ZEL - Z Energy.

[Beagle]

ananda77 - Don't beat yourself up. Best to accept that its simply not possible to win every single time you make an investment.
There are always going to be some losses along the way.
At the recent Kingfish annual meeting their chief investment officer said even the best fund managers only get 2/3 rd's of their decisions right.

My money is on this and Synlait both having another leg down despite yesterday's steep falls. Both will be buys again at some point in the future but both need to be de-risked.
A conclusion to the fuel price enquiry process might be the trigger point for a recovery with this one in due course in the same way as a resolution to the Pokeno fiasco would de-risk Synlait.

[percy]

"For what its worth around my area, Z are consistently the most expensive."

my 5 cents worth: I always knew I would not feel comfortable holding Z, but the yield was just too tempting. I bought a small number a shares (1253) at 6.54 - yield 6.5% fully imputed. Now I am a long term holder, most likely 5 years.

I always fill up at various Gull stations, because with Gull, you know what you get - no mucking about with bonus schemes and the likes, and I never stopped at Z...just the most expensive lot and for what reason?

I sometimes stopped at BP to use the bonus on the AA card, but it turned out, even with the bonus, they are more expensive then Gull.

Gull seems to be the most up-to-date retailer with their no gimmicks approach and with their speed lanes, to me its no wonder that other retailers are going to eat dirt.

Z IS my biggest mistake I have done in the market for the last 20 years+. Bugger...60m profit downgrade based on bonus schemes? You got to be kidding...This is stupid and I am stupid...

Warren Buffet states he gets 6 out of 10 investments right.

[couta1]

"For what its worth around my area, Z are consistently the most expensive."

my 5 cents worth: I always knew I would not feel comfortable holding Z, but the yield was just too tempting. I bought a small number a shares (1253) at 6.54 - yield 6.5% fully imputed. Now I am a long term holder, most likely 5 years.

I always fill up at various Gull stations, because with Gull, you know what you get - no mucking about with bonus schemes and the likes, and I never stopped at Z...just the most expensive lot and for what reason?

I sometimes stopped at BP to use the bonus on the AA card, but it turned out, even with the bonus, they are more expensive then Gull.

Gull seems to be the most up-to-date retailer with their no gimmicks approach and with their speed lanes, to me its no wonder that other retailers are going to eat dirt.

Z IS my biggest mistake I have done in the market for the last 20 years+. Bugger...60m profit downgrade based on bonus schemes? You got to be kidding...This is stupid and I am stupid...

All part of the journey I've been in the same situation with AIR and TRA and realised the losses as well as sitting on eye watering paper losses a few times with the likes of A2. PS-If you havent lost you havent lived.

[macduffy]

Ananda 77 has a great investing record in the last 20 years by my standards. 1254 shares in Z down by a mere $1+ something the biggest mistake!

Wish I could do as well - with my 50 years' experience in the market!

Disc: Holding Z - and for what it's worth - expect a degree of recovery.

[couta1]

Ananda 77 has a great investing record in the last 20 years by my standards. 1254 shares in Z down by a mere $1+ something the biggest mistake!

Wish I could do as well - with my 50 years' experience in the market!

Disc: Holding Z - and for what it's worth - expect a degree of recovery.

A bit like crying over spilt milk methinks, Beagle reckons he'd be seriously ill if he had to cope with my portfolio at times. Lol

[ananda77]

Jeez, I just need to stick with index derivatives, but there is hope nevertheless for Z Energy:

Latest ASB recommendation report
Valuation: $8.30Undervalued but there is time to purchase Last updated:13/09/19
No-Moat Z Energy Disappoints the Market With Guidance Downgrade; Our NZD 8.30 Fair Value Unchanged
Investment rating
After Shell's exit in 2010, Z Energy successfully increased its gross fuels margin by 65%. However, New Zealand transport fuel consumption has stagnated for more than a decade and we think optimising the fuels margin can only go so far. Further, we have reservations in the owning of a stake in New Zealand's only refiner, comparatively modest though it is. Refineries are low-margin and capital-intensive, but Z Energy has many favourable attributes that make it an attractive investment at the right price. Management has made proven market inroads where Shell took its eye off the ball. Z Energy has driven returns on invested capital admirably back above its cost of capital, a key plank in a sustainable business model.

Event

Impact

Recommendation impact (last updated: 13/09/2019)
--

Event analysis
No-Moat Z Energy Disappoints the Market With Guidance Downgrade; Our NZD 8.30 Fair Value Unchanged

Despite no-moat Z Energy downgrading its fiscal 2020 EBITDAF guidance by about 8% to NZD 390 million-NZD 430 million from NZD 425 million-NZD 465 million, our fair value estimate of NZD 8.30 stands. We continue see no long-term implication in the drivers, including unsustainable retail price competition and fuel discounting, exacerbated by cyclically low regional refiner margins. These are the same elements detracting from the current earnings of Australian counterparts Caltex Limited and Viva Energy Group. We think these metrics will favourably trend back to longer-term averages, and Z's infrastructure advantage should see it weather the storm as well as any.

