Share Investor Blog

Stock of the Week: Sky City Entertainment Group

2009-07-03T08:08:00.003+12:00

This Stock of the Week is all about self interest, no not really, well maybe, nah, you be the judge.

Sky City Entertainment Group [SKC.NZ] makes up a large part of my portfolio by far but my main reason for including it this week is that the stock price has fallen below the recent capital raising price of NZ$2.61.

The share price closed at $2.58 yesterday, close to the multi-year low of $2.54.

It could go lower and that is the hard thing to pick, just when to buy on weakness. As I have said before I am interested in buying more because I got my shareholding diluted in the capital raising.

The stock is currently paying a gross dividend of over 12%, subject to a 20% lower dividend payout come full year profit announcement late August but that represents good value considering profits are holding up well to last years figures -a rarity in profit results and company health over the last year of the current economic crises.

As I said there could be some more downwards pressure on the SKC share price to come (I haven't seen anything material for the recent drop) so best if you are interested in buying take a close look at what is happening before you pounce.

I hold the stock at a cost of below $1.90 per share.

Good Luck!

Stock of the Week Series

Burger Fuel Worldwide
Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances

Sky City Entertainment Group @ Share Investor

Sky City share offer confusing and unfair for smaller shareholders
Sky City CEO doubles down
Sky City Entertainment 2009 Interim Profit Review
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

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Seppuku looking like an attractive alternative to doing nothing

2009-07-03T00:01:00.000+12:00

I am not asking for a ritual Seppuku that originated from Japanese Samurai Swordsmen and is still practiced occasionally by shamed Japanese CEO's today but bloody hell I would like at least an attempt at showing responsibility and least some sense of shame when our business leaders do wrong. (gee I have been writing some negative stuff over the last few days - I will be back to stocks next column, I promise)

New Zealand leaders, especially the CEOs of our listed companies are renown for not taking responsibility for making mistakes and costing shareholders precious dollars and company reputations, in fact some have made an art of the practice.

Our company and cultural history is unfortunately littered with a very long list of them.

I have one such man in my sights for special attention, John Bongard from Fisher & Paykel Appliances [FPA.NZ]

When the company announced a few days back the appointment of two new board members from their largest shareholder and recent savior of the company from collapse Haier, one might have expected JB to take a running leap off a short board table and announce he would be taking early retirement from his CEO position.

It seems that it s not to be but that is not unusual in these days of avoidance of responsibility

John Bongard borrowed too much money too quickly to move the New Zealand domiciled and created company to overseas manufacturing bases and buying an overpriced European appliance maker a few years ago with borrowed money certainly didn't help -sure expand, but do so in a financially prudent and methodical manner without putting your company and your shareholder's moola at risk.

The thing is you eventually have to pay the money back or default on your loans as FPA did.

Go on, while I'm having a bitch I should be having a go at the rest of the board as well because they voted along with JB.

Lets hope the two Chinese gentlemen that have just put their feet under the board table can sort out the bottom drawers from the top loaders.

The company will simply limp along in the same hopeless direction they have under Bongard if they don't.

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Share Investor's NZX Market Diary: 6 -13 July 2009

2009-07-03T00:00:00.001+12:00

Share Investor's NZX Weekly Diary: New Zealand's most comprehensive and up to date earnings, dividend, company meetings, upcoming listings dates from the New Zealand Stock Exchange and its listed companies.

Monday, 06 July 2009 to Monday, 13 July 2009.

Monday, 06 July
F&C Global Smaller Companies PLC Ex Div 3.29 cps

Tuesday, 07 July
Last day of trading in IFTWB.

Friday, 10 July
Allied Work Force Group Limited Record Date Final Dividend
Caledonia Investments Plc Record Date Final Dividend

Monday, 13 July
Allied Work Force Group Limited Ex Div 3 cps
Caledonia Investments Plc Ex Div 33.8 cps

Upcoming Results

Issuer	Period	Expected Release Date
The New Zealand Refining Company Limited	Half Year	18/08/2009

Upcoming Listings

Company Name	Security Code	Issuer Code	Market	Listing Date
Works Finance (NZ) Limited	WKS020	WKS	NZDX	15/07/2009

* Within a reasonable time after the Closing Date for the Tranche, and in any event not more than 10 Business Days after that date.

