to protect my capital, the markets was in a downturn and would soon expose my cost prices.. Its been a learning curve... But yes your right purchasing power of NZD has reduced e.g. NZD:USD = .71 -->.65 , NZD:AUD .96 --> .935 (In order to invest in US or Oz shares) Suspect it will be a rollercoaster ride this year....

Big spike in share price at open on Monday on NZX (based on ASX close)

@ winner69 - Yep, should spike up on Monday given the ASX and US end of week closes. However remains to see if after the bounce back it then gradually drift down lower in the days to come till the results or any positive newsflow occurs...

Stocks which are standing out in this rout are EBO , HGH , NZR , CEN , IFT , SKL & VSL ....IMHO

FPH 25-27 area should hold ...otherwise its Bull's good fortune ...lol

@alokdhir - Thanks Alokdhir! for all the inputs. Should do some research on them and try to keep them (mix of value & growth picks)on my radar for buying opportunity on dips ...

[iceman]

@BlackPeter - Thanks BlackPeter! So true... Indeed.. there is a fee for 'waiting on the sidelines' Had recently cashed out of the stocks I had recently bought as I realized that I had very little margin of safety for my investments, wanted to protect my capital, the markets was in a downturn and would soon expose my cost prices.. Its been a learning curve...

I find it helpful to ask myself at times like this, when there could be an urge to sell, whether the company I invested in has fundamentally changed since I last bought shares in it. If not, why sell ? Unless you are a trader of course.

Based on that, I see absolutely no reason to sell my FPH shares. I'm much more likely to increase my holding than I am to reduce it.

[newbieinvestor]

I find it helpful to ask myself at times like this, when there could be an urge to sell, whether the company I invested in has fundamentally changed since I last bought shares in it. If not, why sell ? Unless you are a trader of course.

Based on that, I see absolutely no reason to sell my FPH shares. I'm much more likely to increase my holding than I am to reduce it.

@iceman - Hi Iceman that is correct there is no reason to sell FPH shares and would increase your holdings in a downturn if nothing has really changed with the business.... However the caveat being a lot of people would have bought it earlier when it was in low 20's and had a margin of safety. In my case being a newbie my recent purchase point has always been above 31-32 which didnt offer much margin of safety in terms of DCF, price. If one knows that it would go below those levels. e.g. 28 it wouldn't make sense to hold on when you could increase your holdings for more shares by buying at a lower price...

[Beagle]

Just brought up a 2 year chart of FPH, something anyone can do for themselves so I won't bother to post an image.
To me it looks like FPH, subject to fairly wide oscillations around the trend, has been in a downtrend since Sept 2020 when it hit nearly $38.
There's a clear breakdown through the key 200 day moving average indicator.
On a PE of 31.
No question this has enjoyed MASSIVE tailwinds from Covid but this seems to have peaked in late 2020 and a reversion to earnings not artificially boosted by this pandemic would appear to be another concern in the medium term.

I see no logical reason to apply fresh capital here and I think high PE stocks that have been fueled by once in a hundred year near zero long term interest rates (10 year N.Z. stock got well down under 1% in late 2020 but could be back to normal level's of 4% late this year or next) are vulnerable here. My 2 cents on this one.

[winner69]

Just brought up a 2 year chart of FPH, something anyone can do for themselves so I won't bother to post an image.
To me it looks like FPH, subject to fairly wide oscillations around the trend, has been in a downtrend since Sept 2020 when it hit nearly $38.
There's a clear breakdown through the key 200 day moving average indicator.
On a PE of 31.
No question this has enjoyed MASSIVE tailwinds from Covid but this seems to have peaked in late 2020 and a reversion to earnings not artificially boosted by this pandemic would appear to be another concern in the medium term.

I see no logical reason to apply fresh capital here and I think high PE stocks that have been fueled by once in a hundred year near zero long term interest rates (10 year N.Z. stock got well down under 1% in late 2020 but could be back to normal level's of 4% late this year or next) are vulnerable here. My 2 cents on this one.

