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08-09-2016, 11:44 AM
#561
Originally Posted by winner69
Where it all ends up possibly depends on how more times they need to 'increase' this provision
Doubt whether his is the last time
That is the question - I have total provision increases (after tax) of around $55 over the past 2 years. The commentary is always the same - escalating costs, more EQC claims going over cap ($100k), more claims getting to settle. It has to end some time but the question is how bad will the damage be before we get to the end.
Luckily only hold a few at $1.32
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08-09-2016, 01:09 PM
#562
OK - I did some fiddling with my spreadsheet. If we assume that previous analyst predictions are right (and just need to be corrected by this recent announcement), that they cut their dividend in half for only this year (uneducated guess), that their growth continues to be quite limited (but not dropping either) and that this was really the last provision and nothing similar to the Canterbury Earthquakes happens anytime soon, than a Tower share should be worth (according to the BP scale and depending on what return you expect) between $1.40 and $1.50. This means, it is currently clearly undervalued. No reason to sell out in a hurry.
More interesting questions are:
- was this really the last provision for the Canterbury Earthquakes? Every million lost counts.
- how much is the software upgrade going to cost they are talking about - and how much will it improve business?
- will they manage to grow their business at some stage (currently its pretty much flat lining)?
- when are they going to "unleash the power of the Tower brand"
(I thought I have seen a similar sounding statement in the latest report, but can't find it now ... maybe I made it up myself?
And no, I don't have the answers to these questions. Just a couple of things to ponder about.
Last edited by BlackPeter; 08-09-2016 at 01:15 PM.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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08-09-2016, 01:37 PM
#563
Thats on BP Scale - what is it on the Richter Scale
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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08-09-2016, 01:42 PM
#564
When owning a bear, expect bad things to happen to your portfolio
Classic Bear Cycle textbook example being played out these last 18 months
Stage 3 Bear cycle (capitulation stage) is operating now.. methinks.
Last edited by Hoop; 08-09-2016 at 01:46 PM.
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08-09-2016, 02:14 PM
#565
Junior Member
Originally Posted by Adam H
How much do you guys think the recent announcement of higher than expected claims will affect the SP in the near term? Tried to 'pick the bottom' of TWR at 1.80, was thinking of cutting my losses at ~1.37 for last couple of weeks, SP is now close to 1.10! Well at least my loss in capital is helping people who were affected by the earthquakes
hahaaa..Me too. I am still holding my log at $1.80. Is a bit shame but I am ready to hold as long as I can.
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08-09-2016, 02:36 PM
#566
Member
Originally Posted by kelfy
hahaaa..Me too. I am still holding my log at $1.80. Is a bit shame but I am ready to hold as long as I can.
I bought some at $1.10 and I will average me down to $1.60. Hopes it would't go bust. Happy investing
http://www.nbr.co.nz/article/tower-s...costs-b-194013
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08-09-2016, 02:41 PM
#567
Originally Posted by Hoop
Classic Bear Cycle textbook example being played out these last 18 months
Stage 3 Bear cycle (capitulation stage) is operating now.. methinks.
If your hunch is correct - this would be good news ... I like the capitulation stage of bear cycles ... best time to buy!
DYOR, though ... too bad if it is not!
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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08-09-2016, 03:23 PM
#568
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08-09-2016, 05:53 PM
#569
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08-09-2016, 08:12 PM
#570
Originally Posted by bull....
not looking good, bad management glad im out as those Canterbury earthquake claims to settle good bring the company down. investment income will keep declining as well industry headwind so will profit cover the claims or any other event? risky as
dont think today is the last of the bad news, maybe they need to spend some more money on consultants to tell them how bad it could get
one step ahead of the herd
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