-
13-12-2019, 12:56 PM
#1401
Originally Posted by Beagle
The only safe trade was off the open at $4.01 which I didnt take.
-
13-12-2019, 01:07 PM
#1402
Member
Yes, would have loved to pick some more up at $4.01. Still 10% yield at 40c Divi. Hard to say. I live right next door to one and it is busy all the time, more so than the Gull down the road.
-
13-12-2019, 01:13 PM
#1403
Originally Posted by couta1
The only safe trade was off the open at $4.01 which I didnt take.
That's not a safe trade mate. This could easily go into the early- mid $3's or even significantly worse next year. Impossible to overstate the risks of pressure on fuel margins. If the Government get just one tenth of their estimated 18-32 cent, (mid point is one tenth is 2.5 cents per liter) reduction in margins ZEL's profit will be absolutely decimated as they only make 3.5 cents per liter after all costs and tax. Even if the Govt get one twentieth (1.25 cents per liter average) of their estimated savings at a retail price level, this is devastating for ZEL's operational profitability.
The potential for further significant falls in EBITDA for FY21, just from annualising the forecast margin in Q4 to a full year effect for FY21 is bad enough...then you start factoring in further margin compression from regulatory changes and this could get extremely ugly next year.
I haven't got a new price target...my nose is telling me to "STAY OUT" no matter how cheap this appears to be.
Might work out a no growth PE of 10.0 on real after tax earnings on EBITDA of $300m and see what that suggests is fair value. Can't use a yield model as its anyone's guess what future dividends will be.
Okay lets go there. My very early seat of the pants estimate of EBITDA for FY21 is just $300m with the expected tighter margins in Q4 FY20 annualised for full year effect in FY21 and some extra additional pressure to margins from the fuel price study, wholesale market transparency and premium fuel pricing display.
In FY19 there was $195m of costs below the EBITDA line so that implies about $105m before tax, ~ $75m after tax = 19 cents per share for FY21.
Pretty clear this is at very best a no growth company so put a no growth PE of 10 on that and you can get to $1.90 as fair value pretty easily if things keep going south like I think there's a good chance they will.
There is potential for this stock to head quite materially south from here in the foreseeable future.
Last edited by Beagle; 13-12-2019 at 01:31 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
-
13-12-2019, 01:29 PM
#1404
Originally Posted by Beagle
That's not a safe trade mate. This could easily go into the mid $3's or even worse next year. Impossible to overstate the risks of pressure on fuel margins. If the Government get just one tenth of their estimated 18-32 cent, (mid one tenth is 2.5 cents per liter) reduction in margins ZEL's profit will be absolutely decimated as they only make 3.5 cents per liter after all costs and tax. Even if the Govt get one twentieth (1.25 cents per liter average) of their estimated savings at a retail price level, this is devastating for ZEL's operational profitability.
The potential for further significant falls in EBITDA for FY21, just from annualising the forecast margin in Q4 to a full year effect for FY21 is bad enough...then you start factoring in further margin compression from regulatory changes and this could get extremely ugly next year.
I haven't got a new price target...my nose is telling me to "STAY OUT" no matter how cheap this appears to be.
Might work out a no growth PE of 10.0 on real after tax earnings on EBITDA of $300m and see what that suggests is fair value. Can't use a yield model as its anyone's guess what future dividends will be.
I think your mixing up your trading with long term holding there Beagle, in at $4.01 and out just after 11am at $4.30 ish would have been the way to go(Like a rat up and down a drain pipe)
-
13-12-2019, 01:44 PM
#1405
Anybody bother to listen to the conference call.
Whatever a 20% drop in earnings in F20 is a bit of a disaster
Think management have been sucked in by their own glossy presentations and forgotten the basics of selling what is a commodity.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
-
13-12-2019, 01:53 PM
#1406
At this rate of earnings decline earnings won’t be much more when they were pre Caltex
Wasn’t there zillions in synergies they were going to capture.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
-
13-12-2019, 02:26 PM
#1407
Originally Posted by winner69
At this rate of earnings decline earnings won’t be much more when they were pre Caltex
Wasn’t there zillions in synergies they were going to capture.
As recently as May last year, see page 4, (they were describing themselves as among other things a "Growth Company"), and not just in this presentation either. http://nzx-prod-s7fsd7f98s.s3-websit...097/300554.pdf
Some of the "creative talk" in their presentations is very corrosive to senior management's credibility. I take whatever they say with 101 grains of salt now...
Suppose the new CEO of SKY thinks they're going to turn themselves around into a growth company too. How's that working out for them so far...
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
-
13-12-2019, 03:07 PM
#1408
Originally Posted by Beagle
As recently as May last year, see page 4, (they were describing themselves as among other things a "Growth Company"), and not just in this presentation either. http://nzx-prod-s7fsd7f98s.s3-websit...097/300554.pdf
Some of the "creative talk" in their presentations is very corrosive to senior management's credibility. I take whatever they say with 101 grains of salt now...
Suppose the new CEO of SKY thinks they're going to turn themselves around into a growth company too. How's that working out for them so far...
Need to ramp up the coffee, pies and sweet sales methinks
That’ll solve the earnings problem
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
-
13-12-2019, 04:11 PM
#1409
Last time I checked store sales were up a whopping 10% so without that...
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
-
13-12-2019, 04:43 PM
#1410
ZELBonds.JPG
only a third of a billion (approx.) to service on the NZDX
interim bal sheet says over a whole billion.
For clarity, nothing I say is advice....
Tags for this Thread
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules
|
|
Bookmarks