Upcoming Dividends

Ex dates from Friday 26 June to Friday 10 July

Code	Company	Period	Ex Date	Amount*	Currency	Imputation Credit*	Payable
FCS	F&C Global Smaller Companies PLC	Final	06 Jul	3.29	GBP	0.0000	06 Aug
* cents per share

Upcoming Company Meeting Dates

Monday, 26 June 2009 to Tuesday, 28 October 2009

	Issuer	Type	Date	Location	Time

+	Restaurant Brands New Zealand Limited	AGM	26/06	The Duxton Hotel, Wakefield Street, Wellington	11.00am
	Pike River Coal Limited	SGM	26/06	Te Aro Room, Level 4, The Terrace Conference Centre, St John House, 114 The Terrace, Wellington	10.00am
*	Pacific Edge Biotechnology	SGM	29/06	The Centre for Innovation, 87 St David Street, Dunedin	3.00pm
	Property Finance Group Limited	SGM	29/06	TBA	TBA
	Sealegs Corporation Limited	AGM	17/07	Takapuna Boating Club, 39 The Strand, Takapuna Beach, Auckland	TBA
	Canterbury Building Society	AGM	22/07	The Bradford Room, Ashburton Events Centre, Wills Street, Ashburton.	5.30pm
	Xero Limited	AGM	23/07	TBA	TBA
	Kingfish Limited	AGM	24/07	Ellerslie Event Centre, Auckland	10.30am
	Botry-Zen Limited	AGM	24/07	Dundin Public Art Gallery, Dunedin	3.00pm
	Widespread Portfolios Limited	AGM	26/07	The Wellesley, 2-8 Maginnity Street, Wellington	5.00pm
	Methven Limited	AGM	28/07	TBA	TBA
	The National Property Trust	AGM	28/07	Ellerslie Event Centre, Auckland	2.00pm
	Mainfreight Group Limited	AGM	30/07	Great Northern Room, Ellerslie Racecourse, 80-100 Ascot Avenue, Greenlane, Auckland	2.30pm
*	Comvita Limited	AGM	30/07	TBA	TBA
	Kermadec Property Fund Limited	AGM	31/07	Pinot,231 Orakei Road, Remuera, Auckland	10.00am
	Jasons Media Travel Limited	AGM	31/07	Novotel Auckland, Ellerslie	2.30pm
	BLIS Technologies Limited	AGM	31/07	TBA	TBA
	Wakefield Health Limited	AGM	07/08	TBA	TBA
	Horizon Energy Distribution Limited	AGM	06 08	Ohope Charter Club, Bluett Road, Ohope	10.00am
	Fisher & Paykel Appliances Holdings Limited	AGM	17/08	TBA	TBA
	Seeka Kiwifruit Industries Limited	AGM	18/08	TBA	TBA
	Mowbray Collectables Limited	AGM	19/08	Turnbull House, Wellington	10.30am
+	Finzsoft Solutions Limited	AGM	19/08	TBA	9.30am
	NZF Group Limited	AGM	20/08	Tamaki Tacht Club, Auckland	TBA
*	ING Property Trust	AGM	24/08	The Sebel Trinity Wharf, Tauranga	TBA
	Smiths City Group	AGM	02/09	Conference Room, Mancan House Conference Centre, Cnr Cambridge Terrace and Manchester Street, Christchurch	10.00am
	EBOS Group Limited	AGM	22/10	TBA	TBA
*	New Zealand Oil & Gas Limited	AGM	28/10	InterContinental Hotel, Wellington	10.30am

*	Fisher & Paykel Healthcare	AGM	21/08	Guineas Lounge, Ellerslie Convention Centre, Auckland	3.00pm
	ING Property Trust	AGM	24/08	The Sebel Trinity Wharf, Tauranga	TBA