If you had mentioned slowing growth (or even declining growth) the post would have echoed what you said about A2 in that infamous post which caused so much consternation when A2 share price was over $20

But just as well this is FPH so no worries

[Biscuit]

Just brought up a 2 year chart of FPH, something anyone can do for themselves so I won't bother to post an image.
To me it looks like FPH, subject to fairly wide oscillations around the trend, has been in a downtrend since Sept 2020 when it hit nearly $38.
There's a clear breakdown through the key 200 day moving average indicator.
On a PE of 31.
No question this has enjoyed MASSIVE tailwinds from Covid but this seems to have peaked in late 2020 and a reversion to earnings not artificially boosted by this pandemic would appear to be another concern in the medium term.

I see no logical reason to apply fresh capital here and I think high PE stocks that have been fueled by once in a hundred year near zero long term interest rates (10 year N.Z. stock got well down under 1% in late 2020 but could be back to normal level's of 4% late this year or next) are vulnerable here. My 2 cents on this one.

They have -27% gearing and their market is certainly not consumer discretionary so they are not likely to be much affected by increasing interest rates? Also, they are getting tail-winds from the falling NZ dollar and should be a defensive NZ share in this environment. They have been a great trading stock over the last few months and are always a great long-term hold. I certainly wouldn't rate them a sell but you would want to be cautious buying anything at this point.

[Beagle]

They have -27% gearing and their market is certainly not consumer discretionary so they are not likely to be much affected by increasing interest rates? Also, they are getting tail-winds from the falling NZ dollar and should be a defensive NZ share in this environment. They have been a great trading stock over the last few months and are always a great long-term hold. I certainly wouldn't rate them a sell but you would want to be cautious buying anything at this point.

I don't follow this one mate but its important to understand that I am not talking about interest rates as it affects consumers, rather the 10 year Govt stock rate that affects the DCF valuation of the company. As long term interest rates increase the current value of future growth gets marked back as investors demand a better price for a company now to compensate for higher rates and future growth is generally worth less in today's dollar terms.
https://www.marketscreener.com/quote...30/financials/
I think its well worth noting that last years result of 90 cps is regarded as the peak and the average analyst is projecting just 71, 67 and 78 cents respectively in the next 3 years.
At $28 this puts FPH on a forward prospective PE of 39 times FY22's forecasted result and 42 times FY23's result.

Those are very very expensive metrics for a company that has just experienced peak earnings and is still enjoying very strong tailwinds from Covid The yield of 1.39% is well below the 10 year risk free Govt stock rate which is now over 2.6%.

I think FPH is very vulnerable to the downtrend continuing. For those that believe the worst of the pandemic is behind us, (I am not sure I am in than camp or not) this looks like a pretty good short opportunity to me.

Despite all this, this stock is well covered by 9 analysts which is very good coverage for a N.Z. stock, who undoubtedly know more about it than I do and the average price target is $31.71 so you should take my comments with the grain of salt they probably deserve.

For me. I don't believe super high PE's in near term earnings decline will work best in this environment...but like all things, time will tell.

Hope my friend Couta1 reads this post. Consider it a warning mate, I really don't like these metrics and the trend down is not your friend.

[winner69]

..........

I don't follow this one mate but its important to understand that I am not talking about interest rates as it affects consumers, rather the 10 year Govt stock rate that affects the DCF valuation of the company. As long term interest rates increase the current value of future growth gets marked back as investors demand a better price for a company now to compensate for higher rates and future growth is generally worth less in today's dollar terms.

I did a DCF valuation with pretty bullish growth assumptions not that long ago ....as I posted that came in at about $28

If I increased the discount rate by 1% point (and kept the growth assumptions the same) the DCF is about $4 lower - about $24

Increase the discount rate by a further 1% point and the DCF is about another $4 lower - about $20

Nothing changed except the discount rate - all the bullish growth assumptions remained the same .... just pointing out the sensitivity of discount rates on valuations .... like Beagle alluded to

Doesn't matter much because the collective knowledge of 9 guru analysts can't be wrong with an average of $31.71 can it ..... but then again one of the gurus came in at $23.50 ... must be an outlier

[winner69]

Just brought up a 2 year chart of FPH, something anyone can do for themselves so I won't bother to post an image.
To me it looks like FPH, subject to fairly wide oscillations around the trend, has been in a downtrend since Sept 2020 when it hit nearly $38.
.

Yep the high was $37.89 on Aug 28 2020 ... and has essentially been in a downtrend since

What's really spooky is that late August 2020 was when ATM peaked and started heading south

So market sentiment at that time affected the high flyers

Spooky eh ..... be a bit messy if FPH started a series of not so optimistic announcements ...one never knows