MFT - Mainfreight. Global Freight & Logistics

[alokdhir]

bounce back just from the big sell down prior to announcement eh ... what ya think ?

See its longterm charts ...then U will easily figure out what quality company is MFT ...Rawz mentioned many many times that only 3 times its SP went below 200DMA in last 25 years or so ....This times is exact replica of 2007-2009 downtrend ...after that see what happened to its SP ....U sure are a great chartist u will make out in no time ...only problem maybe u are use to reading or watching 30 minute charts and not longer term ...lol

Since mid July its been trading below its 30DMA ...today first time it cud cross it ...now no looking back mate ...maybe a small revisit of $ 60 level but I wont bet on it .

[bull....]

See its longterm charts ...then U will easily figure out what quality company is MFT ...Rawz mentioned many many times that only 3 times its SP went below 200DMA in last 25 years or so ....This times is exact replica of 2007-2009 downtrend ...after that see what happened to its SP ....U sure are a great chartist u will make out in no time ...only problem maybe u are use to reading or watching 30 minute charts and not longer term ...lol

Since mid July its been trading below its 30DMA ...today first time it cud cross it ...now no looking back mate ...maybe a small revisit of $ 60 level but I wont bet on it .

chart levels before covid juiced everything im looking at

[Muse]

I'm a very content, long-term holder. But couldn't bring myself to add to the holding over the last week or after reading the report.

According to Jarden, MFT's rolling 1 year forward PE multiple from October 2005 to now is ~17.5x.

EPS in 1H24 was 1.24 rounded, assume some marginal increase in 2H of say of 5% (no idea what the right % is, but marginal improvement in 2H was MFT's words not mine), gets you to full year EPS of about 2.54. That puts MFT on a prospective FY24 PE of ~24.6x, or about 40% higher than its long term average forward PE multiple. Trough / 'close to trough' year earnings sure maybe ought to command a higher PE rather than its straight LT average, but 40% not so sure. Airfreight prices still have some way to come down. Anyway never going to pick the bottom and by the time you do the market is forward looking, I'm just not so sure the hockey stick projections are right.

But as I say, happy to hold, see how things go & if the price looks right perhaps pick up some more otherwise a big investible world out there. Think its wise not to be overly committed to buying something (or indeed committed to selling or holding).

[alokdhir]

https://www.nzherald.co.nz/business/...O5E2THBRYXVTA/

[Muse]

https://www.nzherald.co.nz/business/...O5E2THBRYXVTA/

Good on Tim Williams (CFO) for giving such long notice for his retirement. Certainly didn't spook any horses. A respectable, long career he's had and certainly seen some stuff while he was there, including the huge growth in the business and all the complexity that brings, covid, all the funding for its property empire expansion.

It would be interesting to look at MFT's property metrics compared to its peers....ie MFT's property portfolio as a % of its enterprise value relative to its peers, and how does MFT's reported PE compare to its PE net of property - if it leased all its facilities. IE mcap less property / NPAT less a notional rent (property value x say 6% industrial cap rate, or whatever)

[alokdhir]

Predictability of MFT business ie great estimates of its forward earnings is a big plus ...Street estimates of this HY eps was $ 1.19 ...very close to $ 1.24 actuals ...similarly FY 24 estimates are $ 2.77 ...actuals maybe $ 2.85+ ...next year EPS forecasted is $ 3.26 and so on ...normally they are very open and transparent with their current and forward operations .

As per Market Screener last 5 years average PER is 25.1 ...more then last 10 years as they started growing faster as their network spread .

Now if one wants this superb quality company at 25 times forward then one can argue 25 times FY25 $ 3.26 + = $ 81 as yearly target .

I fully understand sentiment is poor and conditions are not ideal so maybe not looking as compelling VALUE to many when one can see other smaller companies like TRA etc doing reasonably well at much lower valuations ...but MFT has earned its stripes to get this market valuations ...after all many institutional investors pay hefty premiums for quality and corporate governance etc

https://www.marketscreener.com/quote...2059/finances/

[Muse]

Predictability of MFT business ie great estimates of its forward earnings is a big plus ...Street estimates of this HY eps was $ 1.19 ...very close to $ 1.24 actuals ...similarly FY 24 estimates are $ 2.77 ...actuals maybe $ 2.85+ ...next year EPS forecasted is $ 3.26 and so on ...normally they are very open and transparent with their current and forward operations .

As per Market Screener last 5 years average PER is 25.1 ...more then last 10 years as they started growing faster as their network spread .

Now if one wants this superb quality company at 25 times forward then one can argue 25 times FY25 $ 3.26 + = $ 81 as yearly target .

I fully understand sentiment is poor and conditions are not ideal so maybe not looking as compelling VALUE to many when one can see other smaller companies like TRA etc doing reasonably well at much lower valuations ...but MFT has earned its stripes to get this market valuations ...after all many institutional investors pay hefty premiums for quality and corporate governance etc

https://www.marketscreener.com/quote...2059/finances/

Don't really agree with all that.

Look at the EPS revisions...fy24 EPS 4.37 in November 2022...one year later it fell to 2.77 before todays announcement. Similar picture to FY25 and FY26.

