SPK - Spark NZ

[Left Field]

Some say the recent SPK SP lows were due to possible DRP scheme manipulation as the DRP scheme's last 5 day consideration period was yesterday?

Anyways today will be interesting as the DRP consideration period is over, plus the USA interest rate news should give SPK a lift. GLH.

[BlackPeter]

Some say the recent SPK SP lows were due to possible DRP scheme manipulation as the DRP scheme's last 5 day consideration period was yesterday?

Anyways today will be interesting as the DRP consideration period is over, plus the USA interest rate news should give SPK a lift. GLH.

DRP scheme manipulations? Is it really necessary to give every senseless conspiracy theory oxygen?

On the other hand the US interest rate cuts might give the exchanges some temporary boost, though I don't see how it would impact on Spark more than it does on the rest of the crowd. Though admittedly, they have a lot of liabilities on their balance sheet, and highly indebted companies like Spark might get a bigger reward until the next crisis looms ;

[seaweed]

Some say the recent SPK SP lows were due to possible DRP scheme manipulation as the DRP scheme's last 5 day consideration period was yesterday?

Anyways today will be interesting as the DRP consideration period is over, plus the USA interest rate news should give SPK a lift. GLH.

That is right, the last day of the DRP consideration was on Wednesday 18/9/24 and DRP discount price of $3.246c. I noticed on close yesterday about 2 million were selling and sp up 3.5c. The DRPers don't need to sell any more, but also don't want sp to fall below DRP price. So you are right yesterday was an interesting day and today will be also interesting. Is GLH Good Looking Hair or Go Like Hell.

[seaweed]

That is right, the last day of the DRP consideration was on Wednesday 18/9/24 and DRP discount price of $3.246c. I noticed on close yesterday about 2 million were selling and sp up 3.5c. The DRPers don't need to sell any more, but also don't want sp to fall below DRP price. So you are right yesterday was an interesting day and today will be also interesting. Is GLH Good Looking Hair or Go Like Hell.

Well that is my theory out the window sp went below $3.246c this afternoon LOL.

[Breezy]

Well that is my theory out the window sp went below $3.246c this afternoon LOL.

Cant stop those sharks from biting each other's tails off, upcoming interest rate cuts will help to lure the schools of reef fish back.

[LoungeLizard]

Cant stop those sharks from biting each other's tails off, upcoming interest rate cuts will help to lure the schools of reef fish back.

Yes, hard to maintain a rational mindset when the market is gripped by greed, and in the case of Spark, fear.
All one can do is hunker down and wait for the storm to pass   

[Left Field]

Well that is my theory out the window sp went below $3.246c this afternoon LOL.

Maybe it was all about index rebalancing day??..... around 2 Mill shares through on close at $3.28

What that means for SPK next week who knows!

A lot of good stocks hammered on close today

I don't hold SPK .... just watching (and hopefully learning.)

[Glenorchy]

Some say the recent SPK SP lows were due to possible DRP scheme manipulation as the DRP scheme's last 5 day consideration period was yesterday?

Anyways today will be interesting as the DRP consideration period is over, plus the USA interest rate news should give SPK a lift. GLH.

I think there could be several factors at play, some of them not so much Spark specific as NZ specific. the sell down could be linked to the fact a number of other markets are having softer landings and therefore prospects are better, earnings forecasts look more robust etc. Some international investors of which Spark has quite a few will simply see better options elsewhere and see an opportunity cost in remaining invested in sometheing where the recovery timeframe is longer. NZ inc is sadly having a pretty hard landing and companies that operate almost entirely domestically and do not have a significant international focus are going to be operating in less than positive conditions for a while yet.

The recession is deep enough that a few rate cuts aren't necessarily going to revive things quickly. It was interesting to see how the 25 pt cut bolstered the listed property sector initially but now some of the gains have been given up again because commercial property needs more than lower interest costs it needs lots of healthy prospering tenants. I think some domestic stocks will have greater pricing power and be able to force big rises on a recession-ridden NZ but some sectors will be less able too. The upshot a lot of NZ stocks won't return to full health till the economy does so we could be in for a couple more bad earning seasons yet.

