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  1. #851
    Alley Cat Brain's Avatar
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    Quote Originally Posted by percy View Post
    Yes I take PE into account when looking at stocks.
    I try to buy stocks where the eps growth rate is higher than the PE.
    So from www.4-traders.com
    ................2017.........2018.......2019...... ....2020.
    eps.............29.5..........32.9.......38.4..... .....45.5.
    eps growth rate....11.5%.......16.7%........17.9%...........a verage...15.36.
    Therefore I would think a PE of 20 would be high enough to pay.....or just under $6.00.
    Paying a pe of 44.53 does not work for me.
    Percy you are a man of infinite patience. Any body who did not understand your post probably thinks PE means physical education.

  2. #852
    percy
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    Quote Originally Posted by Brain View Post
    Percy you are a man of infinite patience. Any body who did not understand your post probably thinks PE means physical education.
    Nearly there Brian.....I am PEed.....Pyschologically Exhausted..................lol.

  3. #853
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    Quote Originally Posted by Jim View Post
    I started this thread back in August 2011 and the share price was aroud $2+.I wasn't sure because the share price was going down and down. I have been following and buying the shares since 2004,
    bought 2000 shares at $3.02 in 2004,
    bought 1500 shares at $3.34 in 2007
    bought 1500 shares at $2.73 in 2008
    bought 1500 shares at $2.46 in 2011
    bought 2000 shares at $2.18 in 2011
    bought 2100 shares at $2.10 in 2012
    bought 3000 shares at $1.93 in 2012
    sold 2000 at $3 42 in 2013
    sold 2000 at $5.22 in 2014
    Might be time to sell some to take the top off again lol
    Yes interesting,SP flat lined 2007-2013 with a few dips in between before taking off

  4. #854
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    When I was starting out, I fell into the trap of following advice on here, when people were joking. Now I'm less of a noob I make different mistakes instead :-)

    Hmm PE of FPH... Yes, seemingly eternally expensive. So far from the market segment size they're aiming for, and always performing well with good growth. This is why they're loved and the PE is so high. If you look at the number of years of investment before you get you're money's worth on dividend growth alone it's ridiculous. If you view them as something to buy to make capital gains on, they're great. Once you make those gains, it's difficult to find a reason to sell and you end up putting then in the bottom draw to be a share that you eventually end up getting you're money back and not using them for the reasons you originally bought them for. You make your really money when you sell these.

    For that reason, I think these are a great buy and hold, even at that ridiculous PE. Still can't help feeling like the greater fool on such a PE though.

    Side note: my first purchase of these was actually at a loss. I sold them back when I had no patience and didn't understand the investment. I bought high and sold low because I thought I was the greater fool. Fortunately I held a few, which later (actually just last month) paid back my losses on the dumb big sell. I'll be buying more on the lows. In fact, when the tide goes out, these are my first choice.

  5. #855
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    They do say you never regret buying quality.Which other blue chip NZ share will continue to grow earnings like FPH for "for the foreseeable long term future"
    Percy ,it looks like you would never buy a house in Remuera:" because it would take 40 years to pay off your mortgage" as news reports are now saying but lots do.Its the "new norm" until it isn't.

  6. #856
    percy
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    Quote Originally Posted by kiora View Post
    They do say you never regret buying quality.Which other blue chip NZ share will continue to grow earnings like FPH for "for the foreseeable long term future"
    Percy ,it looks like you would never buy a house in Remuera:" because it would take 40 years to pay off your mortgage" as news reports are now saying but lots do.Its the "new norm" until it isn't.
    Don't know about a house in Remuera,I think I would prefer Orewa
    I have owned FPH,AIA,MFT,POT and other fine companies in the past,and they were very successful investments for me.I still hold a few EBO.
    I look for eps growth.
    When eps growth is a lot higher than the PE ratio I buy.
    When eps growth is half the PE ratio I get nervous.
    When the PE is three times the growth rate I sell down.
    I also look for companies paying a reasonable divie,and have the capacity to pay increasing divies.
    Works for me.
    Last edited by percy; 22-10-2017 at 06:27 AM.