NZX Trading hours for 2009

NZSX & NZAX Markets	Normal trading	Abbreviated trading
Enquiry:	8.00am - 9.00am	8.00am - 9.00am
Pre-open:	9.00am - 10.00am	9.00am - 10.00am
Normal Trading:	10.00am - 4.45pm	10.00am - 3.45pm
Pre-close:	4.45pm - 5.00pm	3.45pm - 4.00pm
Adjust:	5.00pm - 5.30pm	4.00pm - 4.30pm
Enquiry:	5.30pm	4.30pm
NZDX Market
Enquiry:	8.00am – 8.45am	8.00am – 8.45am
Pre-open:	8.45am - 9.00am	8.45am - 9.00am
Normal Trading:	9.00am - 4.45pm	9.00am - 3.45pm
Pre-close:	4.45pm - 5.00pm	3.45pm - 4.00pm
Adjust:	5.00pm - 5.30pm	4.00pm - 4.30pm
Enquiry:	5.30pm	4.30pm
Settlement
Start of Settlement:	9.30am	9.30am
Funds Cut-off:	4.00pm	3.00pm
Registry and FASTER systems close-off:	6.00pm	5.00pm

Market holidays & abbreviated trading days for 2009
New Year's Day: Thurs, 1 Jan	Closed
New Year's Day Holiday: Fri, 2 Jan	Closed
Waitangi Day: Fri, 6 Feb	Closed
Thur, 9 Apr	Abbreviated Trading
Good Friday: Fri, 10 Apr	Closed
Easter Monday: Mon, 13 Apr	Closed
ANZAC Day: Sat, 25 Apr	Closed
Queens Birthday: Mon, 1 Jun	Closed
Labour Day: Mon, 26 Oct	Closed
Thur, 24 Dec	Abbreviated Trading
Christmas Day: Fri, 25 Dec	Closed
Boxing Day: Mon, 28 Dec	Closed
Thur, 31 Dec	Abbreviated Trading

Related Links

Share Investor Blog - Stockmarket & Business commentary
Share Investor New Zealand Business News- Get more business news
Shareinvestor.net.nz - Discuss NZX listed companies

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Richard Hurley from Auckland City Brokers

2009-07-02T18:42:00.004+12:00

Remember this name, Richard Hurley, Managing Director of Auckland City Brokers and on the recommended advisor's page on the Good Returns website Richard is described as having:

"18 years of experience in the Finance and Investment industry and has lived in Mt Eden for 25 years. Your satisfaction is guaranteed".

And his company Auckland City Brokers is there to:

"To protect our reputation and your peace of mind, we deal only in quality products.

We aim to implement strategies that will build your wealth and produce income streams in retirement".

All good inspiring, bodice ripping stuff but lets see how this stacks up.

Richard advised one of my elderly retired clients to invest a large sum of money into various ING funds that went belly up last year - he got a massive fee upfront for selling it to this person.

He advised on the basis that the investment was safe and low risk. This is not the case at all. That fact is that some of these funds were investing in derivatives in the United States, some of the riskiest investments (more like a roulette wheel) that one can make.

My client was assured by Richard that the investment was very safe.

Two days before ING announced a freeze of the funds this individual asked Richard to redeem the investment because of its dropping value but Richard laughed at this request and told his client not to worry because investments changed in value all the time - said said he was speaking to her like she was a fool.

Richard has refused to take responsibility for his false selling of ING products and has left his former client in the lurch.

We can imagine the rest.

There was much heartbreak, stress and tears over the following months and in the recounting of the facts today my client was close to tears a number of times.

Fast forward to the offer from ANZ/ING to investors in their failed funds of a 60% return of their capital into a cash call account at just over 8% but with a legal stipulation that those that accept the offer will not sue ANZ/ING or can you believe it anyone who advised people to invest in the fund.

You would have to ask yourself why is ANZ/ING protecting advisors, when they are not part of their corporation. The answer you might get, like me, is that advisors might know more than the public does about dodgy dealings and a legal way of shutting the whole thing down is the best way to keep a lid on things.

I didn't sign anything so I aint obliged to shut my gob.

My client accepted the ING/ANZ offer because the individual is getting on in life and hasn't got the energy to waste precious time and money going through a long expensive legal process that might not be winnable. Life is too short and all that stuff.

Financial Advisors (and I use that term in its loosest sense) like Richard are going to get away with their negligent and misleading advice because people like my confidant are either afraid, ashamed or legally obligated not to talk about it and that is a crime, morally and legally.

Richard Hurley from Auckland City Brokers and his ilk have advised and made money off the elderly under false pretenses. They have lost nothing, others have lost everything they have worked their lives for and now live with a high degree of uncertainty in retirement.

Shame on you Mr Hurley.

