MPG - Metro Glass

[karlos68]

You were spot on.!!
Good call.

Cheers percy.

Metro Hamilton been pumping last few months, busiest it has ever been, my business has had best financial year since way back, flippin seems odd from a quick glance at shareprice that its been heading down.

Metro 5-4-17.png


Looking good

[silu]

I've been looking at this co for a while. Chart looks set for a reversal?

[BlackPeter]

I've been looking at this co for a while. Chart looks set for a reversal?

there are certainly a number of indicators pointing towards a reversal:

• 130 is a very strong support level (the trend changed at that level before) - and so far seems to hold;
• Unusual high volume on Friday would point to "capitulation"
• 130 is basically a fair fundamental valuation if the company suddenly reduces its growth to something like 2% p.a., otherwise it is a steal (their current 5 year CAGR is 13.3!)
• RSI(14) crossed back over the 30. Another indicator for an emerging uptrend ...

Discl: holding and accumulated between 130 and 132 ...
Obviously - DYOR;

[JoeGrogan]

there are certainly a number of indicators pointing towards a reversal:

• 130 is a very strong support level (the trend changed at that level before) - and so far seems to hold;
• Unusual high volume on Friday would point to "capitulation"
• 130 is basically a fair fundamental valuation if the company suddenly reduces its growth to something like 2% p.a., otherwise it is a steal (their current 5 year CAGR is 13.3!)
• RSI(14) crossed back over the 30. Another indicator for an emerging uptrend ...

Discl: holding and accumulated between 130 and 132 ...
Obviously - DYOR;

Totally agree with the fundamental valuation being pretty fair at the current level. Moreover, the 130 support level has been holding pretty firmly so far, looking forward to seeing how things play out.

[BlackPeter]

Anybody else noticed that we had this week volumes well above average and the SP keeps creeping up? Anyway ... due to popular demand I thought we can use the combined wisdom of sharetrader (well, yes - this is YOU) to do some SWOT analysis of the company:

Strengths:

• largest NZ Glass manufacturer with more than 50% market share.
• natural moat with plenty of sites allover the country: glass manufacturing is better close to the demand side - expensive transport
• reliable and consistent revenue growth in the past (CAGR over the last 5 years: 13.3 %)
• with one exception (FY2017) consistent EPS growth every year (and hey - while the FY17 results are not out yet, according to the forecast they are at worst 7.5% below last year, at best they achieved the same EPS as 2016)

Weaknesses:

• they clearly didn't plan sufficient contingencies for the teething problems they suffered in the recent equipment upgrades and schedule changes. Question is - do they learn from these mistakes or does this point to a systematic skill shortage?

Opportunities:

• building market booming
• Ongoing demand for houses and office buildings (ChCh rebuild, Auckland housing shortage, population growth)
• increased use of (high margin) specialised glas (like heavy duty) in modern building architecture
• ACC buying at an historic low - do they know something Fisher Funds and the markets didn't?
• A number of technical indicators this week point to a possible trend change (capitulation, SP increasing with good volume, RSI creeping back over 30)
• fundamentally ways undervalued if we assume they manage to keep current growth and earnings going (just put their EPS and CAGR into the Graham formula) - and be as conservative as you like
• Australian acquisition seems to do so far just fine (but early days) - another big growth opportunity?

Threats:

• building market might turn sour (but then ... we have a housing shortage - where will all the new immigrants sleep?)
• Australian extension might be more difficult (lots of the strengths and opportunities above missing for the Australian market, and MPG would not be the first Kiwi company losing money over there)
• Fisher Funds selling at an historic low ... do they know something we don't?
• Despite a small recovery this week - trend chart looks shocking
• there always might be a black swan just around the corner

On a more subjective front - I had some interaction during and after the recent downgrade with Nigel and and decided that I give them at this stage the benefit of the doubt ... but hey, this is just me.

Anybody who wants to add to the analysis above?

