THL - Tourism Holdings

[Justin]

It’s good entry price now $2.8？

[BlackPeter]

It’s good entry price now $2.8？

Only if you think that they bottomed out. I doubt it.

[oldtech]

It’s good entry price now $2.8？

Disclaimer: I am no charting expert, far from it, but to me the chart looks ugly as. No sign that the campervan plummeting off the cliff has reached the bottom yet.

Also, you need to ask the more pertinent question, is this a business you feel comfortable investing in, at this point in time?

[Beagle]

Disclaimer: I am no charting expert, far from it, but to me the chart looks ugly as. No sign that the campervan plummeting off the cliff has reached the bottom yet.

Also, you need to ask the more pertinent question, is this a business you feel comfortable investing in, at this point in time?

Very sage advice there, agree 100%. Chart looks VERY ugly and I am not convinced in the slightest their very expensive fishing expedition into the deep and murky waters of U.S. tech will yield one scrap of value to the company.

[Oliver Mander]

It’s good entry price now $2.8？

Justin, that $2.80 I mentioned above was done when I sold out at $4.50 ages ago. I suspect if I re-did the analysis now, it would be quite a lot lower than that. Slowdown in global tourism impacting growth rates, which would impact the underlying assumptions I used. And completely agree about the extension of core capability to a digital strategy...real question over ability to execute (although I did factor that into my assessment ages ago).

[winner69]

Current market cap $417m - Book Value $277m ($1.86 per share)

Finance theory says the difference (market value added) is the expected future returns over its cost of capital.....hardly achieving that now if take risk into account.

So still priced to financially do heaps better than they have done recently .....like that $50m profit target is maybe out there for a reason.

I wouldn’t say thl is cheap at the moment....just reiteratingwhzt I said when share price was $6.80 and when it was $5 and when it was $4

[Lease]

Current dividend yield nearly 10%. Debt is supposed reduced by approx $70m due to fewer fleet purchase in USA.

THL will have a stronger balance sheet and pay good dividend, which should provide some support to current SP.

[BlackPeter]

Current dividend yield nearly 10%. Debt is supposed reduced by approx $70m due to fewer fleet purchase in USA.

THL will have a stronger balance sheet and pay good dividend, which should provide some support to current SP.

Classical dividend trap?

If we take the previous health scares as a template, than it might take a couple of years or more until people travel again as much as they do now. Add to that a huge backlog of unsold camper vans in a quite saturated market (all people I know who might want to buy such a thing have already one to clog up their driveway) and add on top of that a risky huge SW project they don't really have any expertise with, and earnings can go from here all over the place, but more likely down.

At some stage dividends will follow earnings. They always do.

[Lease]

Classical dividend trap?

If we take the previous health scares as a template, than it might take a couple of years or more until people travel again as much as they do now. Add to that a huge backlog of unsold camper vans in a quite saturated market (all people I know who might want to buy such a thing have already one to clog up their driveway) and add on top of that a risky huge SW project they don't really have any expertise with, and earnings can go from here all over the place, but more likely down.

At some stage dividends will follow earnings. They always do.

I said " Current dividend yield", not "future dividend yield". I assume dividend cut by half. It still has 5% much better than put money in bank.

Debt will be down substantially so THL can comfortably wait peak cycle to go over. Coronavirus should not have much impact on THL as Chinese tourists have hardly driven camper vans.

In regards to involve tech area, I think it's a right decision as it will certainly add value once succeed.

[BlackPeter]

I said " Current dividend yield", not "future dividend yield". I assume dividend cut by half. It still has 5% much better than put money in bank.

I feel with you in that regard more than you can imagine. Wrote some years ago similar posts defending MPG ... and look where they (and their nice dividends) are now.

Anyway - no need to argue, I have currently no interest in THL. Just a different view on the risks vs potential rewards I guess.

Debt will be down substantially so THL can comfortably wait peak cycle to go over. Coronavirus should not have much impact on THL as Chinese tourists have hardly driven camper vans.

True - mainland Chinese tourists won't be THL's major camper van customers ... however SARS brought a dip into all tourism activities - particularly on any depending on long haul flights. Pretty difficult to avoid these if you want to drive a camper van around NZ and live in Europe, Asia or the Americas ...

BTW- just remind me, how are these RV sales going? Sounded pretty scary around AGM time, didn't it?

In regards to involve tech area, I think it's a right decision as it will certainly add value once succeed.

If it works out, you might be correct. I used to work in the software industry and remember a figure of around 20% of large software projects which end up a success. The other 80% don't.

What makes you believe THL have what it takes to run a successful software project?