I guess timeframe, portfolio goals, whether imputation credits are of value to you etc. determine whether people choose to go long and buy in pessimistic times.

[KW]

It has been a zero growth company for ten years. 

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And yet, despite being a zero growth company its managed to borrow and spend an extra billion dollars over that period.  What did they spend it on?  What do they have to show for it?  Did they go to the same school of finance that Jacinda Ardern did?

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What P/E should a zero growth company be trading on?  Probably lower than its current 20.  Maybe the 15 it used to trade on, in which case its got another 25% of the price to lose. 

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[Basil]

Ben Graham believed zero growth companies should trade on a PE of 8.5

What PE for a company with a CAGR of 10% ? 

[Ferg]

I had the sense this was a dividend yield trap and KW's post confirms the longer term trends so thanks for sharing that.

I predict it will be at least 2 years (minimum) before the SP resumes its former levels, assuming the SP recovers.  Such a SP recovery would have to be off the back of EPS growth and not just market enthusiasm.

[BlackPeter]

Ben Graham believed zero growth companies should trade on a PE of 8.5

What PE for a company with a CAGR of 10% ? 

The thing is - neither revenue (which would anyway be absolutely irrelevant for the Grahams formula) nor earnings did grow with anything like 10% - actually - earnings growth is lightly negative (i.e. earnings per share did shrink). Which means 8.5 is the best you should use as multiplier, rather less.

[Breezy]

Yawn PE ratios, nice big divvy arrives in my bank account Oct 4th. Oh what a surprise that Telstra has a PE of 28, Yawn.

[LoungeLizard]

It's funny that Snoopy, on the other site, who is a number cruncher par excellence, basically concludes that Spark has been a steady-as-she-goes kind of company, for the best part of a decade, paying solid, reliable dividends and whose share price, the recent slide not included, has almost doubled over the past ten years. Add in dividends and Spark have comfortably beaten the NZX50 yearly average growth over this period.

What he also notes is that their revenue streams have moved constantly throughout this ten year period ie they have had to adapt to changing demands and technology. At the moment mobile revenue is under pressure but they are switching to data centres where they - and I - believe there is greater potential for growth. In other words, shifting sands, but fundamentally sound, as history shows.

What this tells me again, is that how the market interprets the fundamentals of a business matters is almost as much as the business itself. the same people that deride the numbers of Spark are supports of companies like HGH while others, like myself, look at their history and decision making and say "not on your life." Horses for courses.

PE's? Give me a break. If you use that as your main determinant then you will never invest in any of NZ"s biggest companies - FPH, MFT, AIA. Or rather, you won't, but your superannuation fund probably will.

 
 

[Breezy]

It's funny that Snoopy, on the other site, who is a number cruncher par excellence, basically concludes that Spark has been a steady-as-she-goes kind of company, for the best part of a decade, paying solid, reliable dividends and whose share price, the recent slide not included, has almost doubled over the past ten years. Add in dividends and Spark have comfortably beaten the NZX50 yearly average growth over this period.

What he also notes is that their revenue streams have moved constantly throughout this ten year period ie they have had to adapt to changing demands and technology. At the moment mobile revenue is under pressure but they are switching to data centres where they - and I - believe there is greater potential for growth. In other words, shifting sands, but fundamentally sound, as history shows.

What this tells me again, is that how the market interprets the fundamentals of a business matters is almost as much as the business itself. the same people that deride the numbers of Spark are supports of companies like HGH who others, like myself, look at their history and decision making and say "not on your life." Horses for courses.

PE's? Give me a break. If you use that as your main determinant then you will never invest in any of NZ"s biggest companies - FPH, MFT, AIA. Or rather, you won't, but your superannuation fund probably will.

 
 

The PE brigade must be bored but wait i have a project for them, I want them to explain to me in a convincing way the CNU PE and sp over the last 12 yrs, should keep them busy for a few weeks.
Haha yeah yet HGH and TRA were the biggest dog stocks on 4 legs a few yrs ago according to some of these SPK detractors.