FSF - Fonterra Shareholders Fund

[Tim nice but dim]

Share price today hits $8.50 an ALL TIME HIGH.     

who would have guessed this happens so quickly after the capital return, not me!

[Tim nice but dim]

An interesting article posted yesterday, worthy of comment

https://www.farmersweekly.co.nz/markets/dairy-markets/fonterra-results-give-analysts-confidence-in-farmer-returns/

In particular .......

"Craigs Investment Partners forecasts Fonterra's annual revenue to remain steady at around $25bn, while the net profit from continuing operations falls back to $1.25bn in each of the three forthcoming financial years.

That would generate dividends in a 60c-62c range, compared with the 73c paid out on FY26."

1) Dividend from continuing operations last year was 57c not 73c. You can't include the Mainliand special dividend & compare apples with bannanas.

2) If the Craig's dividend prediction is correct (60 -62c) this would equate to a rise in dividends between 5.3 to 8.8%. In my book an outstanding result that I would be more than happy with.

3) If the dividend goes up then how can EPS not also go up?

4) The article is all over the place fleshing out various conflicting broker & expert predictions & not drawing a final conclusion as to single the meaning of the result. I suggest as usual you DYOR.

[seaweed]

An interesting article posted yesterday, worthy of comment

https://www.farmersweekly.co.nz/markets/dairy-markets/fonterra-results-give-analysts-confidence-in-farmer-returns/

In particular .......

"Craigs Investment Partners forecasts Fonterra's annual revenue to remain steady at around $25bn, while the net profit from continuing operations falls back to $1.25bn in each of the three forthcoming financial years.

That would generate dividends in a 60c-62c range, compared with the 73c paid out on FY26."

1) Dividend from continuing operations last year was 57c not 73c. You can't include the Mainliand special dividend & compare apples with bannanas.

2) If the Craig's dividend prediction is correct (60 -62c) this would equate to a rise in dividends between 5.3 to 8.8%. In my book an outstanding result that I would be more than happy with.

3) If the dividend goes up then how can EPS not also go up?

4) The article is all over the place fleshing out various conflicting broker & expert predictions & not drawing a final conclusion as to single the meaning of the result. I suggest as usual you DYOR.

 

Yes you are right. The normal div payout was as you say 57c and not including the Mainland payout which was $2+16c. Maybe they want the sp to go down so they can accumulate more  

[Left Field]

If the Craig's dividend prediction is correct (60 -62c) this would equate to a rise in dividends between 5.3 to 8.8%. In my book an outstanding result that I would be more than happy with.

FSF back on trend after the $2.00 special dividend payout slump.

Aquiring FSF with an av hold SP below $5.00 provided a safety margin  that makes future dividend potential even more attractive. A nice hold in a long term well balanced portfolio.

[LoungeLizard]

FSF back on trend after the $2.00 special dividend payout slump.

Aquiring FSF with an av hold SP below $5.00 provided a safety margin  that makes future dividend potential even more attractive. A nice hold in a long term well balanced portfolio.

Agreed. Diversity is rule number one of Investment 101. Picking winners works fine until it doesn't. That said, it's good to have a few "fun" stocks. PEB is likely to provide my best return this year - go figure!

[Left Field]

Crikey, nice action on close yesterday.....SP up to ATH of $9.20 plus a $0.30 divvy arrived in the bank.

[Left Field]

Agreed. Diversity is rule number one of Investment 101. Picking winners works fine until it doesn't. That said, it's good to have a few "fun" stocks. PEB is likely to provide my best return this year - go figure!

lol. I couldn't possibly comment regarding PEB on this thread.... however I suspect some of us  are 'well positioned.'

Back to FSF - On RNZ today the latest Global Diary Price auctions.... overall diary prices up 2.2% with Whole Milk Powder up 4.4%

https://www.globaldairytrade.info/en/product-results

[LoungeLizard]

SP at $9.45. Looks like that $10 prediction will prove right, possibly before xmas at this rate.

[seaweed]

Everyone happy with the 5% sp gain today Give me the thumbs up if you are.

[Left Field]

Everyone happy with the 5% sp gain today Give me the thumbs up if you are.

A good day indeed. My riskiest PEB up 8%. FSF up 5%. FPH and IFT both up around 4%.

I hear FSF earned you a new car.....well done!
( I only managed a second hand RV, but v happy how FSF is progressing.)

[LoungeLizard]

A good day indeed. My riskiest PEB up 8%. FSF up 5%. FPH and IFT both up around 4%.

I hear FSF earned you a new car.....well done!
( I only managed a second hand RV, but v happy how FSF is progressing.)

Funny how we all took the opportunity that the FSF capital return and dividend provided to update our wheels. I traded up the camper van!

[Habitz]

I used the money to invest, more fonterra, mfb, peb shares. Also donated cash to Childfund and Leprosy mission as their life struggles are incredible. My vehicles going really well

[Tim nice but dim]

$1B of FCG shares need to be sold as holders are no longer members of the co-operative.

https://www.nzherald.co.nz/video/herald-now/herald-now-business/around-1-billion-in-fonterra-shares-held-by-farmers-who-no-longer-supply-milk-herald-now-business/N5HWBZHHJVFCH5HAJGYSNQTGCU/

Wow that's 11.8% of the shares held by farmers & about 5 years left to clear this overhang. Big F still committed to the cooperative model so who will be buying these shares? Options....

1) Other farmers          UNLIKELY (farmers have better things to do with their $$$)
2) New FSF shares issued  HIGHLY UNLIKEY (not in keeping with co-operative's goals)
3) Buy back               POSSIBLE (Big F have plenty of surplus cash)

If 1) then expect significant impact in FCG share price.
      Big F have gone out of their way to show FCG holders an attractive return on their share  holdings, dividends have been as high as they can be under current policies. But is this enough? I do not belive this will result in suppliers forking out $1B for additional shares.
If 3) then expect significant reduction in returns to shareholders including FSF holders.
      This could be between 200 - $250M per year for 5 years.
      This would be moving away from the co-operative ownership model, but the change in share ownership structure made in 2021 made some action/intervention inevitable.
If 1) & 3) Then expect combination of both above arguements.

This issue was created 5 years ago & we should expect Big F already have a plan to correct this overhang, I wish they would tell me.