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Bruce Sheppard: Mark Weldon - "The Sherrif of Nottingham"

2009-07-02T07:34:00.006+12:00

Something that I have been banging on about for years is the lack of independence of Mark Weldon and his New Zealand Stock Exchange [NZX.NZ] and the very lose structures built around Mark's fiefdom that are supposed to protect shareholders, mostly smaller ones like me.

Its partner in crime, the Securities Commission, has as much bite as Jaws with dentures and is as hands off as a doctor treating a patient with swine flu when it comes to any enforcement.

In Bruce Sheppard's column this last Wednesday he manages to articulate my feelings with alot more detail, finesse and institutional fact.

"The listing rules allowed NZX to grant waivers, of the rules. Shit, this meant that NZX could enforce its rules on everyone else but waive them for themselves. Worse as NZX investigated breaches and prosecuted them, judged the results of the prosecution and fined the offenders, this too created a terrible conflict. How would NZX treat itself if it were to breach the rules?" Read the full article here.

The waiving of NZX "rules" has been high in stockmarket news of late as they have been so busy waiving their own rules for various capital raisings that smaller shareholders are wondering whether it will be their company next that will dilute their shareholding in favour of bigger shareholders.

Essential reading for every small shareholder.

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c Share Investor 2009

List of Bruce Sheppard's top NZX listed company debt worries (UPDATE 2)

2009-07-02T00:01:00.000+12:00

NB. This update adds Ebos to the List

Further to rumblings made by Bruce Sheppard on behalf of the New Zealand Shareholder's Association in May that in his opinion, roughly 20 listed companies in New Zealand were breaching banking covenants and after writing to these companies 2 so far have replied to Bruce. He is naming names as each company replies to him.

So in total 8 companies on his hit list have been revealed thus far.

1. Fisher & Paykel Appliances [FPA.NZ]

2. Nuplex [NPX.NZ]

3. Tourism Holdings [THL.NZ] - Read THL's letter to Bruce

4. Vector Ltd [VCT.NZ] - Read VCT's letter to Bruce

5. Freightways Ltd [FRE.NZ] - Read Bruce's letter to FRE & the reply

6. Skellerup Holdings [SKL.NZ] - Read Bruce's letter to SKL & the reply

7. Comvita Ltd [CVT.NZ] - Read Bruce's letter to CVT & the reply

8 Ebos Ltd [EBO.NZ] - Read Bruce's letter to EBO & the reply

I will post the rest here as and when the other 13 odd companies reply to Brucie.

Disc I own FRE shares

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Cadbury could learn a thing or two from 1980's Coca Cola experiment

2009-07-01T19:04:00.005+12:00

When you mess around with an iconic product that your customers just love to obsession just because you think you can save money by changing its appearance, packaging and well and truly tried and tested formula you risk losing that iconic status and your reputation that took generations to build and your customers.

Cadbury have done just that by changing packaging sizes of their family block chocolates while keeping them the same size of the old by using different packaging and the most brain dead thing of all changing the taste of their very successful essential ingredient that has made them the brand to go to when you think of chocolate, the ingredient in all their products, chocolate itself!

Forget for a moment that I am a pure obsessional when it comes to chocolate, my body is part blood, water, Crunchie Bar, Dairy Milk, Moro Bar and a list as long as your arm in Cadbury products but just consider what Cadbury have done.

The product that has made them the leader in chocolate for generations has had its successful formula changed,they have substituted the very essence of chocolate, palm oil for animal fat, supposedly to save money.

That is like taking the sugar out of Coca Cola and still calling it Coke!

Business 101, you don't change a successful product that your customers would die for just to save money. Trust me, they will pay more for it.

Executives at Cadbury head office are perhaps too young to remember another iconic product that was tampered with in the mid 1980s, the aforementioned Coca Cola.

The formula for that iconic drink was sweetened to taste more like Pepsi and launched on customers as "New Coke" and was an instant failure. Customers protested, Coke didn't listen,

they said the new product was better and consumers just needed to get used to it but Coke management didn't figure on how obsessive their customers were (duh!) and they simply stopped buying the new Coke. Two months latter Coca Cola relented and re-launched old Coke as "Coca Cola Classic" and the two products existed side by side on the supermarket shelf for a number of years. It is no longer sold in the United States.