Z also lowered its fiscal 2020 DPS guidance by about 0%-7.5% to NZD 0.48-NZD 0.50 from NZD 0.48-NZD 0.54. We lower our fiscal 2020 EBITDAF and DPS forecasts by 12% and 6% to guidance midpoint NZD 410 million and NZD 0.49, respectively. At the announcement-battered NZD 5.70 share price, down 10% on the day, the dividend translates to an even more appealing fully imputed 8.6% yield. Z's intention remains to pay out 70%-85% of free cash flow, where free cash flow is defined as replacement cost, or RC, EBITDAF less RC tax, financing costs, and long-term integrity capital expenditures. The focus is on returning cash to shareholders, and the company says there is no near-term need to allocate material capital to noncore investments in the pursuit of revenue stream diversification. We agree with this conservative course of action.

Yield is the key attraction, and the shares remain materially undervalued in relation to it. We suspect that the market is overly focused on the low growth outlook rather than the income appeal of the stock. We applaud Z's focus on shareholder returns. The company's strategy of optimising the asset base and improving operating efficiency continues to pay off--return on equity is consistently above Australasian peers, and we expect this to continue to support the yield if not growth.

[bull....]

There is hope nevertheless:

Latest ASB recommendation report
Valuation: $8.30Undervalued but there is time to purchase Last updated:13/09/19
No-Moat Z Energy Disappoints the Market With Guidance Downgrade; Our NZD 8.30 Fair Value Unchanged
Investment rating
After Shell's exit in 2010, Z Energy successfully increased its gross fuels margin by 65%. However, New Zealand transport fuel consumption has stagnated for more than a decade and we think optimising the fuels margin can only go so far. Further, we have reservations in the owning of a stake in New Zealand's only refiner, comparatively modest though it is. Refineries are low-margin and capital-intensive, but Z Energy has many favourable attributes that make it an attractive investment at the right price. Management has made proven market inroads where Shell took its eye off the ball. Z Energy has driven returns on invested capital admirably back above its cost of capital, a key plank in a sustainable business model.

Event

Impact

Recommendation impact (last updated: 13/09/2019)
--

Event analysis
No-Moat Z Energy Disappoints the Market With Guidance Downgrade; Our NZD 8.30 Fair Value Unchanged

Despite no-moat Z Energy downgrading its fiscal 2020 EBITDAF guidance by about 8% to NZD 390 million-NZD 430 million from NZD 425 million-NZD 465 million, our fair value estimate of NZD 8.30 stands. We continue see no long-term implication in the drivers, including unsustainable retail price competition and fuel discounting, exacerbated by cyclically low regional refiner margins. These are the same elements detracting from the current earnings of Australian counterparts Caltex Limited and Viva Energy Group. We think these metrics will favourably trend back to longer-term averages, and Z's infrastructure advantage should see it weather the storm as well as any.

Z also lowered its fiscal 2020 DPS guidance by about 0%-7.5% to NZD 0.48-NZD 0.50 from NZD 0.48-NZD 0.54. We lower our fiscal 2020 EBITDAF and DPS forecasts by 12% and 6% to guidance midpoint NZD 410 million and NZD 0.49, respectively. At the announcement-battered NZD 5.70 share price, down 10% on the day, the dividend translates to an even more appealing fully imputed 8.6% yield. Z's intention remains to pay out 70%-85% of free cash flow, where free cash flow is defined as replacement cost, or RC, EBITDAF less RC tax, financing costs, and long-term integrity capital expenditures. The focus is on returning cash to shareholders, and the company says there is no near-term need to allocate material capital to noncore investments in the pursuit of revenue stream diversification. We agree with this conservative course of action.

Yield is the key attraction, and the shares remain materially undervalued in relation to it. We suspect that the market is overly focused on the low growth outlook rather than the income appeal of the stock. We applaud Z's focus on shareholder returns. The company's strategy of optimising the asset base and improving operating efficiency continues to pay off--return on equity is consistently above Australasian peers, and we expect this to continue to support the yield if not growth.

asb moaningstar recommendations taken with a grain of salt

[macduffy]

asb moaningstar recommendations taken with a grain of salt

ALL recommendations should be taken with several grains of salt!

Caveat emptor, remember!

[bohemian]

I went to see my broker at Craigs two months ago with the view of investing in ZEL for yield. I was given a firm no, they often call it so much better than what I do, well worth the money I pay them IMO.

[Beagle]

A bit like crying over spilt milk methinks, Beagle reckons he'd be seriously ill if he had to cope with my portfolio at times. Lol

Happy to continue to take a prudent approach to risk management mate. https://en.wikipedia.org/wiki/Efficient_frontier

I really think Morningstar are miles off beam. Average valuation was $6.91 and it will be interesting to see where this ends up in a week or so when the analysts have all had a chance to crunch the numbers and revise their forecasts. https://www.marketscreener.com/Z-ENE...098/consensus/