The street estimates you refer to for 1H 2024 consist of only 1 analyst from the 5 that cover mainfreight. The other 4 didn't specifically provide 1H forecasts, craigs and jarden for instance made previews where they gave a rough PBT expectation (actual came in lower than craigs and higher than jardens). The result should have been reasonably well signaled given the 1Q guidance they provided at the (AGM?).

I agree MFT don't use as many superlative adjectives as many other firms, but they didn't really at the peak of the freight bubble come out and say it was indeed a pricing bubble. The management team is universally well regarded and about as blue chip as they come on the NZX (exception of perhaps FPH) and people pay up for that as you say. The last time I bought MFT was $45 bucks back in 2020 and I was grimacing through my teeth when I clicked the buy button, as I did most other times I bought. and its worked out well.

The 5 yr ave PE per marketscreener is 25.1 as you say but a few bits there...I'm unclear if those are prospective forward multiples or historic, and that's a big point. That is a sample set on just 5 days, whereas the long term ave per jarden is a daily average since 2005, a much bigger sample set. The last 5 years have been plagued by uncertainty on what maintainable earnings were. and interest rates have been the lowest in recent memory. I think its too hard to have a view on if its growing faster or slower over the last 5 years vs previously given the freight price bubble so no comment there. So I certainly regard 17.5x a better representation of an appropriate PE on a through the cycle basis than 25x.

[alokdhir]

Don't really agree with all that.

Look at the EPS revisions...fy24 EPS 4.37 in November 2022...one year later it fell to 2.77 before todays announcement. Similar picture to FY25 and FY26.

The street estimates you refer to for 1H 2024 consist of only 1 analyst from the 5 that cover mainfreight. The other 4 didn't specifically provide 1H forecasts, craigs and jarden for instance made previews where they gave a rough PBT expectation (actual came in lower than craigs and higher than jardens). The result should have been reasonably well signaled given the 1Q guidance they provided at the (AGM?).

I agree MFT don't use as many superlative adjectives as many other firms, but they didn't really at the peak of the freight bubble come out and say it was indeed a pricing bubble. The management team is universally well regarded and about as blue chip as they come on the NZX (exception of perhaps FPH) and people pay up for that as you say. The last time I bought MFT was $45 bucks back in 2020 and I was grimacing through my teeth when I clicked the buy button, as I did most other times I bought. and its worked out well.

The 5 yr ave PE per marketscreener is 25.1 as you say but a few bits there...I'm unclear if those are prospective forward multiples or historic, and that's a big point. That is a sample set on just 5 days, whereas the long term ave per jarden is a daily average since 2005, a much bigger sample set. The last 5 years have been plagued by uncertainty on what maintainable earnings were. and interest rates have been the lowest in recent memory. I think its too hard to have a view on if its growing faster or slower over the last 5 years vs previously given the freight price bubble so no comment there. So I certainly regard 17.5x a better representation of an appropriate PE on a through the cycle basis than 25x.

As I am not an accountant so cant really do the maths but I do believe in the collective wisdom of the market . Market can be wrong for some time but not all the time for last so many years . Charts are a representation of market behaviour about that particular stock ...though I am not a chart / TA expert but I do know some simple basics ...if any stock remains 95% of the time in last two decades over its 200 DMA means its really liked by the market ...for what reasons ...Do we need figure that out in detail ? If one has some faith in collective wisdom of the market then its simpler to follow the trend ...reasons will reveal .

U bought @ $ 45 in 2020 ... FY20 eps was $ 1.60 ...thus u bought at almost 28 current PER and 24 forward ...not too much different then 25 PER I stated as per market screener data !!!

[Muse]

As I am not an accountant so cant really do the maths but I do believe in the collective wisdom of the market . Market can be wrong for some time but not all the time for last so many years . Charts are a representation of market behaviour about that particular stock ...though I am not a chart / TA expert but I do know some simple basics ...if any stock remains 95% of the time in last two decades over its 200 DMA means its really liked by the market ...for what reasons ...Do we need figure that out in detail ? If one has some faith in collective wisdom of the market then its simpler to follow the trend ...reasons will reveal .

U bought @ $ 45 in 2020 ... FY20 eps was $ 1.60 ...thus u bought at almost 28 current PER and 24 forward ...not too much different then 25 PER I stated as per market screener data !!!

Yes - and I'm looking at a chart of MFT's forward PE from 2005 to now - "a representation of market behaviour of a particular stock" though the cycle, overlaid with standard deviations. Charting can incapsulate both technical and fundamental data, and I know which one has created more wealth for me over the decades.

You are correct though the forward PE when I purchased was about 24x, albeit on covid impact earnings.

anyway I'm a holder, just not a buyer

[alokdhir]

Yes - and I'm looking at a chart of MFT's forward PE from 2005 to now - "a representation of market behaviour of a particular stock" though the cycle, overlaid with standard deviations. Charting can incapsulate both technical and fundamental data, and I know which one has created more wealth for me over the decades.

You are correct though the forward PE when I purchased was about 24x, albeit on covid impact earnings.

anyway I'm a holder, just not a buyer

Like ways ...me a holder since 2010 and very satisfied with its performance . Hopefully it will keep doing the same ahead