This should be a lesson for Cadbury who must have execs in the marketing department of their Schweppes division that know about this famous marketing blunder, they sell their own iconic lemonade and other drinks products - the Coke story from the 1980s is taught in business schools around the globe about what not to do when in business.

"Those that don't learn from the lessons of the past are doomed to make the same mistakes".

Cadbury should learn from their mistake, it is already costing them in lost sales and is going to cost them dearly in the long-term if they don't rectify their decision to make a change.

I am a life long consumer of their former delicious products and I will no longer be buying them.

They just don't taste the same.

Its Whittakers for me!

Disc I love chocolate

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Mainfreight Annual Report Packs a Punch

2009-07-01T00:01:00.001+12:00

If I didn't already run a business I would want to work at Mainfreight Ltd [MFT.NZ].

I say this after reading yet another rather rip-roaring company report that you couldn't help being inspired and motivated by.

The cover of the A4 sized report has every employee's name printed on it, a rather unique idea that just shows how important Mainfreight's workers are to management and how integral they are to the sustained long term success of the company through its family culture.

Bruce Plested, Executive Chairman, has stressed a few poignant reasons why Mainfreight will be able to cope with the economic downturn:

(They have) "Committed people, hundreds of whom have been with Mainfreight for
between 10 and 30 years.

Internal promotion.

An ongoing graduate programme whereby we now have 286 university
qualified people spread through our business in New Zealand,
Australia, USA and China.

Compulsory in-house training for all new people in New Zealand and
Australia.

Weekly performance measurement in more than ten key activities –
in every branch in every country – produced at branch level.

Weekly branch profit reporting – produced at branch level at all
160 worldwide branches.

Ownership of many of our specialised operating sites.

Ever developing technology now standardised and integrated between
our branches in New Zealand, Australia, USA, China and Hong Kong.

Many thousands of great customers, who strive and innovate, who
work hard and are an integral part of our success."

Along with all the usual facts and figures a typical company report contains, there is inspirational company mantra that isn't merely empty verbiage and also a huge focus on the current economic climate, what the company is doing to ameliorate the effects of this downturn and how they see we can use this recession as an opportunity to change our direction as a country in a big way.

Bruce also goes on to add that New Zealand is a country slipping behind in the wealth stakes and we really need to do something to get off our butts and work to increase our productivity, something that has been holding the country back for nearly 40 years, but especially in the last 10.

He gives advice as follows that most people with at least half a brain would agree with:

"Why don’t the losers in the election go and get a job instead of the
futile debate they engage in, and the bureaucracy they carry?

Why not wipe the jury system for a wide range of crimes and let a
judge decide guilt or innocence?

What about a four-year electoral period to enable the development of
longer term strategies?

Instead of building new prisons let’s release enough inmates on a
regular basis to accommodate new offenders.

Let’s provide free university education for the skilled people we
need, i.e. doctors, scientists, teachers, engineers, if they fulfil certain
employment criteria in New Zealand.

Introduce capital gains taxes on sales of property other than the
family home.

Lower company tax to 10% or thereabouts. Nothing will boost our
economy more than nurturing our businesses. The tax will still be
earned by the Government, as dividends are taken.

If we really want a cycle track the length of New Zealand, why not
attempt to do it using volunteers, the unemployed, companies or just
challenge us to find a way.

Appoint successful young business people to serve on the boards of
SOEs, and other Government run organisations. As day follows night,
weak boards result in weak management and poor outcomes.

Don’t allow local bodies to own majority shareholdings in strategic
assets, i.e. ports, airports, electricity. Much of this monopolistic
structure is effectively bound in shackles through incompetent and
agenda driven boards."

He does muddy his economic waters a little by mentioning the economically illiterate Rob Muldoon and financial genious Roger Douglas in the same breath and commenting that we can learn things from them -in Muldoon's case what not to do (my emphasis).

Mostly good advice apart from a brain hemorrhage at the Prison system but great commentary that every third form economics student and every other company CEO should read.

I recommend that you have a read too.

Disc I own MFT shares

Download the 2009 Mainfreight Annual report here.

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Pumpkin Patch's North American Downsizing a Prudent, Overdue Move

2009-06-30T16:17:00.005+12:00

News out today that Pumpkin Patch [PPL.NZ] are going to ditch 20 of their 35 United States stores is good news for the company and investors.

