MPG - Metro Glass

[winner69]

........We have a housing shortage. All parties want to build MORE houses than present.
.

No person or authority has ever stopped people from building more homes - they just cant afford too

If there is a 'housing shortage' there won't be a major catch-up phase unless something significant is done to improve new housing affordability or taxpayers hugely subsidise or . Today is as good as it's going to be for Metro et all for several years (or maybe ever)





Marama Fox only one who seems to be proactive - now out of government she appears as if she is actually going to build some houses ...lots of cheap houses

[BlackPeter]

Considering not a lot has really changed since ASH meeting you have certainly changed your tune? It's been known for months Mr Peters was going to be the kingmaker so I'm not sure why everyone finds that so surprising now it's come to pass.

We have a housing shortage. All parties want to build MORE houses than present.

You were the biggest supporter of this stock for a long time so I am a bit puzzled as to why you are throwing in the towel.

Jeremy, not throwing in the towel ... just in the process to reevaluate some facts I know about the company and adding some new things I learned about them through further analysis and in discussion with others.

I did reduce my holding and discovered that it is nice to see the repurposed capital back at work ...

And sure - I could just go quiet, but I thought it is more fair to others to indicate that I do see now as well some new facts about MPG which may or may not change the balance of the assessment.

It is like reevaluating a house you want to buy or own. You see some things and put an value on them. And than somebody shows you another feature you didn't notice before (be that a leaky roof or a noisy neighbour ...). This may or may not change your assessment of the value even if your initially found facts still stand.

As everybody else - I don't know where the markets go from here, but I start to see where the currently so busy bears are coming from. However - I do think that the current SP is fair value (even if we assume ZERO growth from here). Markets have however a tendency to overreact.

Looking at the political situation:

We agree that there is a housing shortage. National's plan was to make subdividing easier which would have created a lot more houses like we have at current. Good for companies like MPG.

Not sure what Labour's plan was - they talked about building houses, which the government obviously does not do. I think whatever they plan to do will take a lot of time ... and as you heard - corporate building is already impeded by the lack of a clear political decision.

Winston's remedies seem to be more around reducing demand by limiting immigration and kicking people out. Does not require a lot of additional windows.

But the biggest problem in my view is currently time. If we would have a new government and a clear direction now, than people could still make prior to the summer dip decisions and plans about the biggest project of their life. Information about possible subsidies, likely interest rate development, more or less planning restrictions are crucial for any new builder. Winston playing games for another 4 weeks might shift these decisions into 2018.

But still ... MPG might be currently at the bottom and all up from here. If I would know, I either would have sold them all or I would have kept them all. I don't. DYOR.

[Beagle]

Interested to hear your thoughts Beagle, take out the terrible chart and tell me what this company is worth if it delivers similar results to last year and NPAT of around 20m?

My gut instinct says they may not make $20m mate. What's it worth ?, how long or short is a bit of string ? Its been a huge disappointment since listing. I think the key here is that this company has a very short track record on the market so its impossible to really judge the veracity of their internal forecasting systems but I am sure you will recall that Brian Gaynor recently said some pretty scathing things to say about this company so you would be wise to expect the unexpected.

In uncertain times its only natural for people to want to gravitate their portfolio towards well proven blue chip performers with a long and well established track record, companies with a well proven business model. How this company would stand up to a good recession if we were unlucky enough to have another one is frankly anyone's guess. The other thing is with seemingly a fiasco every other month in this building sector from one company or another I think Percy made a good point a while back and suggested why bother ? Frankly I don't have an answer for that so I've decided to simply avoid the building sector.

I wouldn't rule out a return when the technical's look more promising but at this stage who knows where the bottom is ? I simply felt it prudent to cauterize the wound and stop the bleeding at this stage.

