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  1. #11
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    Quote Originally Posted by CJ View Post
    In part but listed property stocks are valued on their yield. Variations occur due to debt levels, quality of buildings/tenants etc. The two (NTA and yeild) maybe confused as the value of a building is linked directly to its rental yield - an increase in NTA will be due to an increase in rental yield.

    So at earnings of 7.6c per share, and a dividend policy of say 90% and a target yeild of 8% gives you a SP of 85c. If their profit doubles as you suggest, the that price will also double.

    Edit: I am not sure what their dividend policy or whether they plan to distribute or use excess funds to pay down debt or expand.

    You'd never get 8% yield on any dairy farm in NZ ( maybe a $10 payout ). I would think with a bumper year anticipated next year they will re-invest in there re-grassing program , re-invest in stock ( more culls ) , and keep the bank happy by paying down a chunk of the new debt taken on to buy out Mitsui.

  2. #12
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    Quote Originally Posted by FarmerHamilton View Post
    You'd never get 8% yield on any dairy farm in NZ ( maybe a $10 payout ). I would think with a bumper year anticipated next year they will re-invest in there re-grassing program , re-invest in stock ( more culls ) , and keep the bank happy by paying down a chunk of the new debt taken on to buy out Mitsui.
    So why would I invest in a farm rather than a listed property trust? The end goal for the company cant be to sell the farm to an even bigger sucker?

    Excuse me, I am a non farmer, probablly like the people offering 65c
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  3. #13
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    Quote Originally Posted by CJ View Post
    So why would I invest in a farm rather than a listed property trust? The end goal for the company cant be to sell the farm to an even bigger sucker?

    Excuse me, I am a non farmer, probablly like the people offering 65c


    Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.

    Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.

    Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.
    Last edited by FarmerHamilton; 03-04-2013 at 01:03 PM.

  4. #14
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    Default SMP prices going nuts !!

    Quote Originally Posted by FarmerHamilton View Post
    Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.

    Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.

    Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.

    Stunning rise in skim milk powder prices, up +36% in NZ$ terms in two weeks; currency rose sharply overnight TWI = 79.3

    Posted in Rural News April 12, 2013 - 08:31am, David Chaston
    Skim milk powder prices in NZ$




    Skim milk powder prices have moved sharply higher in the latest USDA market survey.
    They rose an average of 36% in US dollar terms from their previous report on March 28.
    Actual price rises in this market survey ranged from +26% to +45% for skim milk powder sold by Oceania suppliers which includes Fonterra.
    In NZ$ terms the average rise was just as impressive - up by an average of 35%.
    Over the same period, the New Zealand currency has risen just 2.6%.


    The average skim milk powder price is now US$5,563 per tonne and $6,640 per tonne. These are rises of US$1,475 and NZ$1,756 over that two week period.
    From the beginning of the year, skim milk prices have risen US$2,163 and NZ$2,563 per tonne, rises of +63% in either currency.
    The rise in wholemilk powder prices has been strong too. They are up +11% in the past two weeks.



    Synlait Farms has still not traded yet ... surely 1 kiwi out of 4.2m might be interested in "jumping in" soon ?? ...

  5. #15
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    Quote Originally Posted by FarmerHamilton View Post
    Synlait Farms has still not traded yet ... surely 1 kiwi out of 4.2m might be interested in "jumping in" soon ?? ...
    Still no movement - spread is 75c and 115c.
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  6. #16
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    Quote Originally Posted by CJ View Post
    Still no movement - spread is 75c and 115c.
    Yes, NZ's biggest industry , the thing we absolutely , no question, lead the world in ... dairy farming / milk production and we get a new listing with 100% focus on that industry and not a single trade in 3/4 weeks.

    NZ's capital markets are so thin ... very frustrating the lack of liquidity.

  7. #17
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    Quote Originally Posted by FarmerHamilton View Post
    Yes, NZ's biggest industry , the thing we absolutely , no question, lead the world in ... dairy farming / milk production and we get a new listing with 100% focus on that industry and not a single trade in 3/4 weeks.

    NZ's capital markets are so thin ... very frustrating the lack of liquidity.
    Your not tempted to put in a low bid (but above 75) to see if you can flush out a seller?

    I wonder if it would be different if it was listed on the NZAX or was it put on the Unlisted as they didn't expect/want it to be traded that much?
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  8. #18
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    Quote Originally Posted by CJ View Post
    Your not tempted to put in a low bid (but above 75) to see if you can flush out a seller?

    I wonder if it would be different if it was listed on the NZAX or was it put on the Unlisted as they didn't expect/want it to be traded that much?


    I'm thinking it was probably put on the unlisted to keep down costs. I think they have about 100 shareholders so don't know if that meets the minimum requirement. A bit depressing when a company that sells greasy fried chicken , crap coffee , and naf pizza with their packaging littering the streets of NZ can trade in decent volume with a tight B/O spread on the NZX and yet a company producing a healthy quality product exported all over the world can't get any interest in it at all ....

  9. #19
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    Quote Originally Posted by FarmerHamilton View Post
    I'm thinking it was probably put on the unlisted to keep down costs.
    That is no doubt the reason and I think something NZX needs to address when they refresh the NZAX.

    But likewise, if they wanted or expected it to be actively traded, they should have been tempted to put it on the NZAX.
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  10. #20
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    Quote Originally Posted by CJ View Post
    That is no doubt the reason and I think something NZX needs to address when they refresh the NZAX.

    But likewise, if they wanted or expected it to be actively traded, they should have been tempted to put it on the NZAX.
    Companies are no longer allowed to operate a market in their own shares, so they are looking for a vehicle [market] for shareholders to buy/sell/trade their shares without the costs of being a listed company.

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