It means investors will have less pain in the short term and that there is also still a base in North America from which it can expand again when economic conditions are far more rosy. The uncertainty of retailing conditions in the US and just how long things are going to be dire cannot be ignored.

As a shareholder am pleased about management's move but given that the retail sector in the US has been behaving like a WW2 Zero pilot on a suicide mission for an extended period, one could be a little critical that this move wasn't made 6 months ago. Having said that the exit seems to have been well planned.

Of course the US and New Zealand is littered with collapsing retailers, so Pumpkin has done well to survive, let alone make a profit.

Trading in New Zealand and Australia has been surprisingly resilient and my hunch and anecdotal evidence is that very high birth rates in both countries stimulated by welfare targeted at families having kids (a story for another day on another blog) means that demand in this region has been artificially raised - Thank's Aunty Helen!

There will be costs to exit the 20 stores and this will clearly make the bottom line look awful next reporting period in October but in amongst that bad news is one key piece of good news, 11 of the remaining 15 stores in the US have had their leases re-negotiated in a southerly direction. This is one of any retailers biggest sustained costs.

On a personal note, much of my reason to buy this company was its expansion plans in America and I am pleased the company is still going to pursue that market some time in the future. Without that avenue for growth I would have exited the company when the share price recovered.

The share price moved strongly upward on this news mainly because losses in the US will be far lower than previously pegged by analysts.

Look for an opportunity to buy on lower share prices when the forthcoming book entry loss is announced in October.

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Michael Hill: Interview with Ian Fraser

2009-06-28T09:11:00.004+12:00

You may have missed an interview with Michael Hill yesterday with Ian Fraser. I only caught it by accident while turning the dial.

Michael is currently on a media blitz to sell his book and this is another but more interesting leg.

The interview covers off his personal background and motivation to get him where he has.

It is very interesting to hear that up until the infamous house fire when he was 43 he wanted to "do more" in life but, like most of us, was fearful of making that step out of the comfort zone we place ourselves in. After that incident he reacted in a way that most wouldn't - he calmly decided that there was more to life than what he had experienced thus far and he was going to "go for it".

The fire somehow was the impetus that removed that block and allowed Hill to face new things without fear and that we all face that moment when a choice can be made that will change our lives but we don't always take it. -he did.

There was also an interesting admission, he mentioned that he has made a mistake by buying Whitehall Jewelers Holdings-based in the Chicago out of bankruptcy last year - not usually something that CEO's would readily admit to and he says he has learnt from it, the struggling US business has taught the company as a whole how to respond to the current tough economic times, he said.

I would recommend a listen, the interview is 46 minutes long, 16 MB and can be downloaded at Share Investor Forum here. You have to be a member to download, its free and quick - register, it takes less than a minute.

Disclosure I own Michael Hill International shares.

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c Share Investor 2009

A Note to Prospective Restaurant Brand's Shareholders

2009-06-26T13:45:00.015+12:00

There has been market talk in the past and more out today about how positive things look for Restaurant Brands [RBD.NZ] profit next year.

Yes, profit will be up marginally from last year and substantially from the last few years but this company really has had a dreadful past, so any increase in profit will look good.

I am not sure whether anyone follows this company closely in the broker/choker set but if they do they were either in nappies when the company listed back in 1997, too lazy to analyze the company's history properly, or ignoring the bleeding obvious simply because the stock will be back in the NZX 50 next week and brokers will have to add the stock to their index funds - read pump and dump.

While South African CEO Russel Creedy has done a much better job than any leader the company has had, he has gotten the company out of the fast food graveyard by focusing on cutting costs, speeding up service times and levels of service (my experience from gorging at KFC for the last 15 years and being a large RBD shareholder in the past) the industry that his company operates in is notoriously cyclical.

Fast food is currently undergoing a renaissance of sorts because of dire economic circumstances and people are looking for cheaper places to eat. RBD is now in the upper part of the fast food cycle, in fact I mentioned about ten years ago that its business cycle is up and down more than a cheap Krd hooker, anyway, that aside, my bet is that the stock may even race up to one and a half dollars or more from its current 1.02.

It has moved over the last couple of months ago from a low of 57c a stock price it last reached in the late 90s.

My point is if you are interested in buying into this stock, be warned that you should be there for the long-term because its stock price will come down again when it moves back off the peak of its economic cycle and once again struggles to maintain profit.