[winner69]

Codecracker not a challenge this morning - only 58 seconds to complete

So did a DCF on Metro to give the brain cells a bit of a workout

Using Metro's own assumptions 5 year growth 7.9% pa for next 5 years (then 2.9% oa forever) and some margin expansion a DCF valuation is $1.92

Working backwards to current share price of $1.10 the market is only pricing in five year growth at 2.0% pa with no margin expansion

Seeing how Metro seemed to have pissed off many fund managers maybe current price is about right. Even so that in theory that should still give a 10% pa return plus dividends

Metro need to get the confidence of fund managers back before the share price will get to $1.50 plus. It is the big punters that really control the share price.

Jeremy asked Roger what's Metro worth. Roger knows these things

My views posted earlier are still relevant

If Metro achieve their financial aspirations as outlined at ASM worth about $2.00 today

At current price only about 2% pa revenue growth with no margin expansion is priced in

So depending on what you believe a reasonable valuation is somewhere between $1.00 and $2.00. Takes your pick

The cheats way is expected eps of 10c/11c with a PE of 10 about current price - using the PE punters loved at the PE a valuation of $1.50/$1.70

Another cheats way is dividend yield - currently about 7%/8% - seems fair enough but allowing for risk maybe something a bit lower is more reasonable

Again you could always cheat a bit more and use the old dividend discount model. On a 6 cent divie implied growth at current price is about 4% pa

But main overriding factor at the moment is that fund mangers / instos not that keen on Metro at the moment and they obviously see current price as a fair ish value (no real reason to buy in or top up). Until that changes share price likely to stay at low(ish) levels

So takes your pick - that's how markets work - but it seems hard to justify heaps more than the current price - unless you believe Metro can achieve their aspirational financial targets (some directors obviously think so)

[winner69]

Are Milford actually selling?

Gaynor might have packed a sad but Milford seem to be hanging in there

That SSH yesterday was the first one since June 2016 (15 months ago) and showed that they had bough and sold heaps of shares over that period with a net sell of 1.8 million shares

The sells averaged $1.54 which sort of suggests that there hasn't been a wholesale dump lately

I reckon Milford not that pissed off that they will sell / dump the 12.6 million shares left in a hurry. In spite of Gaynors ranting they possibly see 'value' at current price and will continue to hold a decent chunk

[winner69]

Talk aout goodwill on Metro books. that $130m related to the carry on around IPO time and $40m odd is AGG related.

If really interested about the $130m odd you need to go back to the notes in the 2015 Annual Accounts to see how it originated (when they acquired Metroglass Holdings)

Also try to understand what the 'Group Reorganisation Reserve' of ($170.7m) which is included in Equity means.

Good luck

[Beagle]

Are Milford actually selling?

Gaynor might have packed a sad but Milford seem to be hanging in there

That SSH yesterday was the first one since June 2016 (15 months ago) and showed that they had bough and sold heaps of shares over that period with a net sell of 1.8 million shares

The sells averaged $1.54 which sort of suggests that there hasn't been a wholesale dump lately

I reckon Milford not that pissed off that they will sell / dump the 12.6 million shares left in a hurry. In spite of Gaynors ranting they possibly see 'value' at current price and will continue to hold a decent chunk

Apparently he had more to say at the annual meeting. I think its clear he's deeply unimpressed. One of the very few advantages retail shareholders have over institutions is they can enter or exit a stock quickly without unduly affecting the share price. Institutions don't enjoy that luxury.

[bull....]

90c looking good come to daddy

[trader_jackson]

Hard to think this was posted on 28-08-2017... lucky I didn't catch the falling class at $1.09, I would be bleeding even more today.

Ouch... another new record hit today, but not a good one: a record low (of 98 cents).

Under 10 PE now, maybe if it got to around 7 PE we might see a bottom, although this would (likely) reflect the market pricing in no growth.

[Oliver Mander]

Will admit that I sold out on Friday as a stoploss - about a 25% loss, overall, the only serious red ink on my portfolio dammitall. My original research said the long-term fundamentals still should be good, but the company seems to struggle to turn that into actual bottom-line growth. A few more negative macro signals now floating around as well. Will look at again if it reprices significantly.