Discl: holding (XXL).
DYOR

[winner69]

BP - you will do very well getting into MPG at 130 odd. A great opportunity to get cheap undervalued shares.

What you said in your strengths is all true and will see Metro performing well into the future. There will always be new houses and buildings built (boom or bust times) and retrofitting double glazing and other inititiatives just add to the base

They'll still be doing well in years to come so now you got in cheap don't be tempted to sell ...but then again at heart I think you are a trader so will take profits when punters perceive 'trouble'

[winner69]

Hey BP - you on a roll with your recent big entries into SUM and MPG

Might even convince you about Pushpay as your next play - really cheap at the moment

[BlackPeter]

...

They'll still be doing well in years to come so now you got in cheap don't be tempted to sell ...but then again at heart I think you are a trader so will take profits when punters perceive 'trouble'

Hey BP - you on a roll with your recent big entries into SUM and MPG

Might even convince you about Pushpay as your next play - really cheap at the moment

Hmm - define "trader" vs "investor" - but this is probably stuff for a different thread.

Re PPH - how low would the SP for a loss making hyped up start up need to be to qualify as "cheap"? I guess sure, the market might drive it up the XRO, RAK, WYN or PEB-hill, and with some of them at some points in time you could even say with the benefit of hindsight that this was cheap (i.e. less than what the market was prepared to pay at a later stage). However - from a fundamental perspective was so far none of these companies (including PPH) ever "cheap".

But probably better to continue this discussion on the PPH thead ...

[Beagle]

Anybody else noticed that we had this week volumes well above average and the SP keeps creeping up? Anyway ... due to popular demand I thought we can use the combined wisdom of sharetrader (well, yes - this is YOU) to do some SWOT analysis of the company:

Strengths:

• largest NZ Glass manufacturer with more than 50% market share.
• natural moat with plenty of sites allover the country: glass manufacturing is better close to the demand side - expensive transport
• reliable and consistent revenue growth in the past (CAGR over the last 5 years: 13.3 %)
• with one exception (FY2017) consistent EPS growth every year (and hey - while the FY17 results are not out yet, according to the forecast they are at worst 7.5% below last year, at best they achieved the same EPS as 2016)

Weaknesses:

• they clearly didn't plan sufficient contingencies for the teething problems they suffered in the recent equipment upgrades and schedule changes. Question is - do they learn from these mistakes or does this point to a systematic skill shortage?

Opportunities:

• building market booming
• Ongoing demand for houses and office buildings (ChCh rebuild, Auckland housing shortage, population growth)
• increased use of (high margin) specialised glas (like heavy duty) in modern building architecture
• ACC buying at an historic low - do they know something Fisher Funds and the markets didn't?
• A number of technical indicators this week point to a possible trend change (capitulation, SP increasing with good volume, RSI creeping back over 30)
• fundamentally ways undervalued if we assume they manage to keep current growth and earnings going (just put their EPS and CAGR into the Graham formula) - and be as conservative as you like
• Australian acquisition seems to do so far just fine (but early days) - another big growth opportunity?

Threats:

• building market might turn sour (but then ... we have a housing shortage - where will all the new immigrants sleep?)
• Australian extension might be more difficult (lots of the strengths and opportunities above missing for the Australian market, and MPG would not be the first Kiwi company losing money over there)
• Fisher Funds selling at an historic low ... do they know something we don't?
• Despite a small recovery this week - trend chart looks shocking
• there always might be a black swan just around the corner

On a more subjective front - I had some interaction during and after the recent downgrade with Nigel and and decided that I give them at this stage the benefit of the doubt ... but hey, this is just me.

Anybody who wants to add to the analysis above?

Discl: holding (XXL).
DYOR

Good well balanced post and a very fair synopsis of the situation.

[bull....]

doing a new tiled shower at home with glass sides , metro glass said 3 weeks before glass ready I don't know if that's normal but seems a long time to wait for glass so I guessing they must be busy