You have been warned dear readers but as always, do your own research.

Restaurant Brands @ Share Investor

Pizza Hut sell-off provides opportunities all-round
Danny Diab & Restaurant Brands
2008-2009 KFC sales figures mislead investors
KFC Finally Flying
Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
McDonald's playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures

Discuss Restaurant Brands @ Share Investor Forum

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Long VS Short : Auckland International Airport

2009-06-26T00:01:00.000+12:00

In this eight installment of the Long vs Short series I am once again going to take look at the chart comparisons for a stock from the Share Investor Portfolio and compare the 10 year return (chart above) to the turmoil of the last year with a 1 year return chart (large chart at bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view (10 years )and will make a comparison against the NZX50.

In this segment of Long vs Short I will take a look at Auckland International Airport Ltd [AIA.NZ] .

I currently hold 3000 Auckland Airport shares after buying 1000 of them in November 2006 and 2000 in April of this year. (see small chart below for detail)

My Portfolio
Symbol	Price	Value	Earned
AIA.NZ	$1.600	$4800	$-540

You own 3000 [AIA.NZ] shares purchased at $1.78 [$5340]

This stock has been performing well fundamentally over the last 10 years and steady over the last 12 months. Its share price though has been fluctuating wildly over the last few years. From a high of over $3.60 during a competing bid to seize control of the company in 2007-2008 to $1.54 recently.

If I had held this stock for the full 10 years (see large chart at top) my return would have been a whopping 210%-including dividends, tax credits and minus brokerage, the NZX is a gross index of stocks.

By comparison if I had held the stock for just this last year (see large chart below) my return would have been a loss of just over 35%.

My total return after 2.5 years or so of holding AIA stock is a loss of just under 10% (see small chart above) That is after dividends and tax credits are added and brokerage applied, not bad considering the market drubbing of every listed NZX share but there is an 8c gain from the 2000 shares I bought in April at $1.70 each.

Having said that this exercise proves, once again, that the long-term bet is the only one to take.

Long-term, 8 in this series, short term 0.

Long vs Short Series

Michael Hill International
Freightways Ltd
Pumpkin Patch Ltd
Fisher & Paykel Healthcare
Mainfreight Ltd
The Warehouse Group
Sky City Entertainment

Auckland International Airport @ Share Investor

Auckland Airport needs main focus on its core business
Marketwatch - Auckland International Airport
Why did you buy that stock: Auckland International Airport
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Discuss this stock @ Share Investor Forum

Related Links

AIA Financial Data

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Pizza Hut sell-off provides opportunities all-round

2009-06-25T06:49:00.006+12:00

The finalisation of details yesterday of a decision made last year by Restaurant Brands [RBD.NZ] to ditch their company owned Pizza Hut restaurants and flog them off to owner/operators brings to an end the long running saga of this money losing brand in RBD's stable of 3 - KFC & Starbucks being the two others - brands.

For many years Pizza Hut has dragged down the company bottom line while KFC has struggled at times to hold up the whole company - Starbucks has also been a money loser since its introduction in 1999.

Many of my readers will know that I was a early shareholder of RBD and actively pushing management back in 1998 to ditch Pizza Hut and sell them to owner operators as that was how their competition was kicking Pizza Hut's backside.

Better late than never!

This latest development will be good for RBD shareholders. Not only will RBD get one-off money for selling Pizza Hut stores but they will also get ongoing management fees for each store that is sold-a sub franchisor of sorts, as YUM! still remains the big daddy franchisor.

All Restaurant Brands shareholders need is the double -Starbucks to be sold off - and the company will be much more able to withstand the highly competitive fast food market with KFC as the big star.

Of course the Pizza Hut sell off provides a good opportunity for individuals to buy a run down business and develop it into a good one.

A franchised pizza business like Pizza Hut, if run well, is a great way to make money.

Domino's Pizza owners in New Zealand have done this well over the years and this has left Pizza Hut as the also ran after being the dominant pizza force in New Zealand for years.

If you have a couple of hundred thousand free cash and access to debt you might well want to give RBD a call right now.

