Quote Originally Posted by BlackPeter View Post
Mainfreight - one of these blue chips where everybody always seems to agree that they are too expensive - just the market has a different view. Always wondered how it is possible that the market is disagreeing with the experts which are supposed to form the market - but maybe the experts who form the market are not the experts who talk about the market?

I bought into Mainfreight at peak Covid (well, in 2020 this is) - and my only regrets to date are that I didn't buy more of them at that stage when they've been on special. You see - these bl**dy diversification policies. Always trust your favourite broker when they tell you that transport companies do well towards the end of a financial crisis.

Reduced slightly above $90 to stick with my diversification policies (maybe not so bad) ... but still kept a significant parcel.

Question is - are they really too dear and should I sell?

Looking into the fundamentals:

forward PE (3 years) is 29.4. Not cheap.
forward earnings CAGR is 16.5. Well, maybe 29.4 is cheap after all?

Grahams formula returns a value of $122.50 ... but sure, if we modify the parameters according to beagle ... it is only $78.25;

Sigh. Share still looks reasonably priced, but not cheap. So - how did they do after the last really big crisis (the GFC)?

MFT during and after GFC - Copy.JPG

Actually - they went in 4 years after the end of the GFC in early 2009 from $3.30 to $10.50. Not too bad after an economic crisis, isn't it? 35% p.a. appreciation.

Maybe a reason to keep the shares?

Company is well managed and they use the current profits to improve their presence and network all over the globe, as any prudent business man would do.

I think they still have lots of runway left.

I shall keep them (and manage them within my diversification policies).

I think its a company too good to not be part of a well diversified portfolio.
I have learnt from holding them since 2010 ...longer u keep them happier u r . U r very lucky to buy so cheap during Covid selling ....now keep them forever should be theme ...after all u cant loose at all ...its only WIN WIN for u . ....One way to go around diversification compulsions of a good stock is to value them at buy prices not market values ...that lets u hold blue chips longer even if they had a great run recently ...