SPK - Spark NZ

[KW]

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.

Ah yes, Telstra.  Another zero growth company.  But I think you are mistaken with its P/E - its currently 16.  So I am not far off the mark.

Here is the Telstra historical P/E over the same time period.  Lets play spot the difference shall we?

You cannot view this attachment.

[LoungeLizard]

Ah yes, Telstra.  Another zero growth company.  But I think you are mistaken with its P/E - its currently 16.  So I am not far off the mark.

Here is the Telstra historical P/E over the same time period.  Lets play spot the difference shall we?

You cannot view this attachment.

 Telstra's PE is 16 and Sparks is about 19. Telstra SP is A$4 and Sparks is NZ $3.28. Which represents better value at this point?

[Breezy]

Ah yes, Telstra.  Another zero growth company.  But I think you are mistaken with its P/E - its currently 16.  So I am not far off the mark.

Here is the Telstra historical P/E over the same time period.  Lets play spot the difference shall we?

You cannot view this attachment.

Well on the Jarden Direct site it shows a PE of 28 for TLS and 19 for SPK so going off that.
Most people don't buy these stocks for growth but simply for consistent dividends and the big players buy it as a money parking spot and currency hedge.

[Basil]

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.

Perhaps I should not have been so cryptic in my post. What I was getting at is that,TRA, as an alternative high yield stock to Spark has been growing eps and dps at about 10% over the years whereas Spark is a no growth company. Despite this and strong prospects for that growth to continue it trades at half the PE.

It's not just the gross yield dividend hounds should focus on, it's whether it's likely to grow or shrink in the years ahead.

Spark's new data centre will just replace the earnings stream from their dieing copper network is how I see it.

Apart from that, my personal experience dealing with Spark when they withdrew copper around here, is I think their customer service is amongst the worst of any company I have ever experienced.

I don't buy stocks on PE's that make no common sense for the average growth experienced or expected In the years ahead.

[Breezy]

Perhaps I should not have been so cryptic in my post. What I was getting at is that,TRA, as an alternative high yield stock to Spark has been growing eps and dps at about 10% over the years whereas Spark is a no growth company. Despite this and strong prospects for that growth to continue it trades at half the PE.

It's not just the gross yield dividend hounds should focus on, it's whether it's likely to grow or shrink in the years ahead.

Spark's new data centre will just replace the earnings stream from their dieing copper network is how I see it.

Apart from that, my personal experience dealing with Spark when they withdrew copper around here, is I think their customer service is amongst the worst of any company I have ever experienced.

I don't buy stocks on PE's that make no common sense for the average growth experienced or expected In the years ahead.

You don't like SPK and your not buying SPK yet you continue to spend a lot of time making negative comments on it, you know there are plenty of other dogs like HGH that require copious amounts of flea powder currently that you actually hold. TRA was close to being euthanased at one point but had its life spared yet that doesn't mean it will always be good stock going forward, the wheel in the sky keeps on turning.
Also TRA is more than likely getting to near the top of its positive cycle whereas SPK is heading to the bottom of its so which is the better buy going forward.

[Basil]

Any dividend hound worth his salt is going to run the ruler over all high yield opportunities. There is value in comparing them even if you can't understand why. 

[Breezy]

Any dividend hound worth his salt is going to run the ruler over all high yield opportunities. There is value in comparing them even if you can't understand why. 

Comparing is one thing but pet beat up projects are another. HGH is currently carrying a few fleas but as a non holder its not my job to make it my next beat up and frankly I couldn't be bothered but I'm sure there would be plenty of objections if I were to.

[Basil]

Nothing wrong with good vigorous debate about the pro's and con's of various stocks mate.  I think you are too sensitive. 

[LoungeLizard]

Nothing wrong with good vigorous debate about the pro's and con's of various stocks mate.  I think you are too sensitive. 

To be fair, there's a lot of that on both sides of the debate...

[Apollo]

Spark's new data centre will just replace the earnings stream from their dieing copper network is how I see it.

Isn't it Chorus that owns, runs and maintains (not very well) the old copper network. Spark was having Chorus clip the ticket on the old copper network so were busy trying to get people onto their wireless network. Probably at a lower price so not much gained maybe.

[Breezy]

Isn't it Chorus that owns, runs and maintains (not very well) the old copper network. Spark was having Chorus clip the ticket on the old copper network so were busy trying to get people onto their wireless network. Probably at a lower price so not much gained maybe.

Correct and shows some peoples lack of understanding of the company basics. Wireless available over a larger and more remote areas than the old copper network though.

[Apollo]

KW's post #158 is very enlightening if you think buying at an 18 P/E is good value unless you think SPK is going to grow earnings a lot over the next few years. Predicting the future is impossible but generally the past can give us an idea what to expect.

[Breezy]

KW's post #158 is very enlightening if you think buying at an 18 P/E is good value unless you think SPK is going to grow earnings a lot over the next few years. Predicting the future is impossible but generally the past can give us an idea what to expect.

Not enlightening for those of us that have been dealing with this stock for over a decade and yep the past consistent dividend payments over that time can give you an idea what to expect. Overseas Big boys selling down just like when they sold CNU down to a very deep value of $1.40. This sell down is very much a reflection of the crap state the NZ economy is really in currently.

[LoungeLizard]

There's a report apparently of Spark winning a $100m contract with Transpower. But the sell down continues regardless....

[Breezy]

There's a report apparently of Spark winning a $100m contract with Transpower. But the sell down continues regardless....

I don't think these big players care about anything once they start their selldown, it just continues until they hit their numbers. One thing for sure is they will be losing big dollars.