Restaurant Brands @ Share Investor

Danny Diab & Restaurant Brands
2008-2009 KFC sales figures mislead investors
KFC Finally Flying
Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
McDonald's playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures

Discuss Restaurant Brands @ Share Investor Forum

Fast Food, Fast Track: Immigrants, Big Business, And The American Dream by Jennifer Parker Talwar
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Market Watch: Sky City Entertainment/Freightways Ltd

2009-06-24T19:06:00.005+12:00

Interesting that both Sky City Entertainment Group [SKC.NZ] and Freightways Ltd [FRE.NZ] respective share prices are both approaching the price at which their recent capital raisings were issued at.

Lets have a wee look at Sky City first.

Today the stock closed at NZ$2.62 (see 2 month SKC chart below) just 1c above the $2.61 Share Purchase Plan (SPP) price, a purchase plan that I participated in just a month ago.

At the time I moaned and bitched that my current Sky City shareholding was going to be diluted, only getting just shy of 2000 shares in the offer. I had a feeling that the share price was going to take a dip because of economic circumstances (gee I am a genius), so I am going to take the opportunity to grab a few more thousand shares to top up my holding to 40000 or more .

Naturally I am very pleased about this turn of events in the market.

Likewise Freightways. I got gypped there too, and will be looking for at least another 1000 more shares to top up my holding to 10000. The current share price is $2.84 as of market close today so there is still another 40c to go before it will trigger a buy at the SPP of $2.44 but if you look at the Freightway's 2 month chart below you will see, like Sky City, the share price trajectory is in a downwards direction, so is possible that my buy price will be reached.

Time to put some cashflow to good use.

Freightways @ Share Investor

Freightway's Capital Raising more of the same crap for small shareholders
Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result

Discuss this company @ Share Investor Forum

Sky City @ Share Investor

Sky City share offer confusing and unfair for small shareholders
Sky City CEO doubles down
Sky City Entertainment 2009 Interim Profit Review
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss this company @ Share Investor Forum

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Stock of the Week: Burger Fuel Worldwide

2009-06-22T06:00:00.003+12:00

This Stock of the Week will be a surprise to many because I have been very critical of this company since its IPO listing in July 2007. Burger Fuel Worldwide [BFW.NZ], the "gourmet" burger franchisor company that collects royalties off franchisees as a means of revenue -but currently derives more than half its revenue from food and beverage sales at two company owned stores-and has limped from a failed, over-priced IPO and incurred big but dwindling losses along the way.

Its cash reserves are almost exhausted and its stated reason for their IPO, attracting more franchisees to gain revenue growth for the franchisor, has come to a grinding halt because of "capital restraints".

All negative so far, but wait there's more! Some positive stuff!

There is a chance that Burger Fuel, management could pull things off sometime in the future and make a good sustained profit.

One of the reasons I picked this stock was its share price. It is getting close but not yet at, its true value. At 32c it is roughly a third of its $1 IPO price. There is little interest in and few buyers lined up as at market close on Friday 19, with the first cab off the rank offering 10c a share and the lowest 1c - the lowest ever bids for this stock, so a clear opportunity exists.

Burger Fuel isn't one of those solid stocks you would buy and not expect to lose money, it is purely speculative and high risk but if you have, like me , been watching the trials and tribulations of this company over the last 2 years, and thinking about buying some, now would be the opportune time to start thinking about it.

Anything less than 15c would be a good starting point.

Good luck!

Stock of the Week Series

Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances

Burger Fuel Worldwide @ Share Investor

Download full company analysis from Thomson First-Call
Burger Fuel doesn't rule out capital raising
Burger Fuel Worldwide: Closer look at Company Accounts
Analysis - Burger Fuel Worldwide: FY profit to 31/03/09
Burger Fuel: Running on Empty
Burger Fuel leaves investors hungry
Burger Fuel management cagey over company progress
Burger Fuel cooks up Dubai deal
NZX share trades with strings attached
Don't buy Burger Fuel, yet
Burger Fuel: Inside info?
Burger Fool IPO: Burger Fool?
Exclusive Interview with Burger Fuel's Josef Roberts
Burger Fuel's Daytime drama
Burger Fuel share price out of gas
Beefing up store numbers
Director explains share price drop
Burger Fuel slims down in value
Burger Fuel and Coke
Marketing Burger Fuel's future
Pumpkin Patch VS Burger Fuel
Burger Fuel results and commentary

Discuss this Topic @ Share Investor Forum

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c Share Investor 2009