  7. #857
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    Quote Originally Posted by percy View Post
    Don't know about a house in Remuera,I think I would prefer Orewa
    I have owned FPH,AIA,MFT,POT and other fine companies in the past,and they were very successful investments for me.I still hold a few EBO.
    I look for eps growth.
    When eps growth is a lot higher than the PE ratio I buy.
    When eps growth is half the PE ratio I get nervous.
    When the PE is three times the growth rate I sell down.
    I also look for companies paying a reasonable divie,and have the capacity to pay increasing divies.
    Works for me.
    Makes sense Percy.It works for you Percy as you have been in the market a long time,do your own research and have the feel for the market.
    For other investors that don't have the time in the share market & for the market research My thoughts are FPH is a long term hold,put it in the bottom draw.This is with the understanding that the SP might be high now in the short term (maybe hyper elevated due to index buying) but in 10 20 years as FPH sales double every 5 years
    & profit does even better than doubling,then SP will follow earnings & in 10-20 years investors will look back & think how well they have done,or their kids will say to their parents,wow you certainly new what you where doing buying those FPH shares

  8. #858
    Alley Cat Brain's Avatar
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    In my view putting a share in the bottom draw is a very dangerous practice. The share market is very dynamic and needs to be watched continuously. As has been said many times before the intrinsic value of a share is its dividend return. With a high PE share an investor has to wait many years to justify the price paid. It is hard enough to predict the performance of a company 2 years out let alone 5 , 10 , or 15 years

  9. #859
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    Quote Originally Posted by Brain View Post
    In my view putting a share in the bottom draw is a very dangerous practice. The share market is very dynamic and needs to be watched continuously. As has been said many times before the intrinsic value of a share is its dividend return. With a high PE share an investor has to wait many years to justify the price paid. It is hard enough to predict the performance of a company 2 years out let alone 5 , 10 , or 15 years
    Metaphorically speaking I agree with you Brain.
    BUT how often in hind sight,do investors let their emotion/fear cause them to sell something when,in hindsight it was the wrong time to sell.Look at Jim's returns.He looks to have a high conviction for FPH as a company even the the share price did not match his conviction for a long time.Would you be unhappy with the returns he has made?
    In saying that FPH in my view is a share that in the long term will produce a higher return than the majority of shares.As Percy says,he has owned POT,AIA etc & he no longer holds.Why? because of their eps growth.So which blue chip NZ share would Percy buy given a choice of S&P NZX 10?

  10. #860
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Brain View Post
    In my view putting a share in the bottom draw is a very dangerous practice. The share market is very dynamic and needs to be watched continuously. As has been said many times before the intrinsic value of a share is its dividend return. With a high PE share an investor has to wait many years to justify the price paid. It is hard enough to predict the performance of a company 2 years out let alone 5 , 10 , or 15 years
    Agree with that. While FPH is a large and solid NZ company with significant international market share - on an international platform they are only a small fish. Impossible for anybody to predict whether they will still flourish in 10 or 20 years or whether some of the big fish will eat or squash them by then.

    Nokia and IBM used to be giants in their industry. So was Kodak and Xerox. People still communicate and take photos, but how healthy are these giants in their industry these days?

    Dangerous to buy a company with a 35 year payback period ... the company might not be anymore around when it is supposed to pay the investor the last installment of its purchase price.

    Not sure whether I would be as conservative as percy (requesting a PE around 20), but above 25 (with a CAGR of 10) this moves as well in my view into a very speculative investment - unless, of course, investors see a growth rate well beyond what the company is delivering at current (always an option).

    I certainly don't expect doom and gloom for FPH, but I could well imagine that the SP moves again on some sort of plateau, as it did before and similar to what RYM (with a better growth rate) is currently doing.

    Anyway - it always depends on the alternatives - I guess some people pay $6k for a bitcoin without any earning potential. If that's the alternative than FPH is a great investment no matter how dear the purchase price ...
    Last edited by BlackPeter; 22-10-2017 at 05:19 PM. Reason: obviously a k too much for the bitcoin - they are not that expensive yet :)
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

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