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![Quote](images/misc/quote_icon.png) Originally Posted by FarmerHamilton
Like the listed property stocks I think NTA is important because it gives you a good starting point.
In part but listed property stocks are valued on their yield. Variations occur due to debt levels, quality of buildings/tenants etc. The two (NTA and yeild) maybe confused as the value of a building is linked directly to its rental yield - an increase in NTA will be due to an increase in rental yield.
So at earnings of 7.6c per share, and a dividend policy of say 90% and a target yeild of 8% gives you a SP of 85c. If their profit doubles as you suggest, the that price will also double.
Edit: I am not sure what their dividend policy or whether they plan to distribute or use excess funds to pay down debt or expand.
Last edited by CJ; 03-04-2013 at 11:48 AM.
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Member
![Quote](images/misc/quote_icon.png) Originally Posted by CJ
In part but listed property stocks are valued on their yield. Variations occur due to debt levels, quality of buildings/tenants etc. The two (NTA and yeild) maybe confused as the value of a building is linked directly to its rental yield - an increase in NTA will be due to an increase in rental yield.
So at earnings of 7.6c per share, and a dividend policy of say 90% and a target yeild of 8% gives you a SP of 85c. If their profit doubles as you suggest, the that price will also double.
Edit: I am not sure what their dividend policy or whether they plan to distribute or use excess funds to pay down debt or expand.
You'd never get 8% yield on any dairy farm in NZ ( maybe a $10 payout ). I would think with a bumper year anticipated next year they will re-invest in there re-grassing program , re-invest in stock ( more culls ) , and keep the bank happy by paying down a chunk of the new debt taken on to buy out Mitsui.
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![Quote](images/misc/quote_icon.png) Originally Posted by FarmerHamilton
You'd never get 8% yield on any dairy farm in NZ ( maybe a $10 payout ). I would think with a bumper year anticipated next year they will re-invest in there re-grassing program , re-invest in stock ( more culls ) , and keep the bank happy by paying down a chunk of the new debt taken on to buy out Mitsui.
So why would I invest in a farm rather than a listed property trust? The end goal for the company cant be to sell the farm to an even bigger sucker?
Excuse me, I am a non farmer, probablly like the people offering 65c
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Member
![Quote](images/misc/quote_icon.png) Originally Posted by CJ
So why would I invest in a farm rather than a listed property trust? The end goal for the company cant be to sell the farm to an even bigger sucker?
Excuse me, I am a non farmer, probablly like the people offering 65c ![Wink](images/smilies/wink2.gif)
Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.
Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.
Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.
Last edited by FarmerHamilton; 03-04-2013 at 02:03 PM.
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Member
SMP prices going nuts !!
![Quote](images/misc/quote_icon.png) Originally Posted by FarmerHamilton
Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.
Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.
Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.
Stunning rise in skim milk powder prices, up +36% in NZ$ terms in two weeks; currency rose sharply overnight TWI = 79.3
Posted in Rural News April 12, 2013 - 08:31am, David Chaston
Skim milk powder prices in NZ$
Skim milk powder prices have moved sharply higher in the latest USDA market survey.
They rose an average of 36% in US dollar terms from their previous report on March 28.
Actual price rises in this market survey ranged from +26% to +45% for skim milk powder sold by Oceania suppliers which includes Fonterra.
In NZ$ terms the average rise was just as impressive - up by an average of 35%.
Over the same period, the New Zealand currency has risen just 2.6%.
The average skim milk powder price is now US$5,563 per tonne and $6,640 per tonne. These are rises of US$1,475 and NZ$1,756 over that two week period.
From the beginning of the year, skim milk prices have risen US$2,163 and NZ$2,563 per tonne, rises of +63% in either currency.
The rise in wholemilk powder prices has been strong too. They are up +11% in the past two weeks.
Synlait Farms has still not traded yet ... surely 1 kiwi out of 4.2m might be interested in "jumping in" soon ?? ...
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![Quote](images/misc/quote_icon.png) Originally Posted by FarmerHamilton
Synlait Farms has still not traded yet ... surely 1 kiwi out of 4.2m might be interested in "jumping in" soon ?? ...
Still no movement - spread is 75c and 115c.
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Member
![Quote](images/misc/quote_icon.png) Originally Posted by CJ
Still no movement - spread is 75c and 115c.
Yes, NZ's biggest industry , the thing we absolutely , no question, lead the world in ... dairy farming / milk production and we get a new listing with 100% focus on that industry and not a single trade in 3/4 weeks.
NZ's capital markets are so thin ... very frustrating the